SHRI KRISHNA SHRIRAM,NEW DELHI vs. ACIT, NEW DELHI

In the Income-Tax Appellate Tribunal, Delhi Bench ‘D’, New Delhi

Before : Shri Amit Shukla, Judicial Member And Shri L.P. Sahu, Accountant Member

ITA No. 866/Del/2013 Assessment Year: 2006-07

Krishna Shriram, D-46, vs. ACIT, Circle 32(1), Malcha Marg, New Delhi. New Delhi. PAN- AABPS 4899L (Appellant) (Respondent)

ITA No. 1417/Del/2013 Assessment Year: 2006-07

DCIT, Circle 32(1), vs. Krishna Shriram, D-46, New Delhi. Malcha Marg, New Delhi. (Appellant) (Respondent)

Assessee by Sh. Ajay Vohra, Sr. Advocate Sh. Deepesh Jain, C.A. Revenue by Sh. Vijay Verma, CIT/DR Sh. Amit Jain, Sr. DR

Date of Hearing 16.08.2018 Date of Pronouncement 13.09.2018

ORDER Per L.P. Sahu, A.M.: These are cross appeals filed by the assessee and the Revenue against the order passed by the ld. CIT(A)-XXVI, New Delhi dated 28.12.2012 for the assessment year 2006-07. The grounds raised by both the parties in their respective appeals read as under:

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Grounds raised by assessee in ITA No. 866/Del/2013: 1. That on the facts and circumstances of the case and in law, the Commissioner of Income-tax (Appeals)-XXVI, New Delhi (“the CIT(A)”) erred in upholding addition of Rs.7,92,00,000 made by the assessing officer under section 69 of the Income-tax Act, 1961 (“the Act”).

1.1. That the CIT(A) erred on facts and in law in failing to appreciate that the aforesaid amount of Rs.7,92,00,000 was received as gift by the appellant from his mother out of natural love and affection which was exempt under section 56(vi) of the Act.

1.2. That the CIT(A) erred on facts and in law in alleging, merely on the basis of conjectures and surmises, that the appellant had channelized his own funds in the guise of the above gift received from the donor.

1.3. That on the facts and in the circumstances of the case, the CIT(A) erred in law in concluding that the appellant could not discharge the onus of proof cast under section 69 of the Act, thereby failing to appreciate that the appellant had duly furnished requisite evidence to prove the genuineness of the transaction of the gift received as well as creditworthiness/ source of the donor out of which the above gift was made.

1.4. That on the facts and in the circumstances of the case, the CIT(A) failed to appreciate that gift received from donor, being otherwise exempt under section56(vi), the same could not have been brought to tax by invoking provisions of section 69 of the Act.

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term capital gains’ by the appellant should be treated as ‘long term capital gains’.”

Grounds raised by the Revenue in ITA No. 1417/Del/2013: 1. The CIT(A) has erred in deleting the addition of Rs.67,37,94,898/- by directing the AO to treat the profit arising from the sale of shares as long term and short term capital gains.

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____________________ Profit on sale of Mawana Shares Rs.67,37,94,898/- ____________________

Short term capital gain Annexure-C Nos Cost price Date of Rate Date of Full value of Capital gain Name of the Sale per transfer/sale consideratio / (loss) share acquisition value unit n per unit (Rs.) Mawana Sugars 11000 822181 74.74 16.06.2005 31.03.2006 120.56 84392000 Ltd.

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10000 94.69 946948 20.10.2005 0.00 679000 12.11.2005

1769129 Total 700000 2.53 84392000 82622871 Less: Set off of brought forward short term loss - 2002-03 326760 82296111

From the above annexures B and C, the AO observed that the assessee had not purchased these shares for the purpose of investment. Therefore, he issued notice to the assessee regarding the details of purchase and sales of shares which was submitted before the Assessing Officer as under :

Particulars Opening balance Additions Deletion Closing balance Remarks

No. of Amount No. of Amount No. of Amount No. of Amount shares (Rs.) shares (Rs.) shares (Rs.) shares (Rs.) Daurala organics 2500 25000 2500 25000 Ltd. of Rs.10/- As per scheme each fully paid of Merger up between Daurala Organics Ltd. (DOL) and DCM Shriram Industrial Ltd. (DSIL) one equity share of DSIL issued to the shareholder of DOL in lien of 10 (ten) Equity share of DOL DCM Shriram 25000 250 25000 -do- Industrial Ltd. of 250 Rs.10/- each fully paid up Funkalscious Written off during 100 1000 100 1000 Hospital Pvt. Ltd. the year o Rs.10/- fully paid up

