Pushpalata Omprakash Bhandari,, Pune vs Assessee

Mrs Pushpalata Omprakash Bhandari 373, Somwar Peth, Bhandari Apartments, Pune - 411002 .... Appellant

PAN: AHQPB6388K

Vs.

The Dy. Commissioner of Income Tax Circle -2, Pune .... Respondent

ITA No.372/PN/2014 Assessment Year: 2005-06

Mrs Pushpalata Omprakash Bhandari 373, Somwar Peth, Bhandari Apartments, Pune - 411002 .... Appellant

PAN: AHQPB6388K

Vs.

The Dy. Commissioner of Income Tax Circle -2, Pune .... Respondent

Appellant by : S/Shri Sunil Ganoo & K.N. Bora Respondent by : Shri Rajesh Damor

Date of hearing : 23-12-2014 Date of pronouncement : 18-03-2015

ORDER

PER SUSHMA CHOWLA, JM:

Both the appeals filed by the assessee are against separate orders of

CIT(A)-II, Pune dated 11.05.2012 and 19.07.2010 relating to assessment year

2005-06 passed under section 143(3) r.w.s. 147 of the Income-tax Act, 1961

and penalty levied under section 271(1)(c) of the Income-tax Act, 1961. 2 ITA No.2008/PN/2012 ITA No.372/PN/2014

Mrs Pushpalata Omprakash Bhandari

2. Both the appeals relating to the same assessee were heard together

and are being disposed of by this consolidated order for the sake of

convenience.

3. The assessee in ITA No.2008/PN/2012 has raised the following

grounds of appeal:-

1. In the facts and circumstances of the case and in law, the learned C.I.T.[A] has erred in confirming the penalty levied by the learned Assessing Officer u/s 271 [1] [c] of the I.T. Act 1961. The said penalty levied being arbitrary, perverse and based on no evidence and being legally unsustainable the same may please be deleted.

2. In the facts and circumstances of the case and in law, it may please be held that the appellant never concealed her income nor filed inaccurate particulars of her income as alleged by the learned Assessing Officer as well as the learned C.I.T.[A] and consequently the impugned penalty be deleted.

3. The appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal.

4. The assessee in ITA No.372/PN/2014 has raised the following grounds

of appeal:-

1. In the facts and circumstances of the case and in law the learned C.I.T.[A] has grossly erred in confirming the decision of the learned Assessing Officer that the claim of the appellant assessee about Long Term Capital Gains of Rs.49,18,824.00 on sale of shares of companies was a bogus and fraudulent claim. The said finding being arbitrary, perverse, devoid of merits and being bad in law the same may please be vacated and it may please be held that the impugned claim of the appellant assessee is genuine and the clams made by the appellant assessee in her return of income may please be accepted.

2. The appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal.

5. The appeal in ITA No.372/PN/2014 was filed after a delay of 1260 days.

The assessee has moved an application for condonation of delay in filing the

appeal late before the Tribunal. The plea of the assessee was that the CIT(A)

had dismissed the appeal of the assessee on 19.07.2010. Further, it was

submitted by the assessee that all her tax and legal matters were looked after 3 ITA No.2008/PN/2012 ITA No.372/PN/2014 Mrs Pushpalata Omprakash Bhandari

by her husband late Shri Omprakash Mishrilal Bhandari, who expired due to

sudden cardiac arrest on 26.12.2012 at Goa. In the circumstances, the

assessee claims that she was not aware of the date on which the order was

received in the office. After the demise of her husband, she claims to be in

tremendous mental shock and it took her more than two years to recover out

of the said shock. On or about 30.10.2013, she received a notice from the

Registry of Pune Tribunal intimating the date of hearing in the appeal filed

against the penalty levied under section 271(1)(c) of the Act for assessment

year 2005-06. It was only when she approached the tax consultant in respect

of the said appeal, he asked whether any appeal before the Tribunal was filed

against the dismissal of quantum appeal. On enquiry, it came to her

knowledge that no appeal was filed against the re-assessment order before

the Tribunal. After collecting the copies of documents from the Assessing

Officer, the appeal was filed before the Tribunal after a delay of about 43

months. In the totality of the above said facts and circumstances, she claims

that there was no malafide intention in not filing the appeal within the statutory

time limit and the delay in filing the present appeal was due to the

circumstances beyond her control. Hence, she made a request to condone

the delay in filing the present appeal and the appeal to be decided on merits.

