, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI D.K. SRIVASTAVA, ACCOUNTANT MEMBER 1. ./ I.T.A. NO.4512/AHD/2007 2. ./ I.T.A.NO.4513/AHD/2007 ( / ASSESSMENT YEAR : 2004-05) 1.MEENADEVI N.GUPTA G-6, MOOLCHAND MARKET RING ROAD, SURAT PAN: ABZPG 2877 R 2.SUNITADEVI A. GUPTA G-6, MOOLCHAND MARKET RING ROAD, SURAT PAN: ABZPG 2876 Q / VS. 1. THE ASST.CIT CIRCLE-5, SURAT 2. THE ASST.CIT CIRCLE-5 SURAT ( / APPELLANTS ) .. ( / RESPONDENTS ) / APPELLANTS BY : SHRI R.B.SHAH, A.R. / RESPONDENT BY : SHRI RAJESH KUMAR, SR.D.R. / DATE OF HEARING : 22/04/2013 ! / DATE OF PRONOUNCEMENT : 10/5/13 '# / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THESE TWO APPEALS ARE HEREBY CONSOLIDATED BOTH EMA NATED FROM THE ORDERS OF CIT(A)-III, SURAT IDENTICALLY DATED 22/1 0/2007. WE SHALL TAKE UP THE LEAD CASE OF SMT.MEENADEVI N.GUPTA, WHEREIN THE GROUND NO.1 IS AS FOLLOWS:- [A] ITA NO.4512/AHD/2007 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WE LL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ITA NOS. 4512 & 4513/AHD/2007 MEENADEVI N.GUPTA & SUNITADEVI A.GUPTA VS. ACIT ASST.YEAR 2004-05 - 2 - HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN TREATING THE INCOME FROM CAPITAL GAIN ON SALE OF SH ARES AS INCOME FROM UNDISCLOSED SOURCES. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE IT ACT DATED 18/12/2006 WE RE THAT THE ASSESSEE HAD FILED THE INCOME-TAX RETURN DECLARING AN INCOME OF RS.15,16,700/- WHICH HAS INCLUDED AN INCOME SHOWN UNDER THE HEAD L ONG-TERM CAPITAL GAIN. THE WORKING OF THE CAPITAL GAIN WAS SUBMITTE D BEFORE THE AO AS UNDER:- SALES CONSIDERATION RECEIVED RS.15,93,625/- DATE 06.05.2003 LESS :- COST OF ACQUISITION DATE 08.03.2002.. RS. 1,19,705/- LONG TERM CAPITAL GAIN.. RS.14,73,919 /- 2.1. THE CAPITAL GAIN WAS OUT OF THE PURCHASE AND S ALES OF SHARES. THEREFORE, THE ASSESSEE HAS FURNISHED THE PURCHASE AND SALES BILLS OF THE SHARE TRANSACTION. IT WAS NOTED BY THE AO THAT THE ASSESSEE HAD PURCHASED 27500 SHARES OF SARANG CHEMICALS THROUGH A SHARE BROKER; VIZ. G.R.PANDYA SHARE BROKING LTD. VIDE A BILL DATED 08/ 03/2002. THE COST OF SHARE WAS STATED TO BE @ RS.4.35 PER SHARE. LAT ER ON, SHARES WERE SOLD THROUGH A SHARE BROKER NAMELY SANJAY R.SHAH AS BILL DATED 06/05/2003 @RS.57.95. TO VERIFY THE GENUINENESS OF THE TRAN SACTION, THE AO HAD ISSUED NOTICES U/S.133(6) OF THE ACT TO THE SAID B ROKERS. IN RESPONSE, ONE OF THE BROKER, NAMELY SHRI G.R.PANDYA VIDE A LETTER HAS DENIED THE TRANSACTION. HE HAS WRITTEN TO THE AO THAT NO TRAN SACTION WAS DONE NOR ANY BILL WAS ISSUED. LIKEWISE, THE OTHER BROKER SH RI SANJAY R.SHAH, ITA NOS. 4512 & 4513/AHD/2007 MEENADEVI N.GUPTA & SUNITADEVI