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Hurryknshna 150000 1500000 270000 2700000 420000 4200000 Venture Pvt. Ltd. Paid on 14.11.2005 from of Rs.10/- each HSBC Ltd. New fully paid up Delhi out of sale proceeds of MS Ltd. shares India 4181 3000000 4181 3000000 Infrastructure Publishing of Finance 59 59 Technologies India Ltd. of Mawana Sugars 3077500 35061352 3077500 21910382 13150970 Balance amounts Ltd. of Rs.10/- is In books is on each fully paid account of short up of Rs.10/- adjustment of each fully paid cost. This has no up impact on taxable income 11000 equity share purchase on for Rs.8,22,185/- and 10000 equity shares purchase on for Rs.948006/- payment from HSBC Ltd. Purchased from 1770191 1770191 21000 21000 market Mawana Sugars 1716624 1216742 1716624 6008184 1716624 18134926 Call money paid Ltd. for Rs.10/- @ Rs.3.50 per each fully paid share on up of Rs.10/- 1716624 partly each partly paid paid up share of up @ Rs.6.50 per MSL Ltd. on share 24.08.2005 from HSBC Ltd. New Delhi Mawana Sugars 300000 300000 142100 Gift from Ltd. of Rs.10/- 2100000 679000 0 Enterprise Trust each fully paid 3231464 323146 Gift from Mrs. up of Rs.10/- 4 Raula Shriram each (Mother) Siel Ltd. of 1000 34417 1000 34417 Purchase from Rs.10/- each fully market paid up purchase from the market

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690000 690000 Siel Ltd. of Gift from Mrs. Rs.10/- each fully Raula Shriram paid up (Mother) Unit Trust of 573 573 India Ltd. Siel Holdinas Ltd. 152592 411998400 152592 411998400 Paid on 152592 equity 05.12.2005 shares of Rs.10/- Rs.103000000 each fully paid and on up and 125925 01.02.2006 equity shares of Rs.308998400/- Rs.10/- each from HSBC Ltd., partly paid @ New Delhi Rs.7.50 per share 125925 255000000 125925 255000000 Paid on 17.02.2006 Rs.85000000 and on 23.02.2006 Rs. 170000000 from HSCB Ltd.

Nanglamal 2100000 21000000 2100000 21000000 Sold to siel Sugars Ltd. of Holdings Ltd. Rs.10/- each fully 2100000 equity paid shares of Rs.10/- each fully paid up of Nanglamal Sugars Ltd. on same price on 08.07.2005

51714667 0 698536192 0 62841499 0 687409360

From the details of shares submitted by the assessee, the AO observed that the assessee has purchased shares worth Rs.69,85,36,192/- and sold shares worth Rs.6,28,41,499. List of shares also includes the shares of Mawana Sugar Ltd., part of which was received by the assessee as gift. On perusal of the statement of affairs of the assessee as on 31.03.2005, the assessee had shares worth Rs.5,17,14,667/- as on 31.03.2005 and shares worth Rs.68,74,09,360/- as on 31.03.2006. Accordingly, the AO concluded that the assessee is engaged in the

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trading activity for the purchase and sale of shares. In this regard the assessee was asked as to why the profit on sale of shares shown as LTCG/STCG may not be assessed as income from business. In this regard, the assessee submitted explanations vide latter dated 12.12.2011 and also relied on many case laws. In the original assessment proceedings u/s. 143(3), the contention of the assessee, i.e., sale of shares were accepted as long-term capital gains by the AO. Therefore, the CIT set aside the original assessment order and directed the Assessing Officer u/s. 263 to make fresh assessment. In the assessment proceedings u/s. 143(3)/263, the Assessing Officer after considering the submissions of the assessee and relying on many case laws, treated the sales of shares of Mawana Sugar as business income and made addition on profit on sale of shares at Rs. 67,37,94,898/-.