6. The assessee in this regard, has furnished an Affidavit which reads as

under:-

"AFFIDAVIT

I, Mrs.Pushpalata Omprakash Bhandari, aged about 61 years, Occupation Housewife do hereby declare on solemn oath and affirmation as under:

1. That for the A.Y.2005-06, the learned Dy.CIT Circle 2 Pune passed reassessment order u/s 143(3) r.w.s. 147 of the I.T. Act 1961 on 22/12/2008 in my case determined the net taxable income at Rs.49,25,350.00 for the reasons as fully mentioned in the said order.

2. That the said reassessment order was challenged by me before the learned C.I.T.[A] II Pune by filing an appeal.

4 ITA No.2008/PN/2012 ITA No.372/PN/2014

Mrs Pushpalata Omprakash Bhandari

3. That the learned C.I.T.[A] vide his appellate order dt.19/07/2010 was pleased to dismiss my appeal for the reasons as fully mentioned in the impugned appellate order.

4. That all my tax and legal matters were looked after by my husband Late Shri Omprakash Mishrilal Bhandari who unfortunately expired due to sudden cardiac arrest on 26/12/2012 at Goa. In the circumstances I do not know the exact date on which the impugned order was received in our office.

5. After the sudden demise of my husband I had tremendous mental shock and it took about more than two years for me to recover from shock.

6. On or about 30/10/2013 I received the notice from the Registry of I.T.A.T. Pune intimating the date of hearing in ITA No.2008/PUN/2012 as 03/12/2013, in respect of the appeal filed by me against the penalty levied u/s 271[l][c] of the I.T. Act 1961 for the A.Y.2005-06.

7. When I approached to my tax consultant in respect of the aforesaid appeal, he asked me whether any appeal against the appellate order passed by the learned C.I.T.[A] dismissing my appeal against the reassessment order was filed before the Hon. I.T.A.T. As explained earlier since all my tax and legal matters were looked after by my late husband, I was unaware about the said fact. Unfortunately after the demise of my husband, some key persons from our accounts department had also left the job.

8. The relevant papers were also not available in our office. Upon enquiries with the office of the registry ITAT it was observed that no appeal against the reassessment order was filed before the Hon. I.T.A.T. Pune Benches Pune. I am not aware about the reasons as to why my late husband did not prefer any appeal before the Hon. I.T.A.T. Pune against the appellate order passed by the learned C.I.T.[A]

9. With utmost difficulty, I have collected the copies of documents from the learned Assessing Officer. I am now filing the appeal before the Hon. I.T.A.T. Pune Benches Pune challenging therein the appellate order passed by the learned C.I.T.[A] for the A.Y.2005-06, whereby he has dismissed my appeal filed before him against the reassessment order for A.Y.2005-06 framed by the learned Assessing Officer. In the circumstances there is thus delay of about 43 months in filing the present appeal.

10. I have a good case and in various similar cases the Hon. I.T.A.T. Pune benches have quashed the reassessment orders.

11. I am a widow and my husband died due to sudden cardiac arrest. Due to his untimely death, my life is totally shattered. I had no malafide intentions in not filing the appeal within the statutory time limit. The delay caused in filing the appeal is due to circumstances beyond my control.

5 ITA No.2008/PN/2012 ITA No.372/PN/2014

Mrs Pushpalata Omprakash Bhandari

12. This affidavit is executed for filing the same before the Hon. I.T.A.T. Pune benches Pune, in the matter of condonation of delay in filing the appeal.

