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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: HON’BLE S/SHRI JOGINDER SINGH (JM), & RAJESH KUMAR,(AM)
per the Contract Act, therefore, the assessee is not concerned with any way of the broker. Nowhere the AO has alleged that the transaction by the assessee with these particular broker or share was bogus, merely because the investigation was done by SEBI against broker or his activity, assessee cannot be said to have entered into ingenuine transaction, insofar as assessee is not concerned with the activity of the broker and have no control over the same. We found that M/s Basant Periwal and Co. never stated any of the authority that transaction in M/s Ramkrishna Fincap Pvt. Ltd. on the floor of the stock exchange are ingenuine or mere accommodation entries. The CIT(A) after relying on the various decision of the coordinate bench, wherein on similar facts and circumstances, issue was decided in favour of the assessee, came to the conclusion that transaction entered by the assessee was genuine. Detailed finding recorded by CIT(A) at para 3 to 5 has not been controverted by the department by brining any positive material on record. Accordingly, we do not find any reason to interfere in the findings of CIT(A). Moreover, issue is also covered by the decision ofjurisdictional High Court in the case of Shyam R. Pawar (supra), wherein under similar facts and circumstances, transactions in shares were held to be genuine and addition made by AO was deleted. Respectfully following the same vis-à-vis findings recorded by CIT(A) which are as per material on record, we do not find any reason to interfere in the order of CIT(A). 9. In the result, both appeals of the revenue are dismissed.”
In the case of the assessee the purchase of shares were made through SEBI registered brokers though off market which were accepted by the AO in the AY 2003-04 including the source of purchase out of speculation gain of Rs. 1,49,916/- and out of cash Rs. 8,383/-. Similarly sale of shares were also made through SEBI registered brokers. All the transactions of purchase and sales of shares were evidenced and supported with bills and vouchers of the brokers and confirmations from the brokers, acknowledgements of payments and receiving the sale proceeds by account payee cheques. The ld CIT(A) or AO could not bring any evidence on records
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to prove or rebut the evidences on records except the some enquiries which could not prove anything. We also find that the case of the assessee is squarely covered by the ratio laid down in various the decisions(supra). Now coming to the decisions on which the revenue placed reliance we find that the same are distinguishable on facts. In the case of CIT Vs Durga Prasad (Supra) it has been held as under :
Now coming to the grounds that commended themselves to Mukharji J. (the present Chief Justice of the High Court of Calcutta), we are unable to find out how the learned judge was able to come to the conclusion that there was no proof or charge that the assessee had concealed any income of his. The orders of the Income-tax Officer, Appellate assistant Commissioner and the Tribunal proceeded on the basis that the assessee was attempting to conceal a portion of his income by putting forward the story that the income from the premises is the income of the Trust created by his wife. The proof of that charge depends on the correctness of the finding of those authorities. 16. In stating that there is no proof that the consideration for the conveyance passed from the assessee the learned judge, in our opinion, looked at the case from a wrong angle. There is no dispute that the consideration for the sale was in fact paid by the assessee. He says that he paid it on behalf of the Trust orally created by his wife. Therefore the question is whether he has satisfactorily proved that case. If he has failed to prove that case, as we think, it to be so and in the absence of any other alternative case pleaded by him, it follows as a matter of course that the consideration for the sale passed from him. Science has not yet invented any instrument to test the reliability of the evidence placed before a Court or Tribunal, Therefore the Courts and Tribunals have to judge the evidence before them by applying the test of human probabilities. Human minds may differ as to the reliability of a piece of evidence. But in that sphere the decision of the final fact finding authority is made conclusive by law. 17. The fact that the assessee kept a separate account in respect of the income and expenditure relating to the premises in question is of little evidentiary value if one takes into consideration the past history of the case. At any rate what value should be attached to that circumstance is for the final fact finding body.
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The circumstance that the assessee had at the very outset produced the sale deed and the trust deed before the Income-tax Officer is of no significance. Those documents formed the sheet anchor of the assessee's case. There was no particular virtue in the assessee's producing those documents before the income-tax Officer. 19. In our opinion no question of law arise from the order of the Tribunal and therefore the High Court was not justified in directing the Tribunal to state a case and we are further of opinion that the answer given by the High Court to the question referred to it is unsustainable. We accordingly discharge that answer and answer that question in the affirmative and in favour of the Department. The assessee shall pay the costs of the Department both in this Court as well as in the High Court-hearing fee one set.”
