Decided on March 14,2008



N.V. Vasudevan. J.M. - (1.) THIS is an appeal by the assessee against the order dated 19-8-2004 of Commissioner (Appeals)-II, Agra relating to assessment year 2001-02.
(2.) The only issue for consideration in this appeal by the assessee is as to whether the revenue authorities were justified in bringing to tax a sum of Rs. 5,67,265 being the sale proceeds of shares of M/s Parnami Habitat Developers Ltd. as income of the assessee from undisclosed sources and in the process rejecting the claim of the assessee that it had gained a sum of Rs. 5,37,740 as a long-term capital gain on the sale of the above shares. The facts and circumstances giving rise to the present appeal are as follow:
(3.) THE assessee is an individual. THE assessee filed his return of income on 30-7-2001 at Rs. 97,762 which included long-term capital gain of Rs. 5,37,740 from sale of shares which was claimed as exempt under Section 54F. Subsequently, since the builder's project did not get approval and it appeared that the completion of the house property would not be achieved within the stipulated time the assessee filed revised return on 27-3-2002 withdrawing the claim under Section 54F. THE case was processed under Section 143(1) on 21-12-2003. Subsequently, it was taken for scrutiny under Section 143(2) in the normal course. During the scrutiny, the assessee was asked to prove the capital gain and genuineness of the transactions relating thereto. In support of his claim the assessee filed before the assessing officer: (i) Copy of bill issued by M/s S.K. Financial Services, broker, for purchase of shares. (ii) Copy of letter from the company confirming transfer of shares in the name of the assessee. (iii) Copies of share certificates showing the transfer of shares in the name of the assessee