13. The contents of this affidavit are true and correct to the best of my knowledge and belief.

14. This affidavit is executed at Pune on this 28th day of June 2014.

[Mrs. Pushpalata Omprakash Bhandari] Affiant"

7. The learned Authorized Representative for the assessee took us

through the submissions made in the Affidavit and pointed out that there was

no malafide intention in not filing the appeal in time. Reliance was placed on

the following decisions vis-à-vis condonation of delay in furnishing appeal

late:-

i) N. Balakrishnan Vs. M. Krishnamurthy 1998 (9) TMI 602 - SC

ii) Improvement Trust, Ludhiana Vs. Ujagar Singh & Ors., in Civil Appeal No.2395 of 2008, order dated 09.06.2010

iii) Shivshanti Constructions Pvt. Ltd., Vs. Dy.CIT in ITA No.1049/PN/2011, vide order dated 31.12.2012

Iv) Collector, Land Acquisition Vrs. Mst. Katiji And Others. 167 ITR 471 (SC)

8. The learned Departmental Representative for the Revenue on the other

hand, pointed out that the appeal was dismissed by the CIT(A) on 19.07.2010

and her husband took a conscious decision in not filing any appeal against the

said dismissal of appeal. It was further pointed out by the learned

Departmental Representative for the Revenue that the order levying penalty

under section 271(1)(c) of the Act was passed on 28.02.2011, against which

the appeal was decided by the CIT(A) on 11.06.2011 and there was total

compliance before the CIT(A). The date of death was 26.12.2012 and hence

where the assessee has failed to furnish the reasons for the delay in furnishing

the appeal, there was no merit in the condonation application moved by the

assessee. Reliance in this regard was placed on the ratio laid down by the 6 ITA No.2008/PN/2012 ITA No.372/PN/2014 Mrs Pushpalata Omprakash Bhandari

Hon'ble Madras High Court in M. Loganathan v. Government of India

represented by Commissioner of Income-tax [2008] 302 ITR 139 (Mad).

9. We have heard the rival contentions and perused the record. The first

aspect of the appeal before us is in relation to the condonation of delay in filing

the appeal late by about 43 months. The assessee has filed an Affidavit along

with an application for condonation of delay in filing the appeal late before the

Tribunal. The perusal of reasons in the said Affidavit reflects the delay in

furnishing the appeal were for reasons which were beyond the control of the

assessee. The Hon'ble Supreme Court in Collector, Land Acquisition Vrs.

Mst. Katiji And Others (supra) held as under:-

"When technical consideration and substantial justice are pitted against each other, the courts are expected to further the cause of substantial justice. This is for the reason that an opposing party in a dispute cannot have a vested right in injustice being done because of a non-deliberate delay. Therefore, it follows that while considering matters relating to the condonation of delays a judicious and liberal approach is to be adopted. If sufficient cause is found to exist which is bona fide and not due to negligence of the applicant, the delay needs to be condoned in such which subserves the end of justice - that being the life purpose of the existence of the institution of courts."

10. Further, the Hon'ble Supreme Court in N. Balakrishnan Vs. M.

Krishnamurthy (supra) also while adjudicating the issue of delay observed as

under:-

"13. It must be remembered that in every case of delay, there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy, the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time, then the court should lean against acceptance of the explanation. While condoning the delay, the court should not forget the opposite party altogether. It must be borne in mind that he is a loser and he too would have incurred quite large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant, the court shall compensate the opposite party for his loss."

11. The Hon'ble Supreme Court in Improvement Trust, Ludhiana Vs. Ujagar

Singh & Ors. (supra) held as under:-

7 ITA No.2008/PN/2012 ITA No.372/PN/2014

Mrs Pushpalata Omprakash Bhandari

"2. After all, justice can be done only when the matter is fought on merits and in accordance with law rather than to dispose it of on such technicalities and that too at the threshold. Both sides had tried to argue the matter on merits but we refrain ourselves from touching the merits of the matter as that can best be done by the Executing Court which had denied an opportunity to the appellant to lead evidence and to prove the issues so formulated.

3. In our opinion, ends of justice would be met by setting aside the impugned orders and matter is remitted to the Executing Court to consider and dispose of appellant's objections filed under Order 21 Rule 90 of CPC on merits and in accordance with law, at an early date.

