Smt Shantidevi Bimalchand Jain, Nagpur V. Income Tax Officer Ward -4(2), Nagpur

ITA 61/NAG/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2138 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 25-04-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 12-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Assessee Lawyers: C J THAKAR SHRI S C THAKAR
• Keywords: Unexplained cash credit; Bogus Share capital; Capital asset; Business income; Share purchase agreement
• Section: 68; 2

Judgement Text

1 ITA NO. 61/NAG/2013. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO. 61/NAG/201 3 . ASSESSMENT YEAR : 2006 - 07. SHRI SANJAY BIMALCHAND JAIN, THE INCOME - TAX OFFICER, L/H OF SMT. SHANTIDEVI VS. WARD - 4(2), NAGPUR. BIMALCHAND JAIN, NAGPUR. PAN AAXPJ0416E. APPELLANT. RESPONDENT. APPELLANT BY : SHRI C.J. THAKAR/ SHRI S.C. THAKAR. RESPONDENT BY : SHRI A.R., NINAWE. DATE OF HEARING : 05 - 07 - 2016 DATE OF PRONOUNCEMENT : 18 TH JULY, 2016 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) DATED 08 - 11 - 2012 AND PERTAINS TO ASSESSMENT YEAR 2006 - 07. THE GROUNDS OF APPEAL READ AS UNDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND MATERIAL ON RECORD LEARNED A.O. AND C.I.T.(A) ERRED IN HOLDING THAT THE ASSESSEE WAS A TRADER IN SHARES AND NOT N INVESTOR AND CONSEQUENTLY ERRED IN TAXING LONG TERM CAPITAL GAIN ON SALE OF SHARE AS BUSINESS INCOME. 2. THE FINDING OF LEARNED CIT(A) IN TREATING THE ISOLATED TRANSACTION OF PURCH ASE OF SHARES IN 2003 AND SALE THEREOF IN 2006 RESULTING IN LONG TERM CAPITAL GAIN OF RS.13,99,648/ - AS BUSINESS PROFIT IS NOT ONLY CONTRARY TO EVIDENCE AND MATERIAL ON RECORD BUT IS ALSO PERVERSE. 2. IN THIS CASE THE ASSESSEE IS AN INDIVIDUAL. THE AO OBSE RVED THAT SHE DERIVED LONG TERM CAPITAL GAIN OF RS.13,99,648/ - AND HAS CLAIMED EXEMPTION U/S 2 ITA NO. 61/NAG/2013. 10(38) ON SALE OF SHARES OF KHOOBSURAT LTD. THE AO SUMMARISED THE FACTS OF LONG TERM CAPITAL GAIN DERIVED BY THE ASSESSEE AS UNDER : (I) THE ASSESSEE IS A SENIOR CITIZEN LADY WHO HAD BEEN DERIVING INCOME FROM OTHER SOURCES MOSTLY INTEREST INCOME FROM PARTIES BOND ETC. (II) ON ADVICE OF HER INCOME TAX COUNSEL LATE SHRI HEMANT SURJAN, ADVOCATE, SHE PURCHASED SHARES OF TWO PENNY STOCK KOLKATA BASED COMPANIES 8000 SH ARES OF SYNCOM MARKETING PVT. LTD. (SMPL) @ RS. 5.50 PER SHARE ON 08 - 08 - 2003 AND 4000 SHARES OF SKYZOOM DISTRIBUTORS P. LTD. (SZDPL) @ RS.4/ - PER SHARE ON 05 - 08 - 2003. PAYMENTS WERE MADE IN CASH FOR ACQUISITION OF