A.GUPTA VS. ACIT ASST.YEAR 2004-05 - 3 - THROUGH WHOM THE SHARES WERE SOLD HAS ALSO INFORMED TO THE AO THAT THE BILLS WERE FALSE AND NO SUCH TRANSACTION WAS CARRIE D OUT BY HIM. THE AO HAS ALSO ENQUIRED FROM THE STOCK EXCHANGE AND NOTED THAT NO TRADING WAS RECORDED IN THE STOCK EXCHANGE. HE HAS CONCLUDED T HAT THE PURCHASE AND SALES BILLS FURNISHED BY THE ASSESSEE IN RESPECT OF THE SHARE TRANSACTIONS WAS NOT GENUINE. A SHOW-CAUSE NOTICE WAS ISSUED AN D IN COMPLIANCE ASSESSEE HAS NARRATED THE FACTS AS UNDER:- 2. ASSESSEE SHOWED LONG TERM CAPITAL GAIN OF RS. 14,73,919/- ON SALE OF 27,500 SHARES OF SARANG CHEMICALS LTD. ASSE SSEE PURCHASED THESE SHARES THROUGH THE BROKER G.R.PANDYA SHARE BR OKING LTD. THROUGH BILL NO.B/239/0012 DATED 8.3.2002 AT RS.4.3 5/- PER SHARE. ASSESSEE PURCHASED THESE SHARES THROUGH THIS BROKER , WHICH IS SUPPORTED BY CASH VOUCHER, BILL AND CONTRACT NOTE. THE MARKET PRICE PREVAILING ON THAT DAY WAS AT PAR WITH PRICE AT WHICH ASSESSEE PURCHASED SHARES. THE SHARE PURCHASED WER E DULY TRANSFERRED IN ASSESSEES NAME BY THE COMPANY AFTER OBTAINING THE PHYSICAL DELIVERY OF THE SHARES, HE SAID SHARES WER E DEMATERIALIZED. (COPY OF DEMAT ACCOUNT WITH ICICI B ANK IS ENCLOSED). THE BROKER NAMELY G.R. PANDYA SHARE BRO KING LTD. MIGHT HAVE DENIED THE TRANSACTION IN ORDER TO SAVE THEIR SKIN. THE SALES OF THE SHARES HAVE ALSO BEEN DONE THOUGH BROK ER NAMELY SANJAY R SHAH VIDE BILL NO.BW/03025/006 DATED 6.5.2 003 AT 57.95/- PER SHARE. THE SALE OF SHARES THROUGH THIS BROKER IS SUPPORTED BY BILL AND CONTRACT NOTE. ON SALE OF TH E SHARE ASSESSEE PARTED WITH THE DELIVERY OF THE SHARES FROM HERE DE MAT ACCOUNT. (COPY OF DEMAT ACCOUNT WITH ICICI BANK IS ENCLOSED) . THE BROKER NAMELY SANJAY R SHAH MIGHT HAVE DENIED THE TRANSACT ION IN ORDER TO SAVE HIS SKIN. AS THE SHARES HAVE BEEN PURCHASE D THROUGH OFF MARKET TRANSACTION, THE SAID TRANSACTIONS ARE NOT R EFLECTED IN THE STOCK EXCHANGE. 3. THE ASSESSEE HAD PURCHASED 27500 EQUITY SHARES OF SARANG CHEMICALS LTD. ON 08.03.2002 FOR RS.119705/7. THE SAID COMPANY ITA NOS. 4512 & 4513/AHD/2007 MEENADEVI N.GUPTA & SUNITADEVI A.GUPTA VS. ACIT ASST.YEAR 2004-05 - 4 - WAS LISTED WITH BOMBAY STOCK EXCHANGE AND AHMEDABAD STOCK EXCHANGE. THE EQUITY SHARES PURCHASED WERE HELD BY THE ASSESSEE FOR THE PERIOD OF APPROX. 14 MONTHS. THE SHARES WE RE PURCHASED OFF MARKET AT PREVAILING MARKET RATE. ACCORDINGLY SHARES WERE TRANSFERRED IN THE NAME OF ASSESSEE BY THE COMPANY/ COMPANYS REGISTER. THE INVESTMENT IN ABOVE SHARE BEING DULY REFLECTED IN BALANCE SHEET AS ON 31.3.2003. SUBSEQUENTLY AS REQ UIRED BY THE LAW IN FORCE THE SHARES WERE DEMATERIALIZED THROUGH ICICI BANK LTD. IN THE NAME OF ASSESSEE. FOR YOUR VERIFICATIO N AND RECORD PURPOSE WE ARE FURNISHING PHOTO STATE COPY IF RELEV ANT DEMAT ACCOUNT AND DELIVERY SLIPS. 