It is pertinent to point out that unless malafides are writ large on the conduct of the party, generally as a normal rule, delay should be condoned. In the legal arena, an attempt should always be made to allow the matter to be contested on merits rather than to throw it on such technicalities. Apart from the above, appellant would not have gained in any manner whatsoever, by not filing the appeal within the period of limitation. It is also worth noticing that delay was also not that huge, which could not have been condoned, without putting the respondents to harm or prejudice. It is the duty of the Court to see to it that justice should be done between the parties."

12. In the case before us, there is no material on record to doubt the

bonafides of the assessee and there is no reason to doubt the bonafides of

reason for delay. In the totality of the above said facts and circumstances, the

delay in filing the present appeal belatedly deserved to be condoned.

Accordingly, we condone the delay in filing the appeal before the Tribunal and

proceed to decide the appeal on merits after hearing both the parties.

13. The learned Departmental Representative for the Revenue placed

reliance on the ratio laid down by the Hon'ble Madras High Court in M.

Loganathan v. Government of India represented by Commissioner of Income-

tax (supra), but because of the ratio laid down by the Hon'ble Supreme Court

in the decisions referred to by us in the paras hereinabove, we find no merit in

the reliance placed upon by the learned Departmental Representative for the

Revenue.

14. The issue on merits raised is against computation of income from

capital gains on sale of shares of companies, which were held to be bogus

and fraudulent, by the authorities below.

8 ITA No.2008/PN/2012 ITA No.372/PN/2014

Mrs Pushpalata Omprakash Bhandari

15. The brief facts of the case are that, the assessee had declared income

from long term capital gains on sale of shares of M/s. Fast Track

Entertainment Ltd. The Assessing Officer however, received information from

the ADIT (Investigation) Unit-1(1), Pune regarding irregularities in the

purchase and sale of share transactions of M/s. Fast Track Entertainment Ltd.

and another company and pursuant to the said information, the reasons were

recorded for issue of notice under section 148 of the Act which are reproduced

at pages 2 and 3 of the assessment order. The Assessing Officer further

noted that the assessee during the year under consideration had sold shares

of the said company at Rs.49,18,824/- and had claimed long term capital gains

of Rs.49,15,723/-. During the course of search operations carried out by the

Investigation Wing, Pune in the offices and residential premises of several

stock brokers and managers of finance companies, it was found that there

were large scale manipulations in purchases and sale of some of the shares.

The shares of the alleged companies were shown to have been purchased at

the prevailing market rate of Rs.1/- to 2/- per share to facilitate the concerned

share purchaser to claim shares holding for more than 12 months, whereas in

actual practice, there is no real purchase or sale of shares at all. Some of the

brokers in the statements recorded before the authorities below had admitted

that they had issued back dated bogus purchase bills in respect of shares of

these companies in order to show the holding period to be more than 12

months. The main purpose behind the same was to introduce unaccounted

funds into the books of account under the guise of long term capital gains.

The Assessing Officer noted that the assessee had shown cost of purchase of

1,00,000 shares at Rs.2,12,750/- which were purchased from the broker Sunil

shares and Stock P. Ltd. The said shares purchased in physical form and

copies of contract notes of purchase of these shares in the month of June,

2003 were furnished before the Assessing Officer. However, from the ledger

account extract of brokers submitted by the assessee, it was seen that though 9 ITA No.2008/PN/2012 ITA No.372/PN/2014 Mrs Pushpalata Omprakash Bhandari

