2016 (12) TMI 1890

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....epting the contention of the Assessee that purchase and sale of shares was genuine, which was substantiated by bogus documents. (iii) On the facts and circumstances of the case, the Ld. Commissioner of Income Tax(A) ought to have upheld the order of the Assessing Officer. (iv) It is, therefore, prayed that the order of the Ld.CIT(A) may be setaside and that of the Assessing Officer be restored. 3. Now we take up the Revenus appeal in ITA No. 1441/Ahd/2013 for assessment year 2009-2010. The revenue has taken the following grounds. (i) The ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.89,90,400/- made u/s.69 treating the share transaction as being unexplained source. (ii) The ld. CIT(A) has erred in law and on facts in accepting the contention of the Assessee that purchase and sale of shares was genuine, which was substantiated by bogus documents. (iii) On the facts and circumstances of the case, the Ld. Commissioner of Income Tax(A) ought to have upheld the order of the Assessing Officer. (iv) It is, therefore, prayed that the order of the Ld.CIT(A) may be setaside and that of the Assessing Officer be....

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.... profit/loss, short term/long term capital gain / loss, commodities profit/loss on commodity trading (through MCX). The assessee was one of the beneficiaries because assessee has also done some transactions with the M/s. Mahasagar Securities Pvt. Ltd. 9. The modus operadi adopted by the assessee is same as accepted by the prop. of the M/s. Mahasagar Securities Pvt. Ltd. as the shares reflected in the demat account of the assessee are coming within the one week of the sale. 10. Since, it is very clear that the sales of the assessee were genuine but purchases for the alleged shares were bogus. This facts was also supported by demat statement of the assessee in which the alleged share came within one week of the sale. Further, the payment for the all the shares purchase has been made after the sales. 11. Hence, considering the above facts and circumstances, assessee was given a show cause that your purchase from M/s. Mahasagar Securities Pvt. Ltd. seems bogus because as per NSE and ISE M/s. Mahasagar Securities Pvt. Ltd. is no more existed. Further, NSE and ISE has denied about any transactions in your name, so, why should not your capital gain be treated as cash credit u/s.6....

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....tries provided by M/s.Mahasagar Securities Pvt. Ltd. Hence, in view of the above total capital gain of the assessee of Rs.69,28,919/- is treated cash credit u/s.68 of the I.T. Act, 1961 i.e. income from other sources. Penalty u/s.271(1)(c) of the I.T. Act, 1961 has been initiated for furnishing inaccurate particulars. 15. Subject to above, the total assessed income is computed as under: Total Income as per return of income : Rs.79,08,620/- Less: STCG as shown in the return (treated separately) : Rs.69,28,919/- Total income other than STCG Rs. 9,79,701/- Add: Addition u/s.68, income from other sources Rs.69,28,919/-   Rs.79,08,620/- Add: STCG Rs. NIT Assessed total income Rs.79,08,620/- 16. Against this AO order appellant preferred first statutory appeal befor the ld.CIT(A)- Ld.CIT(A) held the AO has made following two further observations which also weighed him to believe that purchase of shares were not genuine: (a) the assessee has shown inability to submit the pool account of the broker in which assessee has stated to have kept the shares; (b) how the shares have been credited into DEMAT account of the assess....

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....dingly source of the sale proceeds credited to the bank account of the Assessee is found to be proved. Therefore, there is no undisclosed cash credit involved in this case and therefore addition could not have been made by the AO u/s. 68 of the Act. 20. Ld.CIT(A) also observed that the conditions to invoke section 68 of the I.T. Act, 1961 are not prevailing in this case especially cogent explanation supported by plethora of evidence is on record. Considering the facts and circumstances of the case, I decide that the AO is not justified in making addition u/s. 68 of the Act on account of unexplained cash credit u/s.68 of the Act, and therefore, the same is hereby deleted. 21. Finally, the appeal of the assessee are partly allowed by the ld.CIT(A). 22. Now matter is before us, we have gone through the relevant record and impugned order and we find that (a) assessee had purchased concerned shares through "off-market trade" however ISE, BSE and NSE informed AO that no transaction has taken place in the name of assessee. (b) Concerned shares were kept in pool account which shows that such shares were not purchased by assessee. (c) Shri Mukesh Cokshi, director of Mahasagar Secur....