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explained and actually belongs to the donor. The assessee has not submitted any evidence which could prove that the donor Ms. Roula Shriram is owner of the fund given to him as gift. The copy of relevant bank A/c of Ms. Roula Shriram from which the fund has been transferred, has neither been furnished in original nor in afresh assessment proceeding. The assessee has also not furnished copy of Certificate of Foreign Inward Remittance which gives the details of beneficiary, remittance and also particular of remitter including his residential address & remitting bank. Even the gift deed and also the certificate signed by Ms. Roula Shriram, the donor does not state or give detail about the bank A/c from which the said remittance is stated to be made. In the bank statement of the assessee and also the telegraphic transfer credit advice issued by Hong Kong Shanghai Bank, the detail of remitter has been mentioned as CAMPBELL HOOPER. This again does not give any details about the bank account from which the said amount has been transferred/remitted to assessee. 13. As far as the creditworthiness of the donor is concerned, no document have been submitted by assessee to prove that Ms. Roula Shriram is a man of means. Ms. Roula Shriram is holding Indian Passport and also assessed to tax under PAN AACPS3802N. The details of assessable income returned by Ms. Roula Shriram for the relevant A.Y. 2006-07 were retrieved from the departmental data which gives the following details of total income as per the return filed by her in form 2D in Ward 32(2), New Delhi. A.Y. 2006-07 i. Income from salary NIL ii. Income from house property Rs.7,35,500/- iii. Income from business/profession Rs.3,30,065/- iv. Income from other sources + Income of any Rs.60.223/- other person Gross total income Rs.4,65,658/- Returned income Rs.4,65,658/- Tax paid Rs.86,197/-

13(a) An abstract of form 2D of Ms. Roula Shriram is attached to the order as annexure-'5'. The above details goes on to prove that the fund of Rs.7.92 crores does not belong to the donor and it is the assessee who has channelised/routed his own funds in guise of gift from mother. Mere remittance of amount by assessee's mother will not absolve him from discharging the onus casted upon him U/s 69 of the Income-tax Act, 1961.1 place reliance on the decision of hon'ble

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jurisdictional High Court pronounced in the case of CIT vs. Anil Kumar (2007) 292 ITR 552 which is on similar facts. In this case the Hon'ble Delhi High Court has held that in the case of gifts mere indication of the donor and showing the movement of the gift amount through banking channels is not sufficient to prove the genuineness of the gift. Since the claim of gift is made by the assessee, the onus lies on him not only to establish the identity of the person making the gift but also his capacity to make such a gift. In view of this, the assessee is duty- bound to explain not only to establish the identity of the person making the gift but also her capacity to make such gift. Thus, in all respect, the alleged gift of Rs.7,92,00,000/- is not proved satisfactorily and accordingly liable to be added in the income of assessee U/s 69 of the Income-tax Act, 1961 as unexplained deposit in bank account. 13(b) In fact what is appearing or shown/claimed as apparent is not real in this case. I quote the case of Sumati Dayal vs Commissioner of Income-Tax, 214 ITR 801(SC) wherein the Hon'ble Supreme Court held that (Emphasis supplied by me); "It is no doubt true that in all cases in which a receipt is sought to be taxed as income, the burden lies upon the Department to prove that it is within the taxing provision and if a receipt is in the nature of income, the burden of proving that it is not taxable because it falls within an exemption provided by the Act lies upon the assessee. (See Parimisetti Seetharamamma [1965] at page 536). But, in view of section 68 of the Act, where any sum is found credited in the books of the assessee for any previous year, the same may be charged to income-tax as the income of the assessee of that previous year if the explanation offered by the assessee about the nature and source thereof is, in the opinion of the Assessing Officer, not satisfactory. In such a case there is, prima facie, evidence against the assessee, viz., the receipt of money, and if he fails to rebut it the said evidence being unrebutted, can be used against him by holding that it was a receipt of an income nature. While considering the explanation of the assessee the Department cannot, however, act unreasonably. (See Sreelekha Banerjee's case [1963] 49 ITR (SC) 112 at page 120). In the instant case, the amount is credited in the capital account in the books of the appellant. The appellant has offered her explanation about the said receipts being her winnings from races. The said explanation has been considered in the tight of the sworn statement of the appellant dated