SHARES OF BOTH THE COMPANIES. (III) INTERE STINGLY, ADDRESS OF BOTH THE COMPANIES WAS THE SAME I.E. 8, GANESH CHANDRA AVENUE, CALCUTTA - 200 013. (IV) AUTHORIZED SIGNATORY OF BOTH THE COMPANIES WAS ALSO TH E SAME PERSON. (V) PURCHASE OF SHARES OF BOTH THE COMPANIES WAS DONE THROUGH GLOBLE STOCK AND SE CURITIES LTD., 8, GANESH CHANDRA AVENUE, CALCUTTA. HERE AGAIN, THE ADDRESS OF THE BROKER WAS ALSO THE SAME AS THAT OF THE ADDRESS OF THE TWO COMPANIES. (VI) BOTH THE COMPANIES INTIMATED THE ASSESSEE ON 07 - 04 - 2004 REGARDING TRANSFER OF SHARES AND MERGER OF THE TWO COMPANIES WITH ANOTHER COMPANY NAMELY KHOOBSURAT LTD., KOLKATA AND THAT AFTER THE MERGER, THE ASSESSEE RECEIVED THE SHARES OF THE NEW COMPANY IN THE RATIO OF 1 : 4 OF THE NUMBER OF SHARES OF PREVIOUS TWO COMPANIES HOLD BY THE ASSESSEE. (VII) ON 2 2 - 04 - 2004, THE NEW COMPANY KHOOBSURAT LIMITED INFORMED THE ASSESSEE FOR ISSUANCE OF SHARES IN LIEU OF EARLIER SHARES AND ISSUED SHARE CERTIFICATES OF 3000 SHARES (2000 SHARES IN LIEU OF SMPL AND 1000 SHARES IN LIEU OF SZDPL) OF KHOOBSURAT LTD. (VIII) THE ASSESSEE SOLD 2200 SHARES AT AN EXORBITANT RATE OF @ RS.486.55 PER SHARE ON 07 - 06 - 2005 AMOUNTING TO RS.10,70,410/ - AND 800 SHARES ON 20 - 06 - 2005 @ RS. 485.65 AMOUNTING TO RS.3,88,520/ - . THE SHARES WERE SOLD THROUGH ANOTHER BROKER NAMELY ASHISH STOCK BROKING PVT. LTD. 3 ITA NO. 61/NAG/2013. (IX) SALE PROCEEDS OF THE FIRST SALE TRANSACTION (07 - 06 - 2005) AND THE SECOND SALE TRANSACTION (20 - 06 - 2005) WERE CREDITED DIRECTLY BY THE ABOVE BROKER IN THE S.B. ACCOUNT NO. 10473 OF UNION BANK OF INDIA, GANDHIBAGH, NAGPUR OF THE ASSESSEE ON 15 - 06 - 2005 AND 07 - 07 - 2005 RESPECTIVELY. (X) IN THE WHOLE TRANSACTIONS THE ASSESSEE MADE LONG TERM CAPITAL GAIN OF RS.13,99,648/ - AND CLAIMED EXEMPTION FROM TAX U/S 10(38) OF THE INCOME TAX ACT. 3. AFTER FURTHER ELABORATION, EXAMINATION, INVESTIGATION AND QUER Y ENQUIRING THE AO HELD AS UNDER : 9. ON THE BASIS OF MATERIAL ON RECORD AND ENQUIRIES AND INVESTIGATION DONE IN THIS CASE, I AM NOT INCLINED TO ACCEPT THE CONTENTIONS OF THE ASSESSEE THAT INCOME ARISING FROM SHARES OF THE COMPANY KHOOBSURAT LIMITED SHOULD BE TREATED AS CAPITAL GAIN FOR THE FOLLOWING REASONS : (I) THE INITIAL PURCHASED SHARES WERE NON - TRADING SHARES AND THE ASSESSEE HAS INVESTED HER HARD EARNED MONEY IN THE SHARES OF THE COMPANY WHOSE ADDRESS AND ANY OTHER DETAILS OF THE COMPANY WERE NOT KNOWN TO HER AND IT WAS DONE SOLELY ON THE SUGGESTION OF ONE OF HER SONS