TaxTMI 
TaxTMI 
2025 (2) TMI 185
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....Income-tax 6(3), Mumbai, passed under section 143(3) read with section 147 of the Act, date of order 05/12/2013. 2. The assessee has taken the following grounds of appeal:- "a. On the facts and circumstances of the case, and in Law, CIT(A), NFAC erred in confirming the addition of Rs. 5,32,900/- u/s 69 of the Act as Unexplained Investment towards the alleged bogus purchase of shares as undisclosed income based on surmises and conjectures, without any evidence. b. The CIT(A) Failed to appreciate that: - i. The all the sales and purchases were made through recognized brokers. ii. The sales and purchases were properly reflected in the Demat statements. iii. All the payments and receipts are made from bank Accounts. c. Your appella....
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....) on December 1, 2005. The shares were duly delivered to the demat account of the assessee. It was further stated that the shares of "Sundaram Multi Pap Ltd." underwent a stock split in the ratio of 1:10 on 01/12/2005. Consequently, the total number of shares held by the assessee increased proportionately from 13,000 to 1,30,000, without any change in the overall value. Subsequently, the assessee sold the shares in a staggered manner, totaling 1,38,000 shares, and received a sale consideration of Rs. 17,35,429/-. After deducting the purchase cost of Rs. 5,32,900/-, the assessee declared a profit of Rs. 12,02,349/-, which was offered for taxation as short-term capital gains in the return of income. The Ld. AO upon verification of the natur....
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....lti Pap Ltd from M/s Alliance Intermediateries & network P Ltd which is a group company of Mahasagar Securities Group. The shares of Maruti Infrastructure Ltd were claimed to have been purchased on 16th May 2005 and that of Sundaram Multi Pap Ltd on 4th July 2005. 7. As per the contract note submitted by the assessee, M/s Alliance Intermediateries& network P Ltd was member of NSE stock exchange (NSE hereafter). Therefore, notice u/s 133(6) was sent to NSE who replied that this particular party was suspended from exchange from 19th February 2004. The copy of the letter of NSE has since been provided to the assessee. 8. Further enquiries were made from Registrar of transfer of shares of both the companies. M/s Link Intime India P Ltd ha....
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.... P Ltd cannot be considered as payment for purchase of shares. 11. The above facts only prove that the assessee purchased these shares in off market in cash and obtained the fictitious bills from M/s Alliance Intermediateries & network P Ltd. Therefore the investment in shares under consideration remained unexplained. The onus was on the assessee to establish that the genuineness of the aforesaid purchases in given circumstances where the contract note was found to be bogus and there was no purchase so such shares as claimed to have been done by the assessee. However the assessee failed to discharge its onus. 12. During the year, the assessee declared short term capital gain of Rs 32,03,596/-. Out of which the transactions pertaining ....
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....income, penalty proceedings u/s 271(1)(c) has been separately initiated." 6. We heard the rival submissions and considered the documents available in the record. The addition was made by the Ld.AO without considering the proper transactions and the addition was confirmed Rs. 10,28,199/-. The Ld.CIT(A) only restricted the addition related to payment for purchase of the shares amount to Rs. 5,32,900/-. The Ld.CIT(A) has taken a view in para 5, which is as follows: - "In this ground the appellant has challenged the re-opening of the case. The appellant has submitted that sufficient and relevant materials are not on record. It has also been submitted that all the transactions were through banking channel. The appellant relied on various judg....
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....oceeds and the short-term capital gains as declared by the assessee in the ROI. However, the Ld. AO's observation regarding the calculation of the purchase value was found to be incorrect and was duly rectified by the Ld. CIT(A), who deleted the excess addition. It is noted that no allegations were made against the sale transactions, or the profits declared by the assessee. The Ld. AO's focus was solely on the purchase of shares for the purpose of making the addition. Upon verification through notice issued under Section 133(6) of the Act, it was observed that the contract note issued by the broker had been suspended by the National Stock Exchange (NSE). Nonetheless, the sales transactions and the corresponding profits were duly accepted, ....