Commissioner Of Income Tax,Jaipur-Ii, Jaipur v. Date Of Order ::: 15.11.2010

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANBENCH AT JAIPUR ORDERIN D.B. Income Tax Appeal No.50/2010 Commissioner of Income Tax,Jaipur-II, Jaipur Vs. Smt.Pushpa Malpani Date of Order ::: 15.11.2010 Present Hon'ble the Acting Chief Justice Mr. Arun MishraHon'ble Mr. Justice Mohammad Rafiq Shri R.B. Mathur, Counsel for appellant-revenue#### By the Court (Per Hon'ble Mohammad Rafiq, J.):- This appeal has been filed by revenueagainst order of Income Tax Appellate Tribunal,Jaipur (for short, 'ITAT') dated 28.11.2008which dismissed its appeal preferred againstorder of Commissioner of Income Tax (Appeals){for short, 'CIT (Appeals)} dated 10.01.2008.CIT (Appeals), in his order, directed assessingofficer to treat sale consideration of sharesat Rs.21,87,800/- as long term capital gaininstead of treating it as income from othersources. Assessee originally filed returndeclaring income of Rs.21,45,950/- on29.03.2005 on sale of twenty thousand shares ofM/s. Nageshwar Investment Limited. Those shareswere purchased by assessee on 09.05.2002 at the // 2 // rate of Rs.2.02 Per share through broker ShriV.K. Singhania & Company of Calcutta, whichwere sold on 22.07.2003 at the rate ofRs.109.50 per share. In assessment order passedon 29.12.2006 assessing officer held that totaltransaction in shares were only 1331 duringperiod from December, 2002 to April, 2003 butsale price of shares shot up dramaticallywithin a short span of time. Assessee havingnot furnished any supporting evidence likebalance-sheet/final-statement of M/s. NageshwarInvestment Limited proving worth of thecompany, sale consideration of its shares wasliable to be treated as income from othersources. Shri R.B. Mathur, learned counsel forrevenue, argued that it was a case ofartificial jacking up of price of shares andbroker M/s Ahilya Commercial Private Limited,Kolkata through whom shares were purchased, hadsuffered a bar from Securities and ExchangeBoard of India at the time of transaction. CIT(Appeals) and ITAT both erred in law indeleting additions made by assessing officerunder head of income from other source. Therewas no justification of their interference withwell reasoned assessment order passed by assessing officer. Learned counsel argued thatassessee had in fact not made any genuinetransaction of shares and converted herundisclosed income into long term capital gainthrough accommodation entry of bogus saleconsideration. It was therefore argued thatsubstantial question of law arises in thismatter whether despite numerous discrepanciespointed out by assessing officer in working ofassessee and broker, who was later on banned bythe Stock Exchange for artificially jacking upprice of shares, ITAT/CIT (Appeals) werejustified in reversing additions made by theassessing officer? Upon hearing learned counsel for revenueand perusing impugned order, we find thatwhether or not sale of shares and receipt ofconsideration thereof on appreciated value isessentially a question of fact. CIT (Appeals)and ITAT have both given reasons in support oftheir findings and have found that at the timeof transactions, the broker in question was notbanned by SEBI at the time of transaction andthat assessee had produced copies of purchasebills, contract number share certificate,application for transfer of share certificateto Demat Account along with copies of holding statement in Demat Account, balance-sheet as on31.03.2003, sale bill, bank account, DematAccount and official report and quotations ofCalcutta Stock Exchange Association Limited on23.07.2003. In our view, present appeal doesnot raise any question of law, much-less anysubstantial question of law. This appeal is accordingly dismissed. (Mohammad Rafiq) J. (Arun Mishra) Acting CJ. //Jaiman//