IN THE INCOME TAX APPELLATE TRIBUNAL "D" BENCH, MUMBAI
BEFORE HON'BLE S/SHRI H.L. KARWA, PRESIDENT AND B.R.BASKARAN (AM)
.. , .. ,
./I.T.A. No.6254 & 6255/Mum/2012
( / Assessment Year :2005-06 & 2006-07)
Asstt. Commissioner of Income / Shri Ranjeetsingh Bindra,
Tax, CC 21, Vs. A-71, Cozy Home, 251,
Room No.403,4th Floor, Pali Hill,
Aayakar Bhavan, Bandra (W),
M K Road, Mumbai-400050
( /Appellant) .. ( / Respondent)
. / . / PAN/GIRNo. :AERPB2424A
/ Revenue by : Shri Manjunath Swamy
/Assessee by : None
/ Date of Hearing
/Date of Pronouncement : 19.11.2014
/ O R D E R
Per B R Baskaran, Accountant Member:
The appeals filed by the revenue is directed against the orders passed by
Ld CIT(A)-39, Mumbai and they relate to the assessment years 2005-06 and
2006-07. The Long term capital gain assessed as business income in both the
years, having been deleted by Ld CIT(A), the revenue is in appeal before us.
2. None appeared on behalf of the assessee and hence we proceed to
dispose of the appeal ex-parte, without the presence of the assessee.
3. We have heard Ld D.R and perused the record. The facts relating to the
issue are that the assessee had purchased 45000 shares of M/s Ramakrishna
Fincap Ltd on 25.7.2003 in an off market transaction. Earlier, the assessee had
sold shares of LIC Housing Finance and SBI on 25.6.2003 and earned short term
ITA Nos.6254 & 6255/Mum/2012
capital gain of Rs.1,12,430/- and the said proceeds were utilized to purchase the
shares of M/s Ramakrishna fincap Ltd. The assessee demated the shares on
2.9.2004. Subsequently, the assessee sold 12,000 shares in the year relevant to
asst. year 2005-06 and the balance quantity of shares were sold in the year
relevant to AY 2006-07. Thus, the assessee earned Long term capital gain of
Rs.15,42,630/- and Rs.60,24,551/- respectively in AY 2005-06 and 2006-07. The
assessee claimed the same as exempt in both the years under consideration.
The shares of M/s Ramakrishna Fincap Ltd had been designated as "Penny
stock" and its shares prices also went up at astronomically high level. Hence, the
AO disbelieved the share transactions and assessed the Long term capital gain
as business income of the assessee in both the years. The Ld CIT(A), however,
held that the gain arising on sale of shares of M/s Ramakrishna Fincap Ltd
should be assessed as Long term capital gain only and accordingly deleted the
addition made by the AO.
4. On a perusal of the order passed by Ld CIT(A), we notice that the
assessee has proved the sources for the purchase of shares of M/s Ramakrishna
Fincap Ltd and also furnished broker bill and Contract note in support of the
same. The brokers have also confirmed the fact of purchase. Since it was an off
market transaction, the purchases were not available with the Stock exchange.
Thereafter, the assessee has demated the shares in Sep, 2004 and started
selling the shares in installments from 4.11. 2004 to 25.4.2005. All the sale have
been carried through stock exchange. The Ld CIT(A) have also noticed that the
purchase of shares have been duly accounted for in the Balance sheet filed
along with the return of income pertaining to assessment year 2004-05 on
1.11.2004. The sale transactions have also been accounted for in the books.
The assessee has pointed out that the share price of the above said company
has gone up further after its sale by the assessee. Under these set of facts, the
Ld CIT(A) held that the assessing officer has merely disbelieved the evidences
furnished by the assessee only on surmises and suspicion. Accordingly he
allowed the appeal of the assessee in respect of this ground.
5. During the course of hearing before us, the Ld D.R could not produce any
material to contradict the findings given by Ld CIT(A). Even though the Ld D.R
ITA Nos.6254 & 6255/Mum/2012
submitted that the Ld CIT(A) has accepted additional evidences, we notice that
the first appellate authority has confronted the same with the AO by calling for a
remand report. Later, the Ld CIT(A) has decided the issue in both the years in
favour of the assessee by examining the documents filed by the assessee.
Under these set of facts, we do not find any infirmity in the view taken by Ld
CIT(A). Accordingly, we uphold his orders in both the years.
6. In the result, both the appeals furnished by the revenue are dismissed.
The above order was pronounced in the open court on 19th Nov, 2014.
19th Nov, 2014
(.. / H.L. KARWA) (.. ,/ B.R. BASKARAN)
/ PRESIDENT /Accountant Member
Mumbai: 19th Nov,2014.
. ../ SRL , Sr. PS
/Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent.
3. () / The CIT(A)- concerned
4. / CIT concerned
5. , , /
DR, ITAT, Mumbai concerned
6. / Guard file.
/ BY ORDER,
, /ITAT, Mumbai