the purchases were made in the month of June, 2003, the payment to the

broker was made on 15.07.2004. Further, the shares were de-materialized on

26.07.2004. The Assessing Officer was of the view that the claim of the

assessee regarding purchase of shares in the month of June, 2003 was not

correct. The assessee had sold 70,000 shares in the month of August, 2004

for Rs.49,18,824/- and after claiming deduction of Rs.3,101/- had shown sale

of Rs.49,15,723/-. During the course of investigation by the Investigation

Wing, Pune, information was collected from the Bombay Stock Exchange,

which reported that the company M/s. Fast Track Entertainment Ltd. had

earned very low income of Rs.2.1 lakhs and marginal net profit of Rs.1.1 lakhs

during the financial year ending 31.03.2004. However, the price of scrip

increased from Rs.13.16 to Rs.33.30 and then to Rs.60/-. Further, information

was collected in respect of market transactions conducted by the said

company which is reproduced by the Assessing Officer at pages 5 and 6 of the

assessment order. On analysis, there was a proposal to initiate action against

certain companies and the name of the companies from whom the assessee

had purchased the said shares was missing. As per information, it was noted

that the contract notes, bills issued by the brokers were found to be bogus on

verification from the stock exchange and further, the brokers who had issued

contract notes and bills were found to be involved in price manipulations of

respective scrips. In view of the above said exercise and the verification from

the BSE, the final conclusion was drawn that the purchase of shares of M/s.

Fast Track Entertainment Ltd. had not taken place on the said date. Further,

investigation by various regulating authorities into the price manipulations of

scrips of various companies also proves the said fact the companies of which

shares were claimed to have transacted by the assessee, also enjoyed

dubious reputation and were under investigation by several regulatory

authorities. In view thereof, the assessee's claim of sales of shares of M/s.

Fast Track Entertainment Ltd., were held sham arrangement to declare long 10 ITA No.2008/PN/2012 ITA No.372/PN/2014 Mrs Pushpalata Omprakash Bhandari

term capital gain and amount received on sale of shares, was added as

income from other sources.

16. The CIT(A) upheld the order of Assessing Officer in view of the fact that

the transactions from which long term capital gain was claimed to have arisen

did not accord with human probabilities and hence, the income declared under

the head capital gain was held to be non-genuine and the entire sale proceeds

were to be assessed as undisclosed income.

17. The assessee is in appeal against the order of CIT(A) and it was

pointed out by the learned Authorized Representative for the assessee that

the shares were admittedly purchased in the month of June, 2003, against

which no payment was made by the assessee since the broker owed money

to the assessee. Our attention was drawn to the documents placed at pages

12 and 3 of Paper Book. It was further pointed out by the learned Authorized

Representative for the assessee that the shares purchased by the assessee

were converted into Jumbo Certificates which in turn were D-mated and our

attention was drawn to the D-Mat statement placed at page 31 of the Paper

Book. The learned Authorized Representative for the assessee pointed out

that the addition was made in the hands of the assessee only on surmises and

no question in this regard was put either to the broker or the assessee.

Reliance was placed on the ratio laid down by the Pune Bench of the Tribunal

in Sushila Suresh Chavan Vs. ITO in ITA No.1436/PN/2011, order dated

15.01.2014. The learned Authorized Representative for the assessee also

placed on record the statement issued by The Cosmos Co-operative Bank Ltd.

18. The learned Departmental Representative for the Revenue pointed out

that the D-Mat of said shares was carried out on receipt of Jumbo Certificates.

The learned Departmental Representative for the Revenue referred to the

order of CIT(A), in which it has been pointed out that on receipt of information, 11 ITA No.2008/PN/2012 ITA No.372/PN/2014 Mrs Pushpalata Omprakash Bhandari

other parties had revised its returns of income and offered the income to tax.

The learned Departmental Representative for the Revenue further pointed out

that in view of the surrounding circumstances, the transactions conducted by

the assessee was a sham transaction and there was no merit in the plea of the

assessee. Reliance was placed on the ratio laid down by the Mumbai Bench

of the Tribunal in Shri Arvind M Kariya Vs. ACIT, ITA No.7024/Mum/2010, vide

order dated 30.01.2013.

19. We have heard the rival contentions and perused the record. The

assessee during the year under consideration had transacted into purchase

and sale of shares. One transaction which has been taken note of by the

authorities below was the sale of shares of M/s. Fast Track Entertainment Ltd.