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January 6,1973, and other material on record. The Income- tax Officer and the Appellate Assistant Commissioner have not accepted the explanation offered by the appellant. The two members constituting the majority in the Settlement Commission have also taken the same view. There is no dispute that the amounts were received by the appellant from various race dubs on the basis of winning tickets presented by her. What is disputed is that were they really the winnings of the appellant from the races. This raises the question whether the apparent can be considered as the real. As laid down by this court the apparent must be considered the real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the reality and the matter has to be considered by applying the test of human probabilities. (See : CTT v. Durga Prasad More [1971] (SC), at pages 545, 547)." 13(c) In the case of assessee also; what is apparent is not true. The assessee has not either proved it to be true or to the satisfaction of the AO. In view of this, the reply of assessee and the evidences filed by him are held unsatisfactory and unacceptable. I, accordingly reject the same and make an addition of Rs.7,92,00,000/- in the income of assessee as unexplained deposits in bank A/c through foreign remittance. I also initiate penalty proceedings U/s 271(1)(c) of the Income Tax Act, 1961 for concealment of income as aforesaid and furnishing inaccurate particulars within the meaning of explanation 1 to the sub-section (1) of the section 271(1)(c) of the Income Tax Act, 1961.

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“In addition to oral arguments, which may be made at the time of hearing, the Revenue wishes to submit as under : 1. The assessee is the son of Shri Siddhrath Shriram, MD of Mawana Sugars Ltd. He has been Director of Siel Holdings Ltd, since 24.4.2007. He has been a Director of Siel Ltd earlier. It needs to be mentioned that Siel Ltd is the earlier name of Mawana Sugar Ltd. 2. The appeal against the order u/s 263, in pursuance to which the assessment order in this round was passed, was dismissed by Hon’ble ITAT vide order dated 29.01.2014, in ITA 1649/Del/2011. 3. During the relevant assessment year, the assessee claimed LTCG exempt u/s 10(38) of Rs. 59, 11,72,027/- and STCG [taxable at concessional rate) of Rs. 8,26,22,871/-. The LTCG is in respect of 50,94,124 shares of Mawana Sugar Ltd costing just Rs. 683,22,581/-. The sale value is Rs. 65;94,94,608/-. The purchase date of shares was from 30.1.2003 to 4.8.2004. The STCG is also in respect of the 7,00,000 shares of Mawana Sugar Ltd, the cost price being Rs. 17,69,129/- and sale price being Rs. 84,39,2000/-. 4. The shares of Mawana Sugar Ltd have been sold for Rs. 74.39 crores. The cost is Rs. 7 crores only. Only two other scripts have been sold by the assessee during the year of negligible amounts. Closing balance in respect scripts transacted during the year mainly consists of shares of Siel Holdings Ltd and Mawana Sugars Ltd. These details are available on page 2 and 3 of

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the assessment order, which establish that assessee is not an that the transactions are not regular investment transactions but an adventure in the nature of trade to reap profits on the basis of inside information regarding these scripts. Some shares of Mawana Sugar Ltd were also claimed to have been received as Gift from mother, just to give it a colour of Capital gains. The AO assessed the profits as business profits. 4.1 The findings of CIT (A) on page 26 and 27 of the appellate order are based on his observation that assessee was not connected with the management of M/s Mawana Sugar Ltd or in some way related to the management of M/s Mawana Sugar Ltd. This observation is not only factually in correct but also reflects too narrow a perspective to examine the true nature of transactions. Though CIT (A) accepted that the intention of the assessee is the factor, which should determine the true nature of transactions, but the factual basis of determining intention itself was wrong. His observations that the assessee did not indulge in frequent transactions in shares is irrelevant here as the issue involved in this case was whether transactions in single script were with intention to make profit. As observed by Hon'ble ITAT in order in respect of appeal pertaining to order u/s 263 the magnitude is also a determining factor to determine the true nature of transactions and not just the frequency. 5. Reliance is also placed on following decisions apart from decisions relied upon by the AO : 180 ITR 208 (Calcutta) - JAIPUR1A BROS LTD 100 ITR 706(SC) - Sutlej Cotton Mills Supply Agency Ltd 33 CCH 650 (1TAT-DEL)- SAT SAHIB SECURITIES LTD In the above case, it is humbly submitted that the following decisions may kindly be considered: 1 Manoj Kumar Samdaria Vs CIT (f2014l 45 taxmann.com 394 (Delhi)/r2014] 223 Taxman 245 (Delhi)(MAG) (Copy Enclosed) where Hon’ble Delhi High Court held that where assessee was selling shares very frequently, volume and magnitude was very high and he earned only a meagre amount of dividend, income arising from sales of shares was assessable as business income.