In the case Sumati Dayal Vs CIT(supra) the assessee has purchased the winning tickets in the horse races without actually participating in the race by introducing the accounted money to purchase the tickets and therefore distinguishable on facts. Similary CIT Vs Durga Prasad More(Supra) was also distinguishable on facts. In the case of Shamim M Bharwani(supra) the decisions of the apex court and jurisdiction high court in the case of CIT Vs Mukesh Ratilal Marolia(supra) were not considered.
From the facts of the assessee as discussed above the case of the assessee is squarely covered by ratio laid down in the various decisions of jurisdictional High Court, supreme court and coordinate benches. We therefore set aside the order of CIT(A) on this issue and direct the AO to delete the addition of Rs. 70,93,594/-.
The issue raised in the second ground of appeal is against the confirmation of addition of Rs. 1,58,299/- by the CIT(A) as made by the AO
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towards the cost of purchase of shares u/s 69C of the Act as unexplained expenditure.
The facts in brief are that the assessee purchased shares of two companies as discussed above in para nos.4 to 8 in the immediately preceding year FY 2002-03 relevant to AY 2003-04 and not during the year under consideration. The AO did not accept the sources of purchase of these shares and treated the same to have been purchased out of unaccounted income a few days before their sale and not during AY 2003-04 as shown and claimed by the assessee and accordingly made addition of Rs. 1,58,299/- u/s 69 C of the Act as unexplained expenditure.
The ld CIT(A) during appeal proceedings the CIT also upheld the order of AO on this issue by observing and holding as under:- “3.2 Decision: 3.2.1 I have carefully and dispassionately considered the facts and circumstances of the case, relevant assessment order, the written submissions made and the arguments made by the Ld. AR. The Assessing Officer has given detailed reasons for coming into conclusion that the cost of purchase of shares of Rs.78,465/-, Rs.49,770/-, Rs.1,58,299/-, Rs.1,83,870/- and Rs.70,552/- for A.Y. 2002-03, 2003- 04, 2004-05, 2005-06 and 2006-07 respectively were unexplained expenditure incurred in the A.Yrs. 2002-03 to 2006-07. These reasons have been discussed in para 8 of the relevant assessment order and inter-alia, included: (a) the alleged speculation income through which the said penny stocks shares were purchased, were not disclosed in the original returns of income nor in response to the returns filed u/s.153C, .. (b) regarding the speculation income which was stated to have been credited to the P&L Ac for A.Y. 2001-02, it was noticed by the Assessing Officer, that neither any business income was declared in that year nor any P&L account was prepared (c) equity shares were allegedly purchased in cash, however, neither the copies of share broker bills nor the cash receipts nor the source of such expenditures
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nor the explanation, if any, were offered by the appellant and hence in the opinion of Assessing Officer was found not satisfactory, (d) the copies of the demat statement wee not furnished by the appellant before the AO. The predated purchase bills, receips of shares on physical format, getting the shares in the assessee‟s name of penny stock companies were easily manageable against payment of commission as discussed in the modus operanedi of this case. The share brokers, who arranged the fictitious purchase of the shares did not attend in response to the summons issued to them, (g) the BSE has confirmed that the share brokers had not traded in the aforesaid share on those days. The alleged share transactions were not recorded in BSE and hence that were not genuine transactions. In view of the 'aforesaid reasons the Assessing Officer did not accept the explanation of the appellant. Ld. Assessing Officer came to a considered conclusion that these shares were purchased only few days before their s91e in the F.Yrs. corresponding to the relevant A.Yrs. concerned. Hon‟ble Court of Allahabad in the case of Smt.Reena Jain and others V.s CIT (2007) 210 CTR (All) 491 has held that where the alleged gifts were purchased by the appellant after paying commission, the addition were rightly made u/s.69C of the Act. Hon‟ble High Court of Madrass in the case of Grand Bazzar V/s ACIT (2007) 292 ITR 269 (Mad) has held that the where certain cash credit appearing in the assessee's books of accounts were found to be bogus credits. Then, the cost of purchase was rightly added u/s.69C of the Act, because the source of unaccounted purchase remained unexplained. Hon‟ble High Court has further held that bare reading of section 69C makes it clear that if the assessee incurred any expenditure, but offered no explanation about the source of such expenditure or part thereof, or the explanation so offered is not satisfactory, such expenditure may be deemed to be the income of the assessee. In the present appeal, the appellant had not explained the source of purchases and the addition under section 69C are, therefore, sustainable. Having regard to the facts and circumstances of the case and in law and also respectfully following the decisions of Hon'ble High Court of Allahabad and Hon'ble High Court of Madras, the addition made by the Assessing Officer of Rs.78,465/- for A.Y. 2002-03, Rs.49,770/- for A.Y.2003-04, Rs.1,58,299/- for A.Y. 2004-05, Rs.1,83,8701- for A.Y. 2005-06 and Rs.70,552/- for A.Y. 2006-07 u/s.69C is confirmed. Ground No.1 is accordingly dismissed.”
