TaxTMI 
TaxTMI 
2018 (11) TMI 1842
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....he assessee has purchased shares from M/s. Alliance Intermediaries & Network Pvt. Ltd., one of the group companies of Shri Mukesh Choksi. Hence, the Assessing Officer reopened the assessment of both the years under consideration. The assessee furnished relevant details to prove the purchase and sale of shares. It was submitted that the shares were transferred to the demat account of the assessee and later on sold through another broker named M/s. Kotak Securities Limited. The Assessing Officer noticed that the shares were transferred to demat account of the assessee only a few days before the date of sale. Further, since the transactions done by M/s. Alliance Intermediaries & Network Pvt. Ltd., were considered to be bogus, the Assessing Officer took the view that the assessee could not explain sources of purchase of shares. Accordingly, the Assessing Officer assessed both purchase value and sale value of shares aggregating to Rs. 85.90 lakhs as income of the assessee under the head Income from other sources in A.Y. 2007-08. Similarly the AO assessed Rs. 81.28 lakhs relating to purchase and sale value of shares in A.Y. 2008-09 as income of the assessee under the head income fr....
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....ech etc. These shares do not fall under the category of penny stock. He further submitted that these are not the only share transactions undertaken by the assessee. He further submitted that these shares have been transferred to the demat account of the assessee and further sold through another reputed broker M/s. Kotak Securities Ltd. Accordingly he submitted that the order passed by the learned CIT(A) does not call for any interference. The Ld A.R also placed his reliance, inter alia, on following case laws:- (a) CIT vs. Pinakin L Shah (ITA 3380 of 2010 dated 18-01-2012)(Bom) (b) Arvind Asmal Mehta vs. ITO (ITA No.2799/Mum/2015)(Mum-Trib) (c) Smt. Sarita Devi vs. ITO (ITA No.1228/Hyd/2016)(Hyd-Trib) 7. We have heard the rival contentions and perused the record. We noticed that the learned CIT(A) has deleted the addition made by the Assessing Officer in A.Y. 2007-08 with following observations :- 3.8 I have considered the submissions of the Appellant, impugned assessment order and the material available on record. During the course of the appellate proceedings the Appellant furnished the details of the share transactions made during the year alongwith the ledger account o....
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....the sales transaction. This transfer of shares from one demat account to another cannot change the holding period of the shares or challenge the genuineness of the transaction. This prerogative is entirely of the Appellant and the fact that all the gains/profit have been computed correctly and offered to tax as per the tax laws relieves the Appellant of all the obligations that may arise out of the purchase/sale transaction. b. Secondly, the very fact that the Assessing Officer has stated that the shares were transferred to Kotak few days before sale, clearly implies that the Appellant had made genuine purchased. If the purchased would have been bogus (as alleged by the Assessing Officer), the shares could not have been transferred to Kotak Securities demat account. c. Thus, the Assessing Officer is contradicting his own statements by first holding that the shares purchased are bogus and then admitting to the fact that the shares are transferred to Kotak Securities account few days before sale." 3.11 The Appellant has substantiated the genuineness of purchases by submitting the scrip wise sales details which clearly reflects that the sales made were no short sales (i.e. sales....
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....contentions and perused the record. It is an undisputed fact that the assessee was having regular dealings in shares and declaring income from capital gains in the earlier years also. The assessee has carried out number of transactions of purchase and sale of shares. The AO has doubted only the transactions relating to shares purchased from M/s Alliance Intermediaries & Network P Ltd, since it was a company belonging to Mukesh Choksi group. The assessee has declared income on sale of shares under the head Business and also capital gains. The Ld A.R submitted that the AO has taken the purchase price of Hindustan Zink wrongly as Rs. 9,35,864/-, while the correct purchase cost was Rs. 21,89,439/-. All the shares considered by the AO were shares of reputed companies and they do not fall under the category of penny stocks. 9. We notice that the AO has mainly placed his reliance on the statement given by Shri Mukesh Choksi. The Ld D.R also contended that the Tribunal has also accepted that he has provided only accommodation entries by charging commission income. The Ld A.R, on the contrary, contended that the statement so given by Shri Mukesh Choksi is a self serving statement and....