FRIENDS SUGGESTION IN ANTICIPATION OF HUGE PROFITS. THIS WAS ALSO STATED BY THE ASSESSEES SON IN HIS STATEMENT THAT THE INTENTION AT THE TIME OF PURCHASE WAS TO EARN HUGE PROFIT. (II) THE ASSESSEE HAD MADE INVESTMENT IN TWO UN - KNOWN COMPANIES WHOSE DETAILS WERE NOT KNOWN TO THE ASSESSEE. CONSIDERING THE ABOVE, THE T R ANSACTION OF SALE AND PURCHASE OF TWO PENNY STOCK SHARES AND THEN SUBSEQUENT MERGER WITH ANOTHER COMPANY KHOOBSURAT LIMITE D DO E S NOT QUALIFY TO BE CALLED AS A CAPITAL INVESTMENT RATHER, THESE TRANSACTIONS ARE AN ADVENTURE IN THE NATURE OF TRADE. (III) THIS ALSO COME TO CONCLUDE THAT THE MOTIVE OF THE ASSESSEES INVESTMENT IN THE TWO PENNY STOCK COMPANIES WAS NOT TO DERIVE INCOME BY WAY DIVIDEND ETC. RATHER, TO EARN PROFIT. (IV) BOTH THE BROKERS, THE ONE THROUGH WHOM THE SHARES WERE PURCHASED AND THE OTHER THROUGH WHOM IT WERE SOLD WERE LOCATED AT CALCUTTA AND THE ASSESSEE HAD ABSOLUTELY NOT ANY KNOWLEDGE WHAT WAS GOING ON IN THE WHOLE T RANSACTION EXCEPT PAYING RS.65,000/ - IN CASH TO HER LEGAL ADVISOR. ALSO THE CASH PURCHASES ARE NOT TO BE RELIED UPON. (V) THE COMPANY IN QUESTION WHOSE SHARES WEE SOLD WAS NOT HAVING HEALTHY FINANCIAL POSITION. AND DESPITE NOT BEING A DIVIDEND PAYING 4 ITA NO. 61/NAG/2013. COMPANY AND SUFFERING HUGE LOSSES ITS SHARES WERE QUOTED AT AROUND RS.500/ - PER SHARE. (VI) THE BROKER COMPANY THROUGH WHICH THE SHARES WERE SOLD DID NOT RESPOND TO MY LETTER AND NAME AND ADDRESS, BANK ACCOUNT OF THE PERSON WHO HAD PURCHASED THE SHARES SOLD BY THE ASSE SSEE WAS NOT FURNISHED AND FURTHER VERIFICATION AND INVESTIGATION COULD NOT BE MADE. 10. U/S. 2(13) OF THE INCOME TAX ACT THE WORD BUSINESS IS DEFINED AND IT INCLUDE ANY TRADE. COMMERCE OR MAINTENANCE O ANY ADVENTURE OR CONCERN IN THE NATURE OF TRADE, CO MMERCE OR MANUFACTURE. IN THE INSTANT CASE THE TRANSACTION OF PURCHASE OF TWO PENNY STOCK SHARES FOR RS.60,000/ - AND THEN MERGER WITH A NEW COMPANY AND ITS SUBSEQUENT SALE FOR RS.11,58,930/ - FALLS WITHIN THE AMBIT OF ADVENTURE IN THE NATURE OF TRADE. IN VI EW OF THE ABOVE, THE PROFIT OF RS.13,98,930/ - (RS.14,58,930 RS.60,000) IS BROUGHT TO TAX UNDER THE HEAD BUSINESS INCOME. 