The ld AR vehemently argued that the order of CIT(A) was against the facts on records as the assessee has purchased these shares in AY 2003-04
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and not in the current year and therefore the no addition could be made u/s 69C of the Act in the current year when there was no iota evidence to suggest that the these shares were purchased in the current by ignoring the bills issued by the brokers and source of investments duly explained in AY 2003-04 and investments in shares were duly shown in the AY 2003-04 and sources also accepted by the AO while framing the assessment u/s 143(3) r w s 153A of the Act . Therefore the addition was bad in law and without jurisdiction. The ld AR without prejudice to the first arguments submitted that the investment in shares was not an expenditure but an investments therefore invoking provisions of section 69 C of the Act by the AO and its upholding by CIT(A) were bad in law as provisions of section 69C deals with the unexplained expenditure. Another without prejudice argument by the AR was that the sources of purchase of these shares were proved beyond any doubt by furnishing documentary evidences which were shown in the balance sheet as at 31.3.2003 to be out of speculation gain of Rs. 1,49,916/-and out of cash in hand of Rs.8,383/-.The ld AR further argued that the speculation gain was shown as short term capital gain in the return of income was accepted by the AO while framing assessment u/s 143(3) r.w.s. 153A of the Act for AY 2003-04. Lastly the ld AR prayed that in view these facts as discussed hereinabove the addition of Rs. 1,58,299/- deserved deletion. In the last without prejudice argument the ld AR submitted that since the CIT(A) has already added the entire sales consideration as unexplained cash credit ,
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the addition u/s 69C of the Act of Rs. 1,58,299/- on a/c purchase price of shares would result in double addition and prayed to be deleted.
The ld.DR submitted that the arguments were same as taken while arguing the ground no 1 and prayed that order of CIT(A) be confirmed.
After considering the contentions of the rival parties and relevant materials as placed before including impugned order, we find that the assessee has purchased the shares for a consideration of Rs.1,58,299/- in the AY 2003-04 out of speculation income of Rs.1,49,916/- and cash of Rs. 8,383/- and the investment was shown in the balance sheet as on 31.03.2003 and also the speculation income was shown by the assessee in her return of income as short term capital gain and assessed and accepted by the AO even while framing the assessment u/s 143(3) r.w.s. 153A of the Act for AY 2003-04. We also find the necessary evidences in the form of bills of SEBI registered brokers, shares duly transferred in name of the assessee, confirmation of brokers qua the share transactions and payments receipts etc were produced before the AO as well as CIT(A) though the shares purchases were off market. We have already deleted the addition on account of treating the entire sales consideration u/s 68 of the Act in para 8 of this order above. In our opinion the investments in the shares were made in the AY 2003-04 and accordingly order of CIT(A) confirming the addition of Rs. 1,58,299/- cannot be sustained. Accordingly we direct the AO to delete the addition.