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2 Manoj Kumar Samdaria Vs CIT (f20141 52 taxmann.com 247 (SC)/f20151 228 Taxman 63 (SC) (Copy Enclosed) where Hon ble Supreme Court dismissed SLP against High Court's ruling that where assessee was selling shares very frequently, volume and magnitude was very high and he earned only a meagre amount of dividend income arising from sale of shares was assessable as business income 3. Sadhana Nabera vs ACIT (ITA No.2586/Mum/2009) (Copy Enclosed} where Hon’ble Mumbai High Court held that Sale & purchase of shares is business income. A copy of Circular No.4 of 2007 on the issue is also enclosed In the above case: (i) Volume of transactions was high — Shares worth Rs.69.85 crores purchased during the year & shares worth Rs.6.28 crores sold during the year (ii) Number of transactions was high (iii) Period of holding was low — From October 2003 to March 2006 (iv) It was not disclosed in Wealth Tax Returns (v) Dividend received is not mentioned. It was negligible. This shows that the motive for purchase of shares was to earn a profit. (vi) Earned profit of Rs.59.11 crores on investment of Rs.6.83 crores which is abnormally high. This is not normal investment activity, particularly when the assessee belongs to the Sri Ram Group and Mawana Sugars Ltd. is one of the Group companies. In view of the above facts and case laws, it is established that the assessee purchased the shares to earn profit. - Hence, the AO was perfectly justified in assessing income from sale of these shares under the head "Profit & Gains from Business or profession". On the issue of treatment of capital gains on sale of shares as business income, he relied on the order of the AO and on the issue of gift, the ld. DR supported

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the order of the ld. CIT(A). He further submitted that the case laws relied by the AR are not applicable in the present case. The shares of Mawana Sugars Ltd. were kept by the assessee for a very short span of time and therefore, they cannot be said to have been purchased for investment purposes. The classification in the balance sheet under the head investment is not conclusive factor to assume investment in shares. The quantum, frequency and value of shares should be kept in mind while charging the surplus/loss as business income or business loss in the hands of the assessee.

Long term capital gains Rs. 59,11,72,027/- Short term capital gains Rs. 8,26,22,871/-

In the original assessment, the Assessing Officer accepted the above profit as income from “capital gains” as declared by the appellant. The CIT, thereafter invoked the jurisdiction under section 263 of the IT Act and set aside the original assessment to assess the case denovo to re-examine the

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major issues. Thereafter vide order dated 29.12.2011, the Assessing Officer changed the character of the profit earned on sale of the above shares from ‘capital gains’ to 'business income’ on the ground that such shares constituted ‘stock-in-trade’ and not an investment’ as declared by the appellant. On perusal of material on record, it is noted that the appellant was holding the shares of M/s. Mawana Sugars Ltd. since 2003 and had also purchased certain shares of the same company in June, October and November 2005. Hence it is evident that the appellant did not indulge in frequent and regular transactions pertaining to the sale purchase of shares, but was holding for a considerable period of time. These shares which were held by the appellant since 2003 were sold after a period of more than 2 years and 6 months respectively. From this, it is evident that the appellant did not indulge in regular and requent sale of shares. This fact also draws its support from the charts furnished by the appellant, which the Assessing Officer incorporated in his order dated 29.12.2011, which clearly shows the period of holding.

7.1 It was further submitted by the appellant that during the previous year, relevant to the assessment year under consideration, the appellant sold the shares of only one company i.e. M/s. Mawana Sugars Ltd, held as investment on which the capital gain was earned and declared by the appellant in his return. It was also submitted that the appellant also sold the shares of Nangamalmal Sugars Ltd. during the year under consideration but no profit was earned on sale of the said shares. Hind that the Assessing Officer rejected the claim of appellant and held that the profit on sale of shares of M/s. Mawana Sugars Ltd as ' income’ mainly on the ground that-

On perusal of the material on record, it is seen that the appellant was not connected with the management of M/s. Mawana Sugars Ltd. The Assessing Officer did not bring any material on record to show that the

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appellant was in some way related to the management of M/s. Mawana Sugars Ltd. Therefore, the Assessing Officer’s observation that the appellant was involved in an insider trading is without any basis and based on conjectures and surmises. As per the provisions of Wealth Tax Act 1957, Wealth Tax is leviable in respect of assets defined under section 2 (ea) of WT Act 1957. On perusal of the section 2 (ea) of the WT Act, it is seen that “shares” held by an individual are not included as an “asset”. Therefore, the appellant rightly has not disclosed these shares in his wealth tax return. It is also noted that the appellant did not show these shares in his balance sheet as stock-in-trade.