4. AGAINST THE ABOVE ORDER, THE ASSESSEE APPEALED BEFORE THE LEARNED CIT(APPEALS). THE LEARNED CIT(APPEALS) AFFIRMED THE AOS ACTION HOLDING AS UNDER : 4.9 AS REGARDS THE INTENTION OF THE ASSESSEE, IT HAS BEEN HELD BY VARIOUS HON'BLE COURTS THAT THE INTENTION OF THE ASSESSEE AT THE TIME OF PURCHASE OF ASSET IS THE MOST IMPORTANT CRITERIA TO DECIDE WHETHER THE SAME WERE PURCHASES AS TRADING ASSETS OR WERE BOUGHT AS AN INVESTMENT. ONLY BECAUSE THE SHARES HAVE BEEN DISCLOSED IN THE BALANCE SHEET AS AN INVESTMENT WOULD NOT DETERMINE OR PROVE . . THAT THE SHARES WERE PURCHASED AS A CAPITAL ASSET, SIN CE IT IS WELL SETTLED LAW THAT ENTRIES IN THE BOOKS OF ACCOUNTS ARE NOT DETERMINATIVE OF THE TRUE NATURE OF THE TRANSACTIONS. FURTHER, - C ASSESSEE'S CONTENTION, THAT HE HAS TAKEN DELIVERY OF SHARES A ND, HENCE, THE PROFITS SHOULD BE ASSESSED AS CAPITAL G AINS CANNOT BE ACCEPTED SINCE THIS CANNOT BE, AND IS NOT THE CRITERIA FOR DETERMINING THE NATURE OF INCOME. TO DETERMINE THE NATURE OF THE TRANSACTIONS OR WHETHER THE ASSESSEE HAS ACTED AS A TRADER OR INVESTOR, WHAT WILL HAVE TO BE EXAMINED IS AS TO HOW HE HAS DEALT OVERALL WITH HIS ASSETS AFTER THE PURCHASES AND HOW HE HAS ACQUIRED THE SAID ASSETS. A TRADER BUYS FOR THE PURPOSE OF RESELLING AT A PROFIT. HE DOES NOT WAIT FOR CAPITAL APPRECIAT I ON. HE TENDS TO SELL THE SHARES , IMMEDIATELY AFTER THE PURC H ASES, EVEN AT A LOSS, IF THE FACTORS SO DEMAND, SO THAT HE CAN UTILIZE HIS CAPITAL AND ROTATE IT IN THE . BUSINESS. T O PURCHASE S HARES AND THEN TO WAIT FOR APPRECIATION IN THEIR VALUE IN THE LON G TERM IS THE CLASSIC EXAMPLE OF AN INVESTOR. IN TRISHUL INVESTMENT LTD., REPORTED IN 305 ITR 434 (MAD), THE HON'BLE MADRAS HIGH COURT HAS - HELD THAT THE REST TO DECIDE WHETHER AN ACTIVITY WAS IN THE NATURE OF INVESTMENT OR AN ADVENTURE IN THE NATURE OF TRADE HAS A VERY THIN LINE OF DEM ARCATION. IT HELD THAT 'EVEN A SINGLE INSTANCE OF TRANSACTION CAN BE REGARDED AS BUSINESS 5 ITA NO. 61/NAG/2013. AND EVEN MULTIPLE TRANSACTIONS SOMETIME ARE DEEMED AS INVESTMENTS. SO, THE CRITERIA, FOR DECIDING WHETHER IT IS INVESTMENT OR BUSINESS IS THAT THE INTENTION OF TH E ASSESSEE, VIZ. WHETHER ASSESSEE'S REAL INTENTION IS TO INVEST OR THE INTENTION WAS IN THE NATURE OF TRADE.' 4.10 AN EXAMINATION OF THE DETAILS OF TRANSACTION FILED BY THE ASSESSEE IN RESPECT OF THE SHARES ON WHICH HE HAS CLAIMED CAPITAL GAINS REVEALS THAT THE OVERALL IMPRESSION THAT CAN BE GATHERED IS THAT THE ASSESSEE HAS DEALT WITH THE SHARES AS A TRADER AND NOT AS AN INVESTOR. 