Case Law Details
Nishantkantilal Patel Vs ITO (ITAT Surat)
We note that there is no dispute regarding date of purchase of shares. Price of the shares Rs.2/- instead of Rs.0.55/- per share, confirmed from the party. The shares which the assessee had acquired were later on demated and then the assessee sold the shares at stock exchange through registered stock broker after making payment of STT. Neither the Stock Exchange or SEBI has disputed the assessee’s transaction nor was any action against the assessee’s broker taken by BSE or SEBI. The assessee’s dealings in shares are supported by the contract notes issued by broker as well as demat account. Genuineness of contract notes or demat accounts have not been disputed even in the show cause notice by the assessing officer.
The Ld Counsel also stated that in the course of assessment proceedings, the Assessing officer made inquiry with M/s. Corporate Commodity Broker Private Ltd. from whom assessee purchased shares. He stated that he sold the shares at Rs.2/- not at Rs.0.55/-. This doesn’t help the revenue as Corporate Commodity Broker Private Ltd. has only confirmed the sale of the shares to the assessee. Assessee purchased the shares on 30.10.2012 relevant to A.Y. 2013-14. No adverse inference was drawn in this regard in the Assessment order u/s.143(3) r.w.s 147 on 27.12.2017, by the assessing officer in the case of assessee.
In order to prove the Sale of shares of Sun & Shine Worldwide Ltd., assessee filed the following documents before the assessing officer, viz: Ledger Account of Tradebulls Securities Pvt. Ltd, Contract Notes of Tradebulls Securities Pvt. Ltd and Bank Statement. In order to prove purchases of shares, assessee filed the following documents, viz: Contra confirmation of broker M/s. Corporate Commodity Broker Private Ltd, Share Certificate, Share Transfer Form, Debit Note and Cash Receipt. The payments were received through account payee cheque and transaction was done through recognized stock exchange. The inflow of shares is reflected by way of physical share certificate and demat account. The shares were transferred through demat account. There is no evidence that the cash was recycled back to the assessee. The assessing officer has failed to bring any cogent evidence on record to show that these documents and evidences filed by the assessee are false.
The assessee merely acted on the basis of such market information and happened to get phenomenal gain. It could have been otherwise as well. The rags to riches story in the stock market are galore. It has been submitted that the alleged, circumstantial evidence and material has led the Assessing Officer to believe that the real is not the apparent. In the absence of any link between the assessee and the alleged admissions of the directors and brokers, human probability is being used as a vague and convenient medium for the department’s conjectures. To draw an adverse inference without any admissible evidence on record, is bad in law. The Hon’ble Supreme Court in the case of Omar Salav Mohamed Sait reported in (1959) [37 ITR 151] (SC) had held that no addition can be made on the basis of surmises, suspicion and conjectures. In the case of CIT(Central), Kolkata vs. Daulat Ram Rawatmull reported in [87 ITR 349], the Hon’ble Supreme Court held that, the onus to prove that the apparent is not the real is on the party who claims it to be so. The burden of proving a transaction to be bogus has to be strictly discharged by adducing legal evidences, which would directly prove the fact of bogusness or establish circumstance unerringly and reasonably raising an interference to that effect. The Hon’ble Supreme Court in the case of Umacharan Shah & Bros. Vs. CIT [37 ITR 271] held that suspicion however strong, cannot take the place of evidence.
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