The assessee claims to have sold 1,00,000 shares of the said concern during

the year under consideration, which in turn were purchased by the assessee in

June, 2003. The assessee has placed on record the contract notes for the

purchase of shares in different lots from the share broker Sunil Shares & Stock

P. Ltd. along with copy of account of assessee in the books of Sunil Shares &

Stock P. Ltd. The assessee during the said financial year i.e. 2003-04 was

also purchasing and selling shares and against the sale proceeds of various

shares sold by the assessee in that period, the purchase price of shares of

M/s. Fast Track Entertainment Ltd. was adjusted by the broker. Admittedly,

the assessee did not pay consideration either by cheque or cash but same

was adjusted against the amount due from the said broker in the running

account of the assessee with the said broker. The contract notes for the

purchase of the said shares are also placed on record by the learned

Authorized Representative for the assessee. Further, on 04.07.2003, the

company had confirmed the receipt of transfer deeds along with share

certificates to transfer the said shares in the name of the assessee. The

assessee had sent three certificates i.e. the first certificate of 28,600 shares 12 ITA No.2008/PN/2012 ITA No.372/PN/2014 Mrs Pushpalata Omprakash Bhandari

bearing distinctive numbers 1167401 to 1196000, 40500 shares with

distinctive numbers 1717201 to 1757700 and 30,900 shares with distinctive

numbers 4396001 to 4426900, totaling 1,00,000 shares to the company along

with transfer deeds for transferring the said shares in the name of assessee.

Copy of the said letter dated 04.07.2003 is placed at page 25 of the Paper

Book. In exchange of the shares held by the assessee, Jumbo shares were

issued by the said company on 16.02.2004 and the copy of the

communication is placed at page 26 of the Paper Book. The copies of the

Jumbo Certificates are placed at pages 27 to 29 of the Paper Book. The copy

of D-Mat account dated 31.07.2004 evidencing the D-matting of 1,00,000

shares on 26.07.2004 is placed at page 30 of the Paper Book. The said

shares were sold by the assessee in the month of August, 2004 in different

lots and the contract notes of the broker are placed at pages 32 to 37 of the

Paper Book. The total sale consideration received by the assessee was

Rs.42,14,824/- from the share broker Pilot Credit Capital Ltd. and further sum

of Rs.7,03,614/- from the share broker SSKI Investor Services Pvt. Ltd., as per

contract notes placed at pages 32 to 37 of Paper Book and the copy of

accounts placed at page 38 of the Paper Book.

20. The question which arises before us is the treatment of gain arising on

the said transaction of sale, purchase of shares is to be assessed under the

head income from long term capital gains as claimed by the assessee or

under the head income from other sources as determined by the authorities

below. The first aspect to be considered in the case of assessee is that

though enquiries were made in respect of several companies and brokers, but

the name of broker through whom the assessee had transacted in the shares

of M/s. Fast Track Entertainment Ltd. does not appear in that said list.

Further, the assessee has produced complete evidence vis-à-vis the purchase

of shares and the delivery of shares certificates to the assessee and its 13 ITA No.2008/PN/2012 ITA No.372/PN/2014 Mrs Pushpalata Omprakash Bhandari

consequent conversion into Jumbo Certificates and further sale transaction

through different brokers. In the totality of the above said facts and

circumstances, where the assessee has placed on record the complete

evidence of purchase and sale of shares, merely because the shares were D-

matted in July, 2004 and thereafter, were sold in the month of August, 2004,

does not establish the case of authorities below, in view of the circumstantial

evidence produced by the assessee. In the totality of said evidences, we hold

that once the assessee had taken the delivery of shares by way of share

certificates, which in turn, were forwarded to the company along with transfer

deeds on 04.07.2003 itself establishes the case of the assessee of having

purchased the said shares during that period. Further, the said shares were

converted into Jumbo Certificates vide communication dated 16.02.2004 and

thereafter, there was de-materialization of the shares on 26.07.2004. In the

entirety of the above said facts and circumstances, we hold that the gain

arising on transfer of shares is to be assessed as income from long term

capital gain in the hands of the assessee.