4.12 THE ASSESSEE'S RELIANCE ON A LARGE NUMBER OF JUDICIAL DECISIONS WOULD NOT COME TO HIS RESCUE SINCE THES E WERE RENDERED IN LIGHT OF THE FACTS PRESENT IN THESE INDIVIDUAL CASES AND IT IS SETTLED POSITION OF LAW THAT WHETHER A PERSON IS A TRADER OR AN INVESTOR IS A MIXED QUESTION OF FACTS AND LAW. HENCE, IT IS THE FACTS PRESENT IN THE CASE OF THE ASSESSEE WHICH WOULD BE RELEVANT FOR DECIDING WHETHER HE IS TO BE TREATED AS AN INVESTOR OR A TRADER IN RESPECT OF THE ACTIVITY IN QUESTION. IN THE CASE OF MAHENDRA C. SHAH ITA NO. 6239/MUM/2008 AND 4932/MUMJ2009 ALSO, IT HAS BEEN HELD BY THE HON'BLE MUMBAI TRI BUNAL THAT WHETHER THE SURPLUS ON THE SALE OF SHARES IS TO BE ASSESSED AS CAPITAL GAINS (SHORT TERM OR LOG TERM) AS CLAIMED BY THE ASSESSEE OR AS BUSINESS INCOME AS CLAIMED BY THE ASSESSING OFFICER IS A QUESTION OF FACT TO BE DECIDED ACCORDING TO THE C UMULATIVE EFFECT OF SEVERAL FACTS AND CIRCUMSTANCES OF THE CASE. 4.13 THE CONTENTION OF THE ASSESSEE THAT THE SHARES WERE BEING REFLECTED IN THE BALANCE SHEET AS INVESTMENTS WOULD NOT BE DETERMINATIVE OF THE TRUE NATURE OF THE TRANSACTIONS WHEN THE INTENTION OF THE ASSESSEE IN DEALING WITH THE SHARES ITSELF SHOWS THAT THE SHARES HAVE BEEN DEALT WITH AS TRADING ASSETS AND NOT AS INVESTMENTS. 4.16 IN VIEW OF THE AFORESAID REASONS, I AM OF THE OPINION THAT THE ASSESSEE WAS A TRADER AND NO T AN INVESTOR IN THE SHARES IN ; - ~' - ' RESPECT OF WHICH HE HAS CLAIMED SHORT TERM CAPITAL GAINS AND WHICH IS THE SUBJECT MATTER OF THE APPEAL. HENCE, THE PROFITS ARE TO BE ASSESSED UNDER THE HEAD 'PROFITS & GAINS OF BUSINESS & PROFESSION' AND NOT UNDER TH E HEAD 'CAPITAL GAINS'. THEREFORE, THE ACTION OF THE A.O. OF TREATING THE PROFIT OF RS.43,96,794/ - AS BUSINESS INCOME IS UPHELD. 5. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 6. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RE CORDS. THE FACTS OF THE CASE CLEARLY INDICATE THAT THE ASSESSEE HAS INDULGED IN PENNY STOCK TRANSACTION. 6 ITA NO. 61/NAG/2013. THE ASSESSEE IS A SENIOR CITIZEN. ON PURPORTED ADVICE OF AN INCOME - TAX CONSULTANT, SHE PURCHASED SHARES OF TWO PENNY STOCK CALCUTTA BASED COMPANIES A T RS.5.50 PER SHARE AND RS.4/ - PER SHARE RESPECTIVELY IN 2003 . BOTH THE COMPANIES HAD NO STANDING AND THE AO FOUND THEIR EXISTENCE OF DUBIOUS CHARACTERS. BOTH PURPORTEDLY MERGED WITH OTHER COMPANY, NAMELY, KHOOBSURAT LTD. AND THE ASSESSEE RECEIVED SHARES IN KHOOBSURAT LTD. IN LIEU OF HER SHARES IN EARLIER COMPANIES. THE ASSESSEE WAS ABLE TO SELL THE SHARES AT THE PRICE OF RS.486.55 AND R.485.65 RESPECTIVELY IN 2005 . THE PURCHASE BY THE ASSESSEE OF SHARES OF TWO UNKNOWN COMPANIES WHOSE DETAILS WERE NOT AT ALL KNOWN BY THE ASSESSEE CAN BY NO STRETCH OF IMAGINATION BE SAID TO BE AN INVESTMENT TRANSACTION. THE COMPAN Y WHOSE