4. IN VIEW TO LIQUIDATE MONEY ASSESSEE DECIDED TO OFFLOAD ITS HOLDING OF EQUITY SHARES OF SARANG CHEMICALS LTD. O N 6.5.2003 AT PREVAILING MARKET PRICE OF THE SHARES IN AHMEDABAD STOCK EXCHANGE. IN VIEW IF THIS, CONCLUSION ARRIVE BY YO U THAT THE TRANSACTIONS WERE NOT GENUINE IS NOT CORRECT. 5. ENTIRE TRANSACTION WERE EFFECTED THROUGH THE ST OCK BROKER ATTACHED WITH STOCK EXCHANGES, RELEVANT BILLS AND C ONTRACT NOTE ALREADY BEING FURNISHED TO YOUR GOOD SELF PROCEEDS WERE RECEIVED BY ACCOUNT PAYEE DRAFT FROM THE BROKER THROUGH WHOM WE HAVE SOLD THESE SHARES. 6. IN VIEW OF THE SUBMISSION MADE HERE IN BEFORE, THE TRANSACTIONS EFFECTED BY THE ASSESSEE WERE FULLY GENUINE AND ACC ORDINGLY GAINS WERE OFFERED FOR TAXATION. SIR, IT MAY BE POSSIBLE THAT THE SHARE BROKER OF THE ASSESSEE MIGHT HAVE TRANSACTED THE DE AL OFF MARKET I.E. DIRECTLY PARTY TO PARTY. 7. IN VIEW OF THE ABOVE, YOUR HONOUR IS REQUESTED NOT TO DRAW ANY ADVERSE INFERENCE IN REGARD TO TRANSACTION OF PURCH ASE AND SALE OF SHARES. 2.2. HOWEVER, THE AO WAS NOT CONVINCED AND SUMMARIZ ED THAT IN THE LIGHT OF THE INFORMATION GATHERED FROM THE SHARE B ROKERS, WHO HAVE DENIED OF ANY SUCH TRANSACTION WITH THE ASSESSEE, T HE PURCHASE AND SALES ITA NOS. 4512 & 4513/AHD/2007 MEENADEVI N.GUPTA & SUNITADEVI A.GUPTA VS. ACIT ASST.YEAR 2004-05 - 5 - OF THE SHARES WAS NOT GENUINE. HE HAS NOTED THAT T HE CONTRACT NOTE ISSUED BY THOSE BROKERS DID NOT MENTION THE ORDER NUMBER, TRADE NUMBER AND TIME OF THE TRADE. THE PURCHASE TRANSACTION WAS MA DE IN CASH, HOWEVER, AS PER THE SEBIS CIRCULAR DATED 18.11.1993 MEMBER- BROKERS WERE DIRECTED NOT TO ACCEPT CASH FOR PURCHASE OF SECURIT IES AND/OR GIVE CASH AGAINST SALES OF SECURITIES. THE DIRECTION WAS THA T THE PAYMENTS RECEIVED OR MADE SHOULD BE THROUGH CROSSED PAYEE ACCOUNT C HEQUES. THE AO WAS NOT EVEN CONVINCED THAT THE SHARES WERE DEMATER IALIZED IN DEMAT ACCOUNT WITH ICICI BANK. HE HAS HELD THAT IN A SIT UATION WHEN PURCHASES WERE NOT GENUINE, THEN THERE WAS NO QUESTION OF HOL DING OF DEMAT ACCOUNT. ACCORDING TO AO, THE ASSESSEE HAS ALSO NO T ESTABLISHED THAT THE TRANSACTIONS WERE INTIMATED TO THE STOCK EXCHANGE. THE AO HAS THUS CONCLUDED THAT THE SALE CONSIDERATION OF RS.15,93,6 25/- WAS THE INCOME FROM UNDISCLOSED SOURCES AND TAXED ACCORDINGLY IN T HE HANDS OF THE ASSESSEE. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 2.3. THE LD.CIT(A) HAS REPEATED THE REASONS GIVEN B Y THE AO FOR HOLDING THAT THE IMPUGNED LONG TERM CAPITAL GAIN WA S NOTHING BUT UNACCOUNTED INCOME OF THE ASSESSEE. THE LD.CIT(A) HAS ADDED THAT THE ASSESSEE HAD TRIED TO INTRODUCE HER UNACCOUNTED MON EY INTO THE LEGITIMATE INCOME BY PAYING LESSER TAX AS INCOME FROM LONG TER M CAPITAL GAIN. AT ONE PLACE, HE HAS ALSO REFERRED THAT THE ANOTHER LA DY OF THE SAME HOUSE SMT.SUNITADEVI A.GUPTA (THE OTHER APPELLANT BEFORE US) HAS SHOWN THE SAME TRANSACTIONS BUT THAT TRANSACTION WAS ALSO NOT ACCEPTED BY HIM. SINCE THE ACTION OF THE AO WAS CONFIRMED, HENCE THE ASSESSEE IS NOW FURTHER IN APPEAL. ITA NOS. 4512 & 4513/AHD/2007 MEENADEVI N.GUPTA & SUNITADEVI A.GUPTA VS. ACIT ASST.YEAR 2004-05 - 6 - 3. FROM THE SIDE OF THE ASSESSEE, LD.AR MR.R.B.SHAH A.R. APPEARED AND ARGUED THAT THE MAIN REASON OF DENIAL OF THE T RANSACTION BY THOSE BROKERS WAS THAT THEY HAVE NOT INFORMED THE TRANSAC TION TO THE SEBI. THEREFORE, TO SAFE THEIR OWN SKIN, THEY HAVE NOT AC CEPTED THE TRANSACTIONS., ALTHOUGH MADE THROUGH THEM. HE HAS DRAWN OUR ATTENTION ON CERTAIN DOCUMENTS WHICH WERE MADE PART OF THE PA PER-BOOK. AS PER A LETTER OF AHMEDABAD STOCK EXCHANGE LTD., THE PRICE QUOTATION OF TRANSACTION OF SARANG CHEMICALS LTD. WAS AS PER THE PRICE REPORTED IN THE STOCK EXCHANGE. THE PRICE AS PER STOCK EXCHANGE O F SARANG CHEMICALS LTD. AS ON 06/05/2003 WAS SHOWN AS OPEN RATE AT RS. 58 AND CLOSE RATE WAS SHOWN AT RS.40/-. THE ASSESSEE HAS ALSO GATHE RED THE INFORMATION IN RESPECT OF THE PRICE OF THE SHARE IN THE MONTH APRI L-2003. ACCORDING TO LD.AR, THE SHARE BROKER SHRI SANJAY R.SHAH HAS DULY CERTIFIED THE SALE OF SHARES OF SARANG CHEMICALS LTD. AT THE RATE OF RS.5 7.95 VIDE BILL DATED 6/5/2003 WHICH WAS ALSO SIGNED BY THE SAID BROKER. THE LD.AR HAS VEHEMENTLY PLACED RELIANCE ON A LETTER ISSUED BY SH ARE TRANSFER AGENT NAMELY SUBURBAN SYSTEM SERVICES DATED 10/03/2003. THE CERTIFICATE WAS ISSUED IN RESPECT OF UNIT SARANG CHEMICALS LTD. WH ICH READS AS UNDER:- UNIT : SARANG CHEMICALS LIMITED DEAR SIR(S)/MADAM YOUR RQUEST FOR TRNASFER OF THE BELOW MENTIONED SHARES HAS BEEN APPROVED. YOU WISH TO HOLD THESE SHARES IN THE DEMATERILISED FORM, YOU MAY SEND THIS LETTER ALONGWITH THE DEMATERIALISATION REQUEST FORM THROUGH YOUR DEPOSITORY PARTICIPANT WITH WHOM YOU HAVE OPENED A DEPOSITORY ACCOUNT. IF THE DEMATERIALISATION REQUEST IS NOT RECEIVED WITHIN 21 DAYS FORM THE DTE OF THIS LETTER. THE RELEVANT ITA NOS. 4512 & 4513/AHD/2007 MEENADEVI N.GUPTA & SUNITADEVI A.GUPTA VS. ACIT ASST.YEAR 2004-05 - 7 - CERTIFICATIE(S) SHALL BE DESPATCHED TO YOU. HOWEVE R, IF YOU DESIRE TO OBTAIN THE CERTIFICATES SUBSEQUENT LY YOU MAY INDICATE THE SAME TO US. 3.1. THE ASSESSEE WAS INFORMED THAT THE REQUEST FO R TRANSFER OF THOSE SHARES HAD BEEN