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The issue raised in the ground no 3 is against the sustenance of additions of Rs. 3,54,580/- by CIT(A) being commission payments to brokers @ 5% of sales consideration from sales of shares of 70,93,594/- made by the AO. 35. According to the AO the investigation wing of the department has information that the operator used to charge 5% commission of the total sales proceeds for arranging the bills, shares certificate and letter from the company transferring the shares in the name of beneficiary. Accordingly the AO issued show cause notice to the assessee as to why the commission @ 5% should not be added to the income of the assessee of the total sales proceeds of Rs.70,93,594/- which was replied by the AR by submitting that no such commission was paid and the department found no evidence to this effect during the course of search. The ld AO rejected the contention of the assessee and added a sum of Rs.3,54,680/- on account of commission alleged paid by the assessee to the brokers u/s 69C of the Act as unexplained expenditure by holding that all the transactions were bogus and not genuine. 36. The FAA confirmed the action of the AO by holding and observing as under:- “5.3. DECISION: 5.3.1. I have carefully and dispassionately considered the facts and circumstances of the case. I have already confirmed such findings given by the Ld. Assessing Officer while deciding ground No.1 vide para 3.2 and round No.2 vide para No.4 above. Hon'ble High Court of Allahabad in the case Smt. Reena Jain & Ors. Vs. CIT (2007) 210 CTR (All) 491 has held that where the alleged gifts were purchased by the
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appellant after paying commission, the addition on account of commission was rightly made u/s.69C of the Act. Hon'ble High Court of Madras in the case of Grand Bazzar vs. ACIT (2007) 292 ITR 269 (Mad) has held that where certain cash credit appearing in the assessee's books of accounts were found to be bogus credits. Then, the cost of purchase was rightly added u/s 69C of the Act, because the source of unaccounted purchase remained unexplained. Hon'ble High Curt has further held that bare reading of section 69C makes it clear that if the assessee incurred any expenditure, but offered no explanation about the source of such expenditure or part thereof, or the explanation so offered is not satisfactory, such expenditure may be deemed to be the income of the assessee. The present appellant had not explained the source of commission and the addition under sec.69C are, therefore, sustainable. Having regard to the facts and circumstances of the case and in law and also respectfully following the decisions of Hon' ble High Court of Allahabad and Hon' ble High Court of Madras, the additions of Rs.79 ,237/ - for A.Y. 2002-03, Rs.4,03,042 / - for A.Y. 2003-04, Rs.354,680/- for A.Y. 2004-05, Rs.2,49,153/- for A.Y. 2005-06 and Rs.1,37,436/-for A.Y. 2006-07 made by the Assessing Officer u/s.69C are confirmed. Corresponding grounds are therefore dismissed “. 37. The ld AR argued that since the purchases and sales of shares were duly supported with bills, vouchers, registration of transfer of shares, payments receipts and other evidences in the form of confirmation of brokers, the CIT(A) has erred in law in upholding the additions of Rs. 3,54,680/- of sales proceeds towards the commission payments as all the transactions were genuine and were fully shown and disclosed in the books of accounts. The ld AR argued that not an iota of evidence was found by the AO or CIT(A) of commission payments. The ld counsel of the assessee relied on decision of the coordinate bench in the case of assessee‟s family member Smt Kamlaben Pandit V/s ACIT in ITA No 822/Mum/2009(AY-2003-04) dated 26.02.2010 and prayed that the addition be deleted following the decision on
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similar facts. On the other hand the ld DR relied on the authorities below and submitted for upholding the same.
After considering the arguments of the rival sides and taking into account the materials on records as placed before us as also the decision of the coordinate bench, we find that the assessee has proved the genuineness of the transactions of sales and purchase of shares by producing the supporting evidences and the revenue has not brought anything contrary on records except guessing the practice of charging commission @ 5% of sales proceeds in case of bogus transactions. We find merit that nothing incriminating was found by the search team qua the commission payments and therefore addition of Rs. 3,54,680/-can not be sustained which is just a guess and hypothesis by the AO . The case of the assessee is also supported by the decision of the coordinate bench in the case of Smt Kamlaben Pandit Vs ACIT (supra) in which an identical issue was decided in favour of the assessee. The operative part in para no 3 is extracted below:- “3. We have heard Mr.Beharilal, ld.counsel for the assessee and Mr. Lalchand, learned DR. As Car as the first addition is concerned, the addition is made u/s 69C on the ground that the rate of commission charged by the broker/operators is approximately 5%. No evidence was found during the course or search nor was any evidence gathered thereafter to prove that the assessee had incurred this expenditure of 5%. In the absence or evidence or having incurred expenditure outside the books of account, in our considered opinion, no addition could be made u/s 69C. The addition has been made on the basis of surmises and conjectures. 4. In the result, the ground no.1 is allowed”
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In our opinion the facts of the assessee‟s case are identical to the one as decided by the coordinate bench and we therefore respectfully following the same set aside the order of CIT(A) and direct the AO to delete the addition of Rs. 3,54,680/-accordingly.