SHARES ROSE FROM RS.5/ - TO RS.485/ - WITHIN EXTREMELY SHORT SPAN HAS NO WORTHWHILE POSITION AND BALANCE SHEET AND IS NOT AT ALL DIVIDEND PA YING COMPANY. THE BROKER COMPANY THROUGH WHICH THE SHARES WERE SOLD DID NOT RESPOND TO AOS LETTER REGARDING THE NAMES AND ADDRESS AND BANK ACCOUNT OF THE PERSON W HO PURCHASED THE SHARES SOLD BY THE ASSESSEE. IN THESE CIRCUMSTANCES IT IS A CLEAR CASE WHERE THE ASSESSEE HAD INDULGED IN BOGUS AND DUBIOUS SHARE TRANSACTION MEANT TO ACCOUNT FOR THE BOGUS AND UNDISCLOSED INCOME IN THE GARB OF LONG TERM CAPITAL GAIN. 7. IN THIS REGARD I MAY GAINFULLY REFER TO THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF MAJOR METALS LTD. VS. UNION OF INDIA AND OTHE R S IN WRIT PETITION NO. 397 OF 2011 VIDE ORDER DATED 22 ND FEBRUARY, 2012. THE HONBLE JURISDICTIONAL HIGH COURT IN THIS CASE HAS HELD THAT A COMPANY CANNOT COMM A ND DISPROPORTIONATE AND HUGE SHARE PREMIUM AND SUCH RECEIPT OF BOGUS SHARE APPLICATION MONEY EVEN THOUGH THROUGH BANKING CHANNEL CAN BE HELD TO BE ASSESSEES UNDISCLOSED INCOME RECEIVED IN THE GARB OF UNJUSTIFIED SHARE APPLICATION MONEY. IN THE PRESENT CAS E I FIND THAT THERE IS NO JUSTIFICATION WHATSOEVER THAT THE SHARES OF AN UNKNOWN COMPANY OF RS.5/ - CAN BE SOLD WITHIN TWO YEARS TIME AT RS.485/ - WITHOUT THERE BEING ANY REASON ON 7 ITA NO. 61/NAG/2013. RECORD. THIS UNEXPLAINED SPURT IN THE VALUE OF UNKNOWN COMPANY SHARES IS BEY OND PREPONDERANCE OF PROBABILITY. I T HAS BEEN HELD BY HONBLE APEX COURT IN THE CASE OF DUR GA PRASAD MOR AND SUMATI DAYAL THAT THE TEST OF HUMAN PROBABILITIES HAVE ALSO TO BE APPLIED BY THE AUTHORITIES BELOW . IN THE CASE OF SUMATI DAYAL 214 ITR 801, IT WA S HELD THAT DURING THE YEAR 1970 - 71 (PERTAINING TO THE ASSESSMENT YEAR 1971 - 72) BETWEEN APRIL 6, 1970, AND MARCH 20, 1971, THE APPELLANT CLAIMS TO HAVE WON IN HORSE RACE A TOTAL AMOUNT OF RS.3,11,831/ - ON 13 OCCASIONS OUT OF WHICH TEN WINNINGS WERE FROM JACKPOTS AND THREE WERE FROM TREBLE EVENTS. SIMILARLY IN THE YEAR 1971 - 72, THE APPELLANT WON RACES ON TWO OCCASIONS AND BOTH TIMES THE WINNING WERE FROM A JACKPOT. THESE RECEIPTS WERE TESTED ON THE TOUCH STONE OF HUMAN PROBABILITY A ND IT WAS FOUND THAT APP ARENT WAS NOT REAL. THAT IT WAS CONTRARY TO STATIST IC AL THEORY AND EXPERIENCE OF THE FREQUENCIES AND PROBABILITIES. THE EXCEPTIONAL LUCK ENJOYED BY THE ASSESSEE WAS HELD TO BE BEYOND PREPONDERANCE OF PROBABILITY. HENCE THE HONBLE APEX COURT HAS AFFIRMED THE VIEW THAT IT WOULD NOT BE UNREASONABLE TO INFER THAT THE APPELLANT HAD NOT REALLY PARTICIPATED IN ANY OF THE RACES EXCEPT TO THE EXTENT OF PURCHASING THE WINNING TICKETS AFTER THE EVENTS PRESUMABLY WITH UNACCOUNTED FUNDS. 