APPROVED. THE SAID CONCERN HAS ALS O INFORMED THAT THE TRANSFER OF SHARES WERE RECORDED AND THE TRANSFER W AS AS PER THE REFERENCE OF A FOLIO NUMBER MENTIONING 27500 SHARES OF UNIT S ARANG CHEMICLAS LTD. THIS LETTER WAS DATED 15.12.2002. FURTHER, L D.AR HAS DRAWN OUR ATTENTION DEMAT ACCOUNT MAINTAINED WITH ICICI BANK. THROUGH THIS INFORMATION, IT IS EVIDENT THAT THE SALE WAS OFF M ARKET CELL. THE DEMAT ACCOUNT HAD REFLECTED THAT THE SAME WAS CREDITED ON 7/5/2003 AND SALE WAS RECORDED ON 9/5/2003. THE PURCHASE WAS MADE T HROUGH G.R.PANDYA SHARE BROKING LTD. AND HIS BILL DATED 8/3/2002 WITH BILL NUMBER HAS ALSO BEEN PLACED ON RECORD. LD.AR HAS ALSO MENTIONED T HAT SERVICE CHARGES HAS ALSO BEEN DEBITED TO THE ACCOUNT OF THE ASSESSE E. THE ASSESSEE HAS DULY PAID THE BROKERAGE WITH THOSE BROKERS. WHEN T HE SALES WERE MADE, THE ICICI BANK DULY MENTIONED THE CHEQUE NUMBERS, T HEREFORE THERE WAS NO OCCASION TO DENY THE CLAIM OF LONG TERM CAPITAL GAIN BY THE ASSESSEE. LD.AR HAS ALSO STRONGLY CONTESTED THAT THE PURCHASE OF SHARES WERE DULY REFLECTED IN THE PAST AS PER THE BALANCE-SHEET OF T HE IMMEDIATELY PRECEDING ASSESSMENT YEAR FURNISHED WITH THE REVENU E DEPARTMENT. LD.AR HAS ALSO PLACED RELIANCE ON A CBDT CIRCULAR N O.704 DATED 28/04/1995 AND RELEVANT PARA-2; FOR READY REFERENCE IS REPRODUCED BELOW:- ITA NOS. 4512 & 4513/AHD/2007 MEENADEVI N.GUPTA & SUNITADEVI A.GUPTA VS. ACIT ASST.YEAR 2004-05 - 8 - 2. WHEN THE SECURITIES ARE TRANSACTED THROUGH STO CK EXCHANGES, IT IS THE ESTABLISHED PROCEDURE THAT THE BROKERS FIRST ENTER INTO CONTRACTS FOR PURCHASE/SALE OF SECURITIES AND THERE AFTER, FOLLOW IT UP WITH DELIVERY OF SHARES, ACCOMPANIED BY TRANSFER DEEDS DULY SIGNED BY THE REGISTERED HOLDERS. THE SELLER IS EN TITLED TO RECEIVE THE CONSIDERATION AGREED TO AS ON THE DATE OF CONTR ACT. THE BOARD ARE OF THE OPINION THAT IT IS THE DATE OF BROKERS NOTE THAT SHOULD BE TREATED AS THE DATE OF TRANSFER IN CASES OF SALE TR ANSACTIONS OF SECURITIES PROVIDED SUCH TRANSACTIONS ARE FOLLOWED UP BY DELIVERY OF SHARES AND ALSO THE TRANSFER DEEDS. SIMILARLY, IN RESPECT OF THE PURCHASERS OF THE SECURITIES, THE HOLDING PERIOD SH ALL BE RECKONED FROM THE DATE OF THE BROKERS NOTE FOR PURCHASE ON BEHALF OF THE INVESTORS. IN CASE THE TRANSACTIONS TAKE PLACE DIR ECTLY BETWEEN THE PARTIES AND NOT THROUGH STOCK EXCHANGES THE DATE OF CONTRACT OF SALE AS DECLARED BY THE PARTIES SHALL BE TREATED AS THE DATE OF TRANSFER PROVIDED IT IS FOLLOWED UP BY ACTUAL DELIV ERY OF SHARES AND THE TRANSFER DEEDS. 