THE COMMISSIOENR OF INCOME TAX-III, LUDHIANA vs. VIVEK MEHTA ETC, LUDHIANA

IN THE HIGH COURT OF PUNJAB AND HARAYANA AT CHANDIGARH Date of Decision: 14.11.2011 The Commissioner of Income Tax-III, Ludhiana ….Appellant Versus Vivek Mehta ….Respondent CORAM: HON’BLE MR. JUSTICE HEMANT GUPTA HON’BLE MR. JUSTICE G.S. SANDHAWALIA Present: Shri Rajesh Katoch, Advocate, for the appellant. Ms. Radhika Suri, Advocate, for the respondent.

HEMANT GUPTA, J. The revenue is in appeal under Section 260A of the Income Tax Act, 1961 (for short `the Act’), raising the following substantial questions of law:- (i) Whether on the facts and in the circumstances of the case, the Hon’ble ITAT is right in upholding the order of CIT(A) dated 30.9.2008, thereby deleting the addition of Rs.19,50,590/- made on account of unexplained deposits in the bank account, on the alleged purchase/sale of shares, as the assessee could not prove the genuineness of the purchase/sale of shares. (ii) Whether on the facts and in the circumstances of the case, the Hon’ble ITAT is right in upholding the order of CIT(A) thereby deleting the addition of ( 1)

Rs.58,518/- made on account of commission paid by the assessee outside the books of account on the alleged purchase of shares. The said questions of law are said to have arisen out of the order passed by the Income Tax Appellate Tribunal, Chandigarh Bench (for short `the Tribunal’) vide order dated 26.2.2010 in ITA No. 174/Chd/2008 for the assessment year 2003-04. The assessee declared long term capital gain on sale/purchase of the shares of M/s Master Trust Ltd. and claimed the same as exempt under Section 54F of the Act. The Assessing Officer held that the purchase of shares of M/s Master Trust Limited, was bogus and manipulated and therefore, the subsequent sale was also bogus. It was thus, held that the assessee introduced his unaccounted income under the garb of long term capital gain and claimed same as exempt under Section 54F of the Act. As a result of the aforesaid calculations, the credit entries in the Bank account of the assessee reflecting sale consideration of shares amounting to Rs.19,54,500/- were found to be unexplained credits and added to the income of the appellant under Section 68 of the Act. The Commissioner of Income Tax, accepted the appeal filed by the assessee after holding that the assessee has purchased 1,50,000 shares of M/s Master Trust Limited for Rs.3,03,000/- through M/s Deepak Share and Stock Brokers Pvt. Limited on 16.3.2001. The said shares were sold on 24.5.2002 for a sum of Rs.19,54,500/- through M/s R. Kohli and Company. It also found hat the assessee has earned profit of Rs.3,03,575/- on the date of purchase of shares of M/s Himachal Futuristic Limited and invested in the purchase of shares of M/s Master Trust Limited. Such finding was recorded by the Commissioner in Appeal on the basis of evidence ( 2)

produced by the assessee disclosing Permanent Account Number (PAN) of M/s Deepak Shares and Stock Brokers Ltd. The Commissioner of Income Tax (Appeal) returned a finding that it was a genuine transaction of purchase of shares through M/s Deepak Shares and Stock Brokers and also the sale thereof through M/s R. Kohli and Company and the assessee has assessed the genuine long term capital gain. Such finding was affirmed in appeal by the Tribunal. On the basis of the documents produced by the assessee in appeal, the Commissioner of Income Tax (Appeal), recorded a finding of fact that there was a genuine transaction of purchase of shares by the assessee on 16.3.2001 and sale thereof on 21.3.2002. The transactions of sale and purchase were as per the valuation prevalent in the Stocks Exchange. Such finding of fact has been recorded on the basis of evidence produced on record. The Tribunal has affirmed such finding. Such finding of fact is sought to be disputed in the present appeal. We do not find that the finding of fact recorded by the Commissioner of Income Tax in appeal, gives give rise to any question(s) of law as sought to be raised in the present appeal. Hence, the present appeal is dismissed.

(Hemant Gupta) Judge (G.S. Sandhawalia) Judge 14.11.2011 Meenu/ds ( 3)