TaxTMI 
TaxTMI 
2022 (12) TMI 443
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....gether and disposed of by this common order. 3. The first identical issue involved in these appeals is as to whether the Ld.CIT(A) was justified in confirming the action of the Ld.Assessing Officer (Ld.AO) in making an addition under section 69 of the Act in respect of purchase price of the shares of Sacheta Metals Ltd, in the facts and circumstances of the instant case. 4. We have heard the rival submissions and perused the materials available on record. The assessee is an individual and has filed his return of income for the assessment year 2005-06 on 11/08/2005 which was duly processed under section 143(1) of the Act. Later, his assessment was sought to be reopened by issuance of notice under section 148 of the Act based on some in....
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....unt payee cheque only. In fact, during the course of re-assessment proceedings, a statement was recorded by the Assessing Officer under section 131 of the Act. In response to the question No.4 thereon, the assessee had categorically stated that payment for purchase of shares was made by him through account payee cheque in A.Y. 2006-07. The relevant operative portion of the questions raised by the Ld.AO, while recording statement under section 131 of the Act and replies given thereon by the assessee are reproduced hereunder for the sake of convenience:- "Q4. We have got information that during the course of search & se u/s 132 of the IT Act in the case of Mahasagar Securities Pvt. Lt on 25-11- 2009 by DDIT(Invg)Unit-l(IV) . It was r....
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....SE rules, Transaction done for the settlement No-1 & 2 will fall under the next FY Therefore transaction dt 30-03-2005 will be taken for FY 2005-06 pertaining to AY 2006-07. We are hereby submitting copy of BSE settlement for last 6 Years, transaction done on last 2 days of March considered to the next FY. Q-7 As per mercantile method of accounting followed by you the transaction for FY 2004-05 covers the period 1-04-2004 to 31-03-2005 as per IT Act. Please explain why the BSE rules should be followed by this Dept for the transaction covered in FY 2005-06? Please explain. A-7 It is easy for us to maintain and tally accounts that why BSE rules are followed. Q-8 The said transaction is not reflected in FY 2....
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....u give any explanation for the same. A-14 1 have made all the payment through cheques and the stock is reflected through DEMAT Account I content that the transaction is genuine." 6. The Ld.AO observed that since assessee had purchased the shares from a broker entity belonging to Shri Mukesh Choksi group, the transactions of purchase of shares was concluded to be bogus. He also observed that assessee had indeed made purchase of shares of Sacheta Metals Ltd in A.Y. 2005-06 itself, completely ignoring the contentions of the assessee regarding the settlement rules of Bombay Stock Exchange. Accordingly, he added the value of purchase of shares as unexplained investment under section 69 of the Act for the assessment year 2005-06. This....
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....ource of credit; and (g) Copy of assessee's ledger in the books of Bonanza Stock Broker Pvt Ltd (broker) through whom shares were bought and sold in A.Y. 2006-07. 8. The assessee also made some additional purchase of shares of Sacheta Metals Ltd during A.Y. 2006-07 and had sold the entire shareholding through Bonanza Stock Broker Pvt Ltd. The sale proceeds received on sale of shares were duly offered by the assessee as business income as he is engaged in the business of share trading. It is not the case of the Revenue that the sale proceeds received by the assessee on sale of shares is bogus wherein the nature and source of receipts is not established. Absolutely no discrepancy was pointed out by the Revenue in both the years as....
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....in respect of Sacheta Metals Ltd. 10. During the A.Y. 2006-07, the assessee had also made purchase of shares of Sundaram Finance Ltd. Since the said purchase of 10,000 shares of Sundaram Finance Ltd was made by the assessee from a broker entity belonging to Shri Mukesh Chokshi group, the Ld.AO concluded that the said transaction of purchase is bogus and accordingly made addition under section 69 of the Act in A.Y. 2006-07. Here also, the assessee had made purchase by making payment by account payee cheques out of sources drawn from his bank statement. The shares have been duly dematerialised as is evident from the DEMAT statement. These shares were subsequently sold in 2 tranches by the assessee through the registered stock broker, Bonan....