3.2. RELIANCE HAS ALSO BEEN PLACED ON CERTAIN DECIS IONS; NAMLY 1. MANOJKUMAR SARAWAGI HUF ITA NOS.3233 & 3156/AHD/2010 AY 2007-08 (ITAT A BENCH AHMEDABAD ORDER DATED 16.3.2012) 2. KANTADEVI SARAWAGI ITA NOS.3232 & 3157/AHD/2010 AY 2007-08 (ITAT C BENCH AHMEDABAD ORDER DATED 14.10.2011) 3. SMT.VIMALRANI BIHARILAL BATRA ITA NO.7662/AHD/2009 FOR A.Y. 2005-06 (ITAT D BENCH ORDER DATED 16.9.2011) ITA NOS. 4512 & 4513/AHD/2007 MEENADEVI N.GUPTA & SUNITADEVI A.GUPTA VS. ACIT ASST.YEAR 2004-05 - 9 - 4. SMT.KANTA GOPAL ITA NO.1858/AHD/2005 FOR A.Y. (ITAT C BENCH AHMEDABAD ORDER DATED 23/09/2009) 5. SHRI PRAKASHCHAND S.SANDH ITA NO.3270/AHD/2009 FOR A.Y. 2005-06 (ITAT D BENCH AHMEDABAD ORDER DATED 24/02/2009) 6. SHRI SANJAY K.AGARWAL ITA NO.3142/AHD/2007 (ITAT C BENCH AHMEDABAD FOR AY 2003-04 ORDER DATED 12/02/2010 4. FROM THE SIDE OF THE REVENUE, LD.SR.DR MR.RA JESH KUMAR HAS VEHEMENTLY SUPPORTED THE VIEW TAKEN BY THE REVENUE DEPARTMENT. HE HAS PLEADED THAT THE ASSESSEE HAD FAILED TO ESTABLI SH THE GENUINENESS OF THE PURCHASER OF THE SHARES, THEREFORE THE ENTIRE C LAIM WAS BOGUS, HENCE THE AO HAD RIGHTLY TAXED THE SAME UNDER THE HEAD UN DISCLOSED INCOME. THE ASSESSEE WAS INFORMED A BOUT THE DENIAL BUT THE ASSESSEE HAS CHOSEN NOT TO CROSS-EXAMINE THOSE SHARE BROKERS. LD.DR HA S ALSO RAISED DOUBTS ABOUT THE CORRECTNESS OF THE DATES AS MENTIONED IN VARIOUS SERVICES. HE HAS ALSO PLEADED THAT THE CASE LAWS CITED BY THE AS SESSEE ARE DISTINGUISHABLE ON FACTS BASICALLY ON THE GROUND TH AT IN THOSE CASE LAWS THERE WAS NO DENIAL OF ANY TRANSACTION BY THE SHARE BROKERS. IN ASSESSEES ITA NOS. 4512 & 4513/AHD/2007 MEENADEVI N.GUPTA & SUNITADEVI A.GUPTA VS. ACIT ASST.YEAR 2004-05 - 10 - CASE, THERE WAS A SPECIFIC DENIAL BY BOTH THE SHARE BROKERS; THEREFORE THE ACTION OF THE AO SHOULD BE CONFIRMED. 5. WE HAVE HEARD BOTH THE SIDES AT SOME LENGTH. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW IN THE LIGHT OF THE COMPILATION FILED AND CASE LAWS CITED. ACCORDING TO US, THERE ARE CERTAIN COGENT EVIDENCES WHICH OTHERWISE CORROBORATE THE CLAIM OF THE ASSESSEE. ACCORDING TO US, EVEN IN THE ABSENCE OF THE CONFIRM ATION BY THOSE SHARE BROKERS ONE HAS TO EXAMINE THAT WHETHER THE SHARES HAVE BEEN PURCHASED AND AFTER RETAINING THEM FOR A CERTAIN PERIOD THOSE SHARES HAVE ACTUALLY BEEN SOLD BY THE ASSESSEE. IN THE PRESENT CASE, FA CTS HAVE REVEALED THAT THE SHARES OF SARANG CHEMICALS WERE DULY DEMATED AN D THEREUPON THE SALES WERE MADE THROUGH BANKING TRANSACTIONS. THE DEMAT ACCOUNT MAINTAINED WITH ICICI BANK HAS REVEALED THE SHARES NUMBERS, ETC. FROM THE SIDE OF THE ASSESSEE, IT IS VEHEMENTLY CONTESTE D THAT THERE WAS A REASON OF DENIAL OF TRANSACTION BY THOSE SHARE-BROKERS BEC AUSE THEY HAVE NOT INTIMATED THE TRANSACTION TO THE SEBI AND THAT ONE OF THEM HAS ALSO MADE THE