THE DY. CIT, CENTRAL CIRCLE-1,, VADODARA vs. M/S. FARMVILE ENTERPRISE,, VADODARA

The grounds of appeal are as under:- “1.1 That the Ld CIT(Appeals) has erred in upholding the additions made by assessing officer for Rs 14,49,085 being allegedly unexplained credit on account of trading in shares of Safal Herbs Limited. 1.2 That the Ld CIT(Appeals) has erred in holding that transactions carried out by appellant in the shares of Safal Herbs Limited are not genuine though the shares are sold in open market. STT is paid, shares are transferred from demat account and sale consideration is received through banking channel.

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

The ld. A.R. submitted that the transaction carried out by the assessee in the shares of Safal Herbs Ltd. are genuine transactions though the shares were sold in open market, the securities transaction tax was paid, the shares were transferred from demat account and sale consideration was received through banking channel. The ld. A.R. submitted that the assessee at no point of time was involved in the case of accommodation entry operator Jignesh Shah and there was connection established by the Assessing Officer to that extent. The ld. A.R. further submitted that in alternate that whether the said amount should have been reduced from the turnover and the assessee should have allowed this amount while declaring loss to the extent of turnover.

The ld. D.R. relied upon the assessment order and the order of the CIT(A).

We heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee has earned long term capital gain by selling 4350 Roshniben Sumanlal Kapadia, A.Y. 2013-14 shares of Safal Herbs Ltd. though the assessee has purchased only 50 shares on 08-04-2011 and sold the said shares on 11- 06-2012. Thus, the assessee has earned short term capital gain. From the perusal of the submissions made before the Assessing Officer dated 18-02-2022, 07-08-2021 and 10-03-2022, it is clear that the assessee sold share on 29-06-2012 and 13-07- 2012 and the assessee has not shown any long term capital gain in the return of income. But this was a mistake on part of the assessee and therefore the sale of shares is shown in trading account thereby offered as income by the assessee. The ld. A.R.’s contention during the year, the total purchase of shares is Rs. 28,95,677/- and sales of share is Rs. 40,65,486/- in various companies. The purchase price of shares of Safal Herbs Ltd. is only Rs. 23,452/- which is less than 1% of total purchase price but the assessee has not shown this income. This plea of the Ld. AR does not sustain as the assessee has not demonstrated before the Assessing Officer as well as before the CIT(A) that his mistake was not intentional or the purchase was genuine. Therefore, this ground of assessee will not sustain, hence dismissed. Since the main ground is dismissed, the alternative ground that The turnover of the assessee is reflecting the loss in the present assessment year, also do not have any base as the Assessing Officer has taken into account all the aspects about the capital gain in assessee’s income and thereafter, assessed the total income of the assessee. Therefore the alternate plea whether the loss was taken into account or not needs no verification. Therefore, this alternative plea is rejected. Thus, the appeal of the assessee is dismissed.