21. We further find support from the ratio laid down by the Hon'ble Bombay

High Court in CIT Vs. Shri Mukesh Ratilal Marolia in Income Tax Appeal

No.456 of 2007, vide order dated 07.09.2011, wherein it was held as under:-

"5. On further Appeal, the ITAT by the impugned order allowed the claim of the Assessee by recording that the purchase of shares during the year 1999-2000 and 2000-2001 were duly recorded in the books maintained by the Assessee. The ITAT has recorded a finding that the source of funds for acquisition of the shares was the agricultural income which was duly offered and assessed to tax in those Assessment Years. The Assessee has produced certificates from the aforesaid four companies to the effect that the shares were in-fact transferred to the name of the Assesses. In these circumstances, the decision of the ITAT in holding that the Assessee had purchased shares out of the funds duly disclosed by the Assessee cannot lie faulted.

6 Similarly, the sale of the said shares for Rs.1,41,08,484/- through two Brokers namely, M/s Richmond Securities Pvt. Ltd. and M/s.Scorpio Management Consultants Pvt. Ltd. cannot be disputed, because the fact that the Assessee has received the said amount is not in dispute. It is neither the case of the Revenue that the shares in 14 ITA No.2008/PN/2012 ITA No.372/PN/2014 Mrs Pushpalata Omprakash Bhandari

question are still lying with the Assessee nor it is the case of the Revenue that the amounts received by the Assessee on sale of the shares is more than what is declared by the Assessee. Though there is some discrepancy in the statement of the Director of M/s. Richmand Securities Pvt. Ltd. regarding the sale transaction, the Tribunal relying on the statement of the employee of M/s. Richmand Securities Pvt. Ltd. held that the sale transaction was genuine.

7 In these circumstances, the decision of the ITAT in holding that the purchase and sale of shares are genuine and therefore, the Assessing Officer was not justified in holding that the amount of Rs.1,41,08,484/- represented unexplained investment under Section 69 of the Income Tax Act, 1961 cannot be faulted.

8. In the result, we see no merit in this Appeal and the same is dismissed with no order as to costs."

22. Further, Pune Bench of the Tribunal in Sushila Suresh Chavan Vs. ITO

in ITA No.1436/PN/2011, relating to assessment year 2003-04, vide order

dated 15.01.2014, in similar circumstances had held that the transaction of

purchase and sale of shares of Database Finance Ltd. was a genuine

transaction and the claim of long term capital gain was allowed in the hands of

the assessee therein. In the totality of the above said facts and circumstances

and the case laws, we find no merit in the order of CIT(A) and reversing the

same, we direct the Assessing Officer to compute the income in the hands of

the assessee under the head 'income from long term capital gains'. Thus, the

grounds of appeal raised by the assessee are allowed.

23. Now, coming to ITA No.2008/PN/2012, in which the issue raised is

against the levy of penalty under section 271(1)(c) of the Act, which was levied

against the addition made in the hands of the assessee on account of the sale

of shares of M/s. Fast Track Entertainment Ltd. being held as income from

other source. Since, we have already held that the income from sale of shares

is assessable in the hands of the assessee as income from capital gains and

the assessee having furnished the same under the said head in the return of

income, there is no merit in the levy of penalty under section 271(1)(c) of the 15 ITA No.2008/PN/2012 ITA No.372/PN/2014 Mrs Pushpalata Omprakash Bhandari

Act and the same is deleted. The grounds of appeal raised by the assessee in

this regard, are allowed.

24. In the result, both the appeals of the assessee are allowed.

Order pronounced on this 18th day of March, 2015.

Sd/- Sd/- (G.S. PANNU) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER

Pune, Dated: 18 th March, 2015.

GCVSR

Copy of the order is forwarded to: - 1) The Assessee; 2) The Department; 3) The CIT(A)-II, Pune; 4) The CIT-II, Pune; 5) The DR "A" Bench, I.T.A.T., Pune; 6) Guard File. By Order //True Copy// Assistant Registrar I.T.A.T., Pune