TaxTMI 
TaxTMI 
TaxTMI 
2012 (8) TMI 1249
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.... on the facts and in the circumstances of the case and in law, the learned CIT (A) has erred in directing the A.O. to treat sale of shares as long term capital gain and allow deduction under section 54 of the Act considering the additional evidence submitted before him, ignoring the fact that:- a) The transaction of sale of shares was a sham transaction and have not taken place as per the Bombay Stock Exchange. b) Admitting the additional evidence without giving the A.O. an opportunity is violation of Rule 46A of the Act." 2. Brief facts relevant for adjudication of the issue involved are that the assessee had purchased 23,500 shares from Giltfin Lease Ltd. (now changed to M/s. Media Matrix Worldwide Ltd.) for Rs. 2,36,....
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....nd the broker has already provided names of the parties to whom the sales were effected. Before the learned Commissioner (Appeals), all the particulars, as required by the Assessing Officer, were filed. 5. The learned Commissioner (Appeals) directed the Assessing Officer to make enquiries to the issues raised by the assessee and also various other evidences which were filed at the stage of the appellate proceedings. In response, the Assessing Officer submitted its remand report dated 27th March 2006, which has been taken into cognigance by the learned Commissioner (Appeals) and reproduced the relevant portion in the appellate order. The learned Commissioner (Appeals), after taking into consideration the relevant material placed on record....
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....sessment proceedings. It has been submitted by the AR of the appellant that the shares have been sold not through stock exchange but off the market. It was because of this fact that the stock exchange did not report the transactions of the shares to the AO. A notice was issued by the AO to DNA Broking for verification who submitted its reply on 29.03.2005. In the reply the broker has confirmed the sale of shares on behalf of the appellant and enclosed copy of the sale bills, copy of the bank statement reflecting payment made to the appellant, copy of return of income for A.Y, 2002-03 and also furnished registration No. with SEBI and clarified that shares have been sold off market to Smt. Banumati Gin and Smt. Alka Vyas through him. Thu....
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....tendance of the purchase broker i.e. M/s. Scorpio Management Consultant Pvt. Ltd. cannot be held against the appellant in view of the fact that most of the vital evidences have been furnished by the appellant with regard to its claim of purchase of shares. Further, the company whose shares were purchased has also confirmed that 23,500 equity shares of M/s. Giltfin Lease Ltd. were duly transferred in the name of the appellant. 2.5 As regards to the sale of these shares the same had been done through broker M/s. DNA Share Broking of Mumbai. The share broker has not merely confirmed of having sold the shares of on behalf of the appellant but has also disclosed as to whom the shares were sold by him. As regards to the PAN of M/s. DNA, ....
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....s the assessee has failed to give cogent reasons as to why the details and evidences could not be filed before the Assessing Officer. He finally relied upon the findings of the Assessing Officer. 7. On the other hand, the learned Counsel for the assessee submitted that the only reason for disbelief by the Assessing Officer was that the shares have been transacted off market and, therefore, it is a sham transaction. This view of the Assessing Officer cannot be upheld in view of the judgment of Hon'ble Jurisdictional High Court in CIT v/s Smt. Jamnadevi Agrawal & Ors. (2010) 328 ITR 656 (Bom.), wherein it has been held that off market transactions cannot be the ground to treat the sale transaction of shares as sham. 8. We have heard....
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....td., the shares of which were purchased, have also confirmed having transferred the share in the name of the assessee vide its letter dated 10th May 2000, giving the distinction number of the shares. These shares have also been disclosed in the balance sheet filed along with the return of income for the assessment year 2001-02, which has not been disputed by the Department; Secondly, the sale of these shares through M/s. DNA Share Broking has also been confirmed by the said broker along with bills which was submitted before the Assessing Officer; Thirdly, the shares which have been sold off the market cannot be held to be a bogus as the documentary evidence show that the sale has actually taken place. The judgment of Hon'ble Jurisdictio....