PURCHASE TRANSACTION IN CASH WHICH WAS AGAINST THE SEBI GUIDELINES. APARTMENT FROM THESE EVIDENCES, OUR ATTENTION HAS A LSO BEEN DRAWN ON A CERTIFICATE ISSUED BY SHARE TRANSFER AGENT THAT T HE TRANSFER OF THOSE SHARES IN THE NAME OF THE ASSESSEE WAS DULY APPROVE D. THE ASSESSEE HAS EXPRESSED TO HOLD THOSE SHARES IN DEMATERIALIZED F ORM THEREFORE THE ASSESSEE WAS ASKED TO FILL UP THE DEMATERIALIZATIO N REQUEST FORM. THIS INFORMATION IS VERY VITAL AND PROVES THE FACT THAT THE ASSESSEE HAD IN FACT PURCHASED THE SHARES OF SARANG CHEMICALS LTD. IT I S ALSO DIFFICULT TO IGNORE AN ANOTHER FACTUAL POSITION THAT THE ASSESSE E IS IN THE PAST ITA NOS. 4512 & 4513/AHD/2007 MEENADEVI N.GUPTA & SUNITADEVI A.GUPTA VS. ACIT ASST.YEAR 2004-05 - 11 - ASSESSMENT YEAR HAD DULY DISCLOSED IN THE BALANCE-S HEET THE PURCHASE OF THOSE SHARES. ALTHOUGH, IT WAS AN OFF MARKET TRANS ACTION BUT IT WAS PROPERLY DOCUMENTED AND DULY SUPPORTED BY RELEVANT EVIDENCES. WE HAVE EXAMINED FEW CASE-LAWS, WHEREIN THE RESPECTED CO-ORDINATE BENCHES HAVE ALSO TAKEN A VIEW THAT ONCE THE PURCHA SE OF SHARES HAVE DULY BEEN RECORDED IN THE BALANCE-SHEET IN ONE FINA NCIAL YEAR AND LATER ON, THOSE VERY SHARES HAVE BEEN SOLD IN ANOTHER FINANCI AL YEAR, THEN THE PURCHASE OF SHARES SHOULD NOT HAVE BEEN DOUBTED, I F DULY RECOGNIZED BY THE SAID COMPANY AND LATER ON TRANSACTED THROUGH B ANKING CHANNEL. TO KEEP BREVITY IN MIND, WE ARE NOT DISCUSSING ALL TH OSE CASE-LAWS OR CITED DECISION OF THE TRIBUNAL, WHEREIN ALMOST ON IDENTIC AL FACTS WHEN THE PURCHASES WERE DOUBTED BY THE REVENUE DEPARTMENT, B UT CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE A CONSCIOUS VIEW HAVE BEEN TAKEN THAT ONCE THE SHARES WERE IN RESPECT OF A LISTED COMPANY AND TRANSACTION WAS THROUGH DEMAT ACCOUNT WHICH WAS AS PER THE RECOGNIZED STOCK EXCHANGE QUOTED PRICE, THEN THERE WAS NO REAS ON TO HOLD SUCH NATURE OF TRANSACTION AS NON-GENUINE. RESPECTFULLY FOLLOWING THESE DECISIONS AND OTHER CASE LAWS, WE HEREBY REVERSE TH E FACTUAL AS ALSO LEGAL FINDINGS OF THE AUTHORITIES BELOW AND DIRECT TO ASS ESS THE IMPUGNED TRANSACTION UNDER THE HEAD LONG TERM CAPITAL GAIN. 6. GROUND NO. READS AS UNDER:- 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A S WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN MAKING ADDITION OF RS.65,000 FOR ALLEGED LOW HOUSEHOLD EXP ENSES. ITA NOS. 4512 & 4513/AHD/2007 MEENADEVI N.GUPTA & SUNITADEVI A.GUPTA VS. ACIT ASST.YEAR 2004-05 - 12 - 6.1. IN RESPECT OF HOUSEHOLD EXPENDITURE, THE AO HA S HELD THAT THE FAMILY OF THE ASSESSEE CONSISTED SIX MEMBERS INCLU SIVE OF FOUR SCHOOL/COLLEGE GOING CHILDREN. THE ADDITION AS MAD E BY THE AO FOR LOW- HOUSEHOLD