In the result, the appeal of the assessee is allowed. ITA No 3031/Mum/2011 AY 2005-06
The issues raised in this appeal are same as decided by us in ITA No 3030/Mum/2011(AY-2004-05) with the difference that shares were transferred through D-mat A/C. Therefore our decision in ITA No. 3030/Mum/2011 would, mutatis mutandis, apply to this appeal as well. Accordingly the AO is directed to delete the additions made. 42. In the result, the appeal of the assessee is allowed. ITA No. 3032/Mum/2011 AY 2006-07 43. The issues raised in this appeal in grounds 1,2 and 4 are same as decided by us in ITA No 3030/Mum/2011(AY-2004-05). Therefore our decision in ITA No. 3030/Mum/2011 would, mutatis mutandis, apply to this appeal as well. Accordingly the AO is directed to delete the additions.
The issue raised in the ground no 3 is against the confirmation of disallowance of short term capital loss on sale of shares of Kailash Ficom Ltd. amounting to Rs. 6,54,961/- and not allowing the set off of the said short term capital loss of Rs. 6,54,961/- against the long term capital gain of Rs. 18,43,236/-.
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The brief facts are that the assessee purchased shares of Kailash Ficom Ltd through registered shares broker registered with BSE and the purchase consideration was discharged by two accounts cheques of Rs. 5,00,000/- dated 19.10.2005 drawn on Citi Bank and Rs. 3,34,924/- dated 2.12.2005 of HDFC. The assessee received refund of share money applied to Suzlon Energy Ltd on 14.10.2005 Rs. 19,39,530/- in Citi Bank and Rs. 11,64,720/- from Vasant Share Broker on 22.10.2005 in HDFC Bank and it was out of these funds the purchases of shares were made. The assessee produced before the AO the necessary bills and vouchers, bank statements which evidenced the payments for these shares to G.R. Pandya Share Broker. Similarly the sales proceeds were received in by cheque and deposited into the bank account the assessee and bills and vouchers were also produced before AO. The AO however not satisfied with the submissions of the assessee rejected the claim of assessee of short term loss of Rs.6,54,961/- by holding that bank statement did not state the payment having been made to G R Pandya Share Brokering Ltd though there a payment of Rs. 3,34,925/- ,however, same could not be verified that it was made to said brokering firm. Second payment of Rs.5,00,000/- could not be verified by the AO due to non submission of bank statement of Citi bank. The AO also noted that G R Pandya Brokering Ltd denied the transactions with the assessee as the business was closed in November, 2002.The assessee also objected before the AO the reply given by the G R
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Pandya Brokering Ltd by submitting that the payments were cleared in favour of the brokering firm from the banks and therefore the denial by the broker was wrong and misleading. All these transactions were off market and there was no question of reflection in the records of BSE. Finally the AO disallowed the STL of Rs. 6,54,961/- and added the same to the income of the assessee under the head “Capital Gain”.
The CIT(A) also dismissed the appeal of the assessee on this ground by upholding the order of AO by observing that the assessee could not substantiate the purchase and sales of shares by proving the documentary evidences, Bank statement of Citi bank and particularly the letter from G R Pandya Brokering Ltd of not having any transactions with the assessee of any purchases or sales shares .
We have considered the rival submissions and perused the materials on records. The ld AR vehemently argued before us that authorities below did not appreciate the facts and documentary evidences correctly despite the assessee furnishing all the evidences before the these authorities. The ld AR submitted before us that the payment to G R Pandya Brokering Ltd were made by account payee cheques by referring to the bank statements of Citi Bank and HDFC Bank attached in the paper book from page no. 113 to 126. We find from statement of Citibank at page 113 that a payment was cleared in favour of G R Pandya Share brokering ltd on 19.10.2005 of Rs. 5,00,000/-. Similarly, a payment was cleared on 2.12.2005 of Rs. 3,34,924/- by clearing
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but name is not clear from the statement. The AO has not made any enquiry from the bank and thus failed to verify the transaction despite assessee‟s furnishing the bank statement before him. He proceeded to disallow the STL of Rs. 6,54,961/- only on the basis of statement of share broker denying the transactions. Under these circumstances the addition as made by the AO and confirmed by the CIT(A) cannot be sustained. In our opinion the AO has not made any enquiries from the bank even and has not considered the bills vouchers, D-mat a/c confirming the purchase and sales of shares by the assessee furnished by the assessee, BSE records for sale of Shakun Construction Ltd ,purchase of Kailash Ficom Ltd. Under these circumstances we are inclined to set aside the order of CIT(A) on this issue and direct the AO to delete the disallowance. 48. Now we shall take up the appeals bearing ITA No.3033 to 3037/Mum/2011. Appeal No. Ground No. Decision 3033/Mum/2011 1 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 7 and 8 of this order. 2 and 3 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 10 and 11 of this order 3034/Mum/2011 1 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 10 and 11 of this order 2 Sec.54F which dealt with separately 3 & 4 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 10 and 11 of this order 3035/Mum/2011 1 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 7
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and 8 of this order. 2 Sec.54F dealt with separately 3 & 4 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 10 and 11 of this order 3036/Mum/2011 1 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 7 and 8 of this order 2 & 3 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 10 and 11 of this order 3037/Mum/2011 1 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 7 and 8 of this order 2 & 4 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 10 and 11 of this order 3 Allowed as per ITA No. 3032/Mum/2011 (AY- 2006-07) vide para 47 of this order.
