Vivek Mehta v. Hemant Gupta, J

IN THE HIGH COURT OF PUNJAB AND HARAYANA ATCHANDIGARH ITA No. 894 of 2010 (O&M)Date of Decision: 14.11.2011 The Commissioner of Income Tax-III, Ludhiana ….Appellant Vivek Mehta Versus ….Respondent CORAM:HON’BLE MR. JUSTICE HEMANT GUPTAHON’BLE MR. JUSTICE G.S. SANDHAWALIA HON’BLE MR. JUSTICE G.S. SANDHAWALIA Present:Shri Rajesh Katoch, Advocate, for the appellant. Ms. Radhika Suri, Advocate, for the respondent. HEMANT GUPTA, J. The revenue is in appeal under Section 260A of theIncome Tax Act, 1961 (for short `the Act’), raising the followingsubstantial questions of law:- (i)Whether on the facts and in the circumstances ofthe case, the Hon’ble ITAT is right in upholding theorder of CIT(A) dated 30.9.2008, thereby deletingthe addition of Rs.19,50,590/- made on account ofunexplained deposits in the bank account, on thealleged purchase/sale of shares, as the assesseecould not prove the genuineness of thepurchase/sale of shares. (ii)Whether on the facts and in the circumstances ofthe case, the Hon’ble ITAT is right in upholding theorder of CIT(A) thereby deleting the addition of Rs.58,518/- made on account of commission paidby the assessee outside the books of account on thealleged purchase of shares. The said questions of law are said to have arisen out ofthe order passed by the Income Tax Appellate Tribunal, ChandigarhBench (for short `the Tribunal’) vide order dated 26.2.2010 in ITA No.174/Chd/2008 for the assessment year 2003-04. The assessee declared long term capital gain onsale/purchase of the shares of M/s Master Trust Ltd. and claimedthe same as exempt under Section 54F of the Act. The AssessingOfficer held that the purchase of shares of M/s Master Trust Limited,was bogus and manipulated and therefore, the subsequent sale wasalso bogus. It was thus, held that the assessee introduced hisunaccounted income under the garb of long term capital gain andclaimed same as exempt under Section 54F of the Act. As a result ofthe aforesaid calculations, the credit entries in the Bank account ofthe assessee reflecting sale consideration of shares amounting toRs.19,54,500/- were found to be unexplained credits and added tothe income of the appellant under Section 68 of the Act. The Commissioner of Income Tax, accepted the appealfiled by the assessee after holding that the assessee has purchased1,50,000 shares of M/s Master Trust Limited for Rs.3,03,000/-through M/s Deepak Share and Stock Brokers Pvt. Limited on16.3.2001. The said shares were sold on 24.5.2002 for a sum ofRs.19,54,500/- through M/s R. Kohli and Company. It also found hatthe assessee has earned profit of Rs.3,03,575/- on the date ofpurchase of shares of M/s Himachal Futuristic Limited and investedin the purchase of shares of M/s Master Trust Limited. Such findingwas recorded by the Commissioner in Appeal on the basis of evidence produced by the assessee disclosing Permanent Account Number(PAN) of M/s Deepak Shares and Stock Brokers Ltd. The Commissioner of Income Tax (Appeal) returned afinding that it was a genuine transaction of purchase of sharesthrough M/s Deepak Shares and Stock Brokers and also the salethereof through M/s R. Kohli and Company and the assessee hasassessed the genuine long term capital gain. Such finding wasaffirmed in appeal by the Tribunal. produced by the assessee disclosing Permanent Account Number(PAN) of M/s Deepak Shares and Stock Brokers Ltd. The Commissioner of Income Tax (Appeal) returned afinding that it was a genuine transaction of purchase of sharesthrough M/s Deepak Shares and Stock Brokers and also the salethereof through M/s R. Kohli and Company and the assessee hasassessed the genuine long term capital gain. Such finding wasaffirmed in appeal by the Tribunal. On the basis of the documents produced by the assesseein appeal, the Commissioner of Income Tax (Appeal), recorded afinding of fact that there was a genuine transaction of purchase ofshares by the assessee on 16.3.2001 and sale thereof on 21.3.2002.The transactions of sale and purchase were as per the valuationprevalent in the Stocks Exchange. Such finding of fact has beenrecorded on the basis of evidence produced on record. The Tribunalhas affirmed such finding. Such finding of fact is sought to bedisputed in the present appeal. We do not find that the finding of factrecorded by the Commissioner of Income Tax in appeal, gives give riseto any question(s) of law as sought to be raised in the present appeal.Hence, the present appeal is dismissed. (Hemant Gupta)Judge 14.11.2011Meenu/ds (G.S. Sandhawalia) Judge