7.2 Further, the Assessing Officer relied on various case laws for the proposition that there is no single factor that could determine whether the shares were held as ‘investment’ or ‘stock-in-trade’. The appellant also cited a number of cases in his favour wherein, it has been held that the ‘intention’ of the appellant is paramount in determining as to whether the impugned asset is to held as a capital asset or a business asset. The appellant also referred to several judicial precedents culled out of CBDT Circular no. 4 of 2007 dated 15.06.2007. The judgment of Bombay High Court in the case of CIT Vs. Gopal Purohit 336 ITR 287 against which the Hon'ble Supreme Court has dismissed the departmental SLP supports the contention of the appellant. The appellant has also cited the judgment of Delhi High Court in case of Rohit Anand reported in 132 ITR 445 and also CIT Vs. Vinay Mittal ITA 1172 page 26. The jurisdictional High Court in the case of Vinay Mittal, has held that it is the matter of ‘intention’ of the appellant which determines whether the shares purchased by him is to be treated as investment or business stock-in-trade.

"Whether a person dealing with shares has made an investment or has treated them as stock-in-trade, has been the subject matter of considerable debate. It is a matter of intention of the assessee, which has to be gathered from his conduct and surrounding circumstances. Various parameter/criteria have been elucidated and explained. A pragmatic and common sense approach has to be adopted, when we determine and decide the question always keeping in mind commercial consideration."

The appellant also cited a number of decisions of various High Courts and Tribunals who stated that the intention of the appellant is paramount to

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determine the character of the asset as to whether it is capital asset or business asset (stock-in-trade). The appellant has also cited the judgement of Bombay, Madras, Punjab and Haryana High Court in the following cases:

1) CIT vs. Girish Mohan Ganeriwale 260 ITR 417(P & H) 2) CIT vs. Ramaamirtham 306 ITR 239 (Mad.) 3) CTR vs. Gopal Purohit 228 ITR 582 (Mum)

To state that where it had been accepted as capital gains in the earlier years, the same cannot be treated as stock-in-trade in the subsequent years. In view of the above discussion, the detailed factors and past history of the appellant, it is seen that the appellant’s intention was to hold the shares as “investment” and not as stock-in-trade.

Therefore, the addition made by the Assessing Officer treating the profit on sale of shares as business income amounting to Rs.67,37,94,898/- is deleted and direct the Assessing Officer to treat the profit arising from the sale of shares of M/s. Mawana Sugers Ltd. as long term and short term capital gains as the case may be depending upon the holding period of shares in accordance with law. This ground of appeal is allowed.

(a) Where the assessee itself, irrespective of the period of holding the listed shares and securities, opts to treat them as stock-in-trade, the income arising from transfer of such shares/securities would be treated as its business income,

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(b) In respect of listed shares and securities held for a period of more than 12 months immediately preceding the date of its transfer, if the assessee desires to treat the income arising from the transfer thereof as Capital Gain, the same shall not be put to dispute by the Assessing Officer. However, this stand, once taken by the assessee in a particular Assessment Year, shall remain applicable in subsequent Assessment Years also and the taxpayers shall not be allowed to adopt a different/contrary stand in this regard in subsequent years; — (c) In all other cases, the nature of transaction (i.e. whether the same is in the nature of capital gain or business income) shall continue to be decided keeping in view the aforesaid Circulars issued by the CBDT. 4. It is, however, clarified that the above shall not apply in respect of such transactions in shares/securities where the genuineness of the transaction itself is questionable, such as bogus claims- of Long Term Capital Gain/Short Term Capital Loss or any other sham transactions. 5. It is reiterated that the above principles have been formulated with the sole objective of reducing litigation and maintaining consistency in approach on the issue of treatment of income derived from transfer of shares and securities. All the relevant provisions of the Act shall continue to apply on the transactions involving transfer of shares and securities. It is clear from the bill cum contract note submitted by the assessee that the transaction has been done through the stock exchange and the transaction has not been question by the Assessing Officer. Merely, he has disputed the taxability under the head capital gain or business income. The circulars cited by the AR are applicable in the present case. In view of the above, the ld. CIT(A) has rightly deleted the addition made by the AO. Therefore, the appeal of the Revenue is dismissed.