Now we shall take up the appeals bearing ITA No.3038 to 3043/Mum/2011. Appeal No. Ground No. Decision 3038/Mum/2011 1 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 7 and 8 of this order. 2 and 3 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 10 and 11 of this order 3039/Mum/2011 1 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 10 and 11 of this order 2 Sec.54F which dealt with separately 3 & 4 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 10 and 11 of this order 3040/Mum/2011 1 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 7 and 8 of this order. 2 & 3 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 10
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and 11 of this order. 4 Sec.54F dealt with separately 3041/Mum/2011 1 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 7 and 8 of this order 2 & 3 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 10 and 11 of this order 3042/Mum/2011 1 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 7 and 8 of this order 2 & 4 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 10 and 11 of this order 3 Allowed as per ITA No. 3032/Mum/2011 (AY- 2006-07) vide para 47 of this order. 3043/Mum/2011 1 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 7 and 8 of this order 2 & 3 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 10 and 11 of this order
The issue raised in the ground no. 2 in ITA No 3034/M/2011, 3035/M/2011,3039/M/2011 and ground no 4 in ITA No 3040/M/2011 is common with difference as to figures only and is against not allowing exemption u/s 54F of the Act out of long term capita gain on sale of shares. The various reasons cited by the authorities below are that the assessee did not furnish the agreements with the builder qua the purchase of flat and also that the income by way of long term capital gain on sale of shares was found to be bogus. As we have decided the issue of long term capital gain on the sale of shares as genuine and deleted the additions under the head of other sources, we are of considered view that it would be fair and reasonable
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to restore the issue back to the file of AO to decide the matter afresh after affording a reasonable hearing to the assessee and the decide the issue of allowability of exemption u/s 54F of the Act accordingly as per facts and law. In view of our discussion hereinabove we set aside the order of CIT(A) on this issue and direct the AO to decide the issue afresh. 51. In sum and substance ITA No.3028 and 3029/Mum/2011 are allowed; ITA No.3030 & 3031/Mum/2011 are partly allowed; ITA No.3032/Mum/2011 is allowed; ITA No.3033, 3036 and 3037/Mum/2011 are allowed; ITA No.3034 and 3035/Mum/2011 are partly allowed for statistical purposes; ITA No.3038, 3041, 3042 and 3043/Mum/2011 are allowed and ITA No.3039 and 3040/Mum/2011 are partly allowed for statistical purposes The above order was pronounced in the open court on 17th Nov. 2016. घोषणध खुरे न्मधमधरम भें ददनधंकः 17th Nov. 2016 को की गई । Sd sd (JOGINDER SINGH) ( RAJESH KUMAR) Judicial Member Accountant Member भुंफई Mumbai: 17th Nov, 2016. व.नन.स./ SRL , Sr. PS आदेश की प्रतिलऱपप अग्रेपिि/Copy of the Order forwarded to : अऩीरधथी / The Appellant 1. प्रत्मथी / The Respondent. 2. आमकय आमुक्त(अऩीर) / The CIT(A)- concerned 3. आमकय आमुक्त / CIT concerned 4. ववबधगीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / 5. DR, ITAT, Mumbai concerned गधर्ा पधईर / Guard file. 6. आदेशधनुसधय/ BY ORDER, True copy सहधमक ऩंजीकधय (Asstt. Registrar) आमकय अऩीरीम अधधकयण, भुंफई /ITAT, Mumbai