8. WHEN THE PRESENT CA SE IS EXAMINED ON THE TOUCH STONE OF ABOVE CASE LAW, IT IS CLEAR THAT T HESE TRANSACTIONS OF THE ASSESSEE CAN BY NO STRETCH OF IMAGINATION BE CONSIDERED AS INVESTMENT TRANSACTIONS. THEY ARE ONLY MAKE BELIEVE TRANSACTION. HENCE I DO NOT FIND ANY INFIRMIT Y IN THE REVENUE TAXING THE RECEIPT IN THIS REGARD. 9 . THE ENTIRE AMOUNT OF TH E SO CALLED RECEIPT OF SHARE SALES COULD WELL ALSO BE TREATED AS UNEXPLAINED CREDIT U/S 68 OF THE I.T. ACT AS IT HAS ALL THE INGREDIEN TS OF ATTRACTING THE RIGOURS OF THE SAID SECTION. SECTION 68 OF THE I.T. ACT PROVIDES THAT WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT 8 ITA NO. 61/NAG/2013. THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFER ED BY HIM IS NOT IN THE OPINION OF THE AO SATISFACTORY, TH E SUM SO CREDITED MAY BE CHARGED TO INCOME - TAX AS INCOME OF THE ASSESSEE OF THAT YEAR. IN THE PRESENT CASE THE ASSESSEES EXPLANATION THAT THE SAID RECEIPT IS ON ACCOUNT OF INVESTMENT IN SHARES WHE REBY SHARE OF RS.5/ - OF UNKNOWN COMPANY HAS JU M PED TO RS.485/ - IN NO TIME HAS BEEN TOTALLY REJECTED B Y THE AUTHORITIES BELOW. THE ASSESSEE HAS NOT AT ALL BEEN ABLE TO ADDUCE COGENT EVIDENCES IN THIS REGARD. THERE IS NO ECONOMIC OR FINANCIAL JUSTIFICATION FOR THE SALE PRICE OF THESE SHARES. THE SO CALLED PURCHASE R OF THESE SHARES HAS NOT BEEN IDENTIFIED DESPITE EFFORTS OF THE AO . THE BROKER COMPANY THROUGH WHICH SHARES WERE SOLD DID NOT RESPOND TO QUERIES IN THIS REGARD . HENCE THE FANTASTIC SALE PRICE REALISATION IS NOT AT ALL HUMAN LY PROBAB LY , AS THERE IS NO ECONOMIC OR FINANCIAL BASIS, THAT A SHARE OF LITTLE KNOWN COMPANY WOULD JU MP FROM RS. 5 / - TO 485/ - , IN THESE CIRCUMSTANCES, I DO NOT FIND ANY INFIRMITY IN THE ORDER S OF THE AUTHORITIES BELOW. ACCORDINGLY I AFFIRM THE SAME AND DECIDE THE ISSUE AGAINST THE ASSESSEE. 10 . IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF JULY,2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 18 TH JULY, 2016. FIT FOR PUBLICATION IN THE INCOME TAX TRIBUNAL DECISIONS. ACCOUNTANT MEMBER. 9 ITA NO. 61/NAG/2013. COPY FORWARDED TO : 1. SHRI SANJAY BIMALCHAND JAIN, 276, EAST WARDHAMAN NAGAR, NEAR RAILWAY CROSSING, NAGPUR. 2. I.T.O. WARD - 4 (2) , NAGPUR. 3. C.I.T. - II, NAGPUR. 4. CIT(APPEALS), - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.