TaxTMI 
TaxTMI 
2018 (7) TMI 1403
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....ncome, the assessee also declared long term capital gains of Rs. 42.22 lakhs arising on sale of 2,50,000 shares of M/s. Prraneta Industries Ltd., and claimed the same as exempt u/s. 10(38) of the Act. The return of income was initially accepted but later on the Assessing Officer reopened the assessment by issuing notice u/s. 148 of the Act on 30.7.2009 in order to verify the correctness of the claim of long term capital gains referred above. The Assessing Officer noticed that the assessee had sold scrips of Kotak Mahindra, NIIT Ltd. and Steel Authority of India Ltd. on 27.4.2004 through M/s. DPS Shares and Securities P. Ltd. and the same has resulted in net gain of Rs. 47,133/-. On 29.4.2004, the assessee purchased 25,000 shares of M/s. Prr....
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....er of the assessee. In the affidavit, the above said director confirmed the genuineness of the transactions entered by the assessee in the shares of M/s. Prraneta Industries Limited. Hence, the ITAT restored the matter to the file of the Assessing Officer for examining the claim of the assessee afresh by duly considering the additional evidences furnished by the assessee. 3. In the set aside proceedings, the Assessing Officer summoned Mr. Rajkumar Masalia (authorized representative of M/s DPS shares and securities P Ltd) again and recorded his statement on 20.3.2014. In his statement, Mr. Rajkumar Masalia confirmed that the transactions made with the assessee were genuine. The Assessing Officer noticed that the payments against sale of sha....
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....otak Mahindra, NIIT Ltd. and Steel Authority of India Limited. He submitted that Shares so purchased were deposited in the demat account of the assessee prior to its sale on 14.7.2005. He submitted that demat account furnished by the assessee was not doubted by the Assessing Officer and the same shows receipt and delivery of shares in the dematerialized form. He also submitted that the transactions carried out in demat account also proves the fact that the assessee had in fact purchased shares of M/s. Prraneta Industries Limited and sold the same. Accordingly he submitted that the tax authorities were not justified in doubting the genuineness of purchase and sale of shares. With regard to receipt of payment by way of cheques from two unrela....
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....der passed by SEBI confirmed the conclusion drawn by the Assessing Officer. 7. In the rejoinder, learned AR submitted that the SEBI has passed the order on 22.5.2012. Allegation was during the investigation period, i.e., from 10.1.2005 to 12.5.2005, the price of scrips of M/s. Prraneta Industries Ltd.had fluctuated widely. The Learned AR submitted that the assessee has purchased shares on 27.4.2004 i.e. prior to investigation period and sold the same on 14.7.2005 i.e. after investigation period. Accordingly, learned AR submitted that the order passed by SEBI does not cover the period of transaction of purchase and sale undertaken by the assessee. He further submitted that the assessee has otherwise proved the genuineness of purchase and sa....
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....statement furnished by the assessee. From the point of view of the assessee, he has purchased and sold the shares through an authorized share broker, who has executed the transactions by furnishing broker notes. The report given by BSE only shows that there may be some irregularities on the part of the share broker. In our view, such kind of irregularities, if any, committed by share broker cannot be a ground to suspect the genuineness of purchase and sale of shares undertaken by the assessee. 10. We noticed that the assessee has furnished copies of contract notes in support of the purchase and sale of shares. He has also furnished copies of demat account which shows entry and exit of shares. The assessee has also received payment towards ....