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10.1 On perusal of the material on record, I find that the appellant has not furnished any evidence pertaining to the funds of the donor, Smt. Roula Shriram. Despite of specific requirement the appellant failed to furnish the copy of the bank account of Smt. Roula Shriram from where the gift was given to the appellant. The appellant did not furnish a copy of the inward remittance giving the particulars of the remitter, residential address of the remitter, details of the beneficiary etc. The details of the remitter was mentioned as Campbell Hooper, in the telegraphic transfer advice. Campbell Hooper seems to be an intermediary.

10.2 The appellant did not file any document to substantiate the creditworthiness of Smt. Roula Shriram. The Assessing Officer also mentioned that Ms. Roula Shriram is holding an Indian passport and assessed to tax under PAN AACPS3802W. The Assessing Officer retrieved the data from the departmental database and found that Ms. Roula Shriram did not have the creditworthiness to gift an amount of Rs.7.92 crore.

10.3 In the submission and the rebuttal filed by the appellant during the course of appeal t proceedings before me, the appellant has not chosen to file any additional evidence to explain the source of the gift from the donor, and has instead argued on technical ground pertaining to the provisions of section 69A its applicability by the Assessing Officer in the present case. The appellant also vehemently argued that a bank pass book is not part of the books of accounts of the appellant. The appellant has failed to avail the opportunity to furnish requisite documentary evidence as required to prove the genuineness of the gift^ Reliance is placed on the Hon'ble Delhi Tribunal judgment in the case of Asstt. Commissioner of Income-tax vs. Sanjeev Batra (1999) 69 ITD 23 Delhi where it was held that necessary evidence in the shape of income earned by the donor as also the financial status at the time of making the gift is necessary to prove the genuineness of the gift. In the present case despite of repeated queries the statement of the bank account of the donor Ms. Roula Shriram was not furnished by the appellant and the income tax returns filed by her did not substantiate her

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creditworthiness to extent an amount of Rs.7.92 crores as a gift to her son i.e. the appellant. In the absence of documentary evidence to prove the source of the gift, the case law mentioned above clearly sums up the case of the Assessing Officer. In view of the above discussion, there is no justification or reason for me to interfere in the order passed by the Assessing Officer u/s 143(2) dated 19.12.2011. Therefore, the decision of the Assessing Officer is upheld and the addition made by him amounting to Rs.7.92 crores is hereby confirmed.”

From the above findings recorded by the CIT(A), it is clear that creditworthiness of the donor has not been proved as also the original source of money advanced as gift. The assessee has submitted only inward remittance issued by Hongkong Sanghai Bank Corporation Ltd., Mumbai, which is only telegraphic transfer credit advice bearing reference No. RGT610813083. On perusal of the bank account of the assessee, we observe that on 10.11.2005, a sum of Rs.7.92 crores has been deposited. The assessee was unable to justify that the alleged gift came from his mother’s account and she was capable to advance such huge money as gift to the assessee so as to consider the deposit as gift.

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donor and it was not proved beyond doubt as to from where, the impugned amount of gift was remitted to the assessee. The AR of the assessee has not rebutted the objections raised by the Assessing Officer in this regard. The AR also objected that the impugned addition can neither be made u/s. 68 or section 69. The Assessing Officer observed that the amount of Rs.7.92 crores has been credited into the bank account maintained by the assessee. In general, the bank maintains ledger accounts of his customers. Section 2(12A) has defined the books or books of account as under :

(12A) "books or books of account" includes ledgers, day-books, cash books, account-books and other books, whether kept in the written form or as print-outs of data stored in a floppy, disc, tape or any other form of electro- magnetic data storage device; Even otherwise, wrong quoting of section does not vitiate the whole proceedings as held by Hon’ble Supreme Court in the case of P.K. Palanisamy v. N. Arumugham & Anr. Dated 23.07.2009, Shree Hari Chemicals Export Ltd. v. Union of India & Anr. Dated 16.12.2005 and T. Nagappa v. Y.R. Murlidhar dated 24.04.2008.

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assessee at any stage to justify the genuineness of the gift. Therefore, the ld. CIT(A) has rightly confirmed the addition made by the ld. Assessing Officer of the impugned amount as unexplained investment. Accordingly, the impugned order does not call for any interfere on this count.

Order pronounced in the open court on 13th September, 2018.

Sd/- Sd/-

(Amit Shukla) (L.P. Sahu) Judicial member Accountant Member

Dated: 13th September, 2018 *aks* Copy of order forwarded to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order Assistant Registrar Income Tax Appellate Tribunal Delhi Benches, New Delhi