EXPENDITURE WAS CONFIRMED BY CIT(A). AFT ER CONSIDERING THE TOTALITY OF THE CIRCUMSTANCES OF THE CASE, WE FIND NO REASON TO INTERFERE WITH THE FINDINGS OF THE REVENUE AUTHORITIES, THERE FORE AFFIRM THE SAME. RESULTANTLY, THIS GROUND OF THE ASSESSEE IS DISMISS ED. 7. IN THE RESULT, APPEAL IS PARTLY ALLOWED. [B] ITA NO.4513/AHD/2007 8. GROUNDS READ AS UNDER:- 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WE LL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN TREATING THE INCOME FROM CAPITAL GAIN ON SALE OF SHARES AS I NCOME FROM UNDISCLOSED SOURCES. 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WE LL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN MAKING ADDITION OF RS.47,300/- FOR ALLEGED LOW HOUSEHOLD E XPENSES. 8.1. AT THE OUTSET, LD.AR HAS STATED THAT THE FACTS OF THE CASE ARE SIMILAR TO THE FACTS AS DISCUSSED HEREINABOVE. ON PERUSAL OF THE ORDERS OF THE AO AND CIT(A), IT IS EVIDENT THAT ALMOST IN AN IDENTIC AL MANNER, THE SHARES WERE PURCHASED OF SARANG CHEMICALS LTD. THROUGH TH OSE VERY SHARE- BROKERS. FURTHER, IN THIS CASE, AS WELL, THE ASSES SEE HAS MAINTAINED DEMAT ACCOUNT WITH ICICI BANK. ON SALE OF SHARES , ASSESSEE HAD PARTED WITH THE DELIVERY OF THE SHARES FROM THE SAI D DEMAT ACCOUNT. THE ASSESSEE HAD PURCHASED 27500 EQUITY SHARES OF SARAN G CHEMICALS LTD. ON ITA NOS. 4512 & 4513/AHD/2007 MEENADEVI N.GUPTA & SUNITADEVI A.GUPTA VS. ACIT ASST.YEAR 2004-05 - 13 - 08/03/2002 FOR A SUM OF RS.1,19,705/- AND THE SAME WAS DULY DISCLOSED AS PER THE BALANCE SHEET SHOWN ON 31.3.2003. THE T RANSACTION WAS AS PER THE PREVAILING MARKET RATE BECAUSE THE SAID COMPANY WAS LISTED WITH BOMBAY STOCK EXCHANGE AS WELL AS AHMEDABAD STOCK EX CHANGE. ON THESE VERY FACTS, A VIEW HAS ALREADY BEEN EXPRESSED BY US IN FAVOUR OF ACC, THEREFORE IN IDENTICAL MANNER, GROUND NO.1 GOE S IN ASSESSEES FAVOUR. HOWEVER, IN RESPECT OF GROUND NO.2, AFTER CONSIDERI NG THE FACTS OF THE CASE, WE ARE OF THE VIEW THAT NO INTERFERENCE IS RE QUIRED, HENCE DISMISS THIS GROUND. RESULTANTLY, THIS APPEAL OF THE ASSES SEE IS ALSO PARTLY ALLOWED. 9. IN THE RESULT, ITA NOS.4512 AND 4513/AHD/2007 BO TH ARE PARTLY ALLOWED. SD/- SD/- ( D.K. SRIVASTAVA ) ( MUK UL KR.SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEM BER AHMEDABAD; DATED 10 / 5 /2013 SIGNATURE OF THE NOMINATED MEMBERS SD/- SD/- (AKG) (MKS) $. ., .&. ./ T.C. NAIR, SR. PS !'#$ %$' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ' () * / CONCERNED CIT 4. * ( ) / THE CIT(A)-III, SURAT 5. -./ &&(), ()!, 01''' / DR, ITAT, AHMEDABAD 6. /23 4 / GUARD FILE. & ' / BY ORDER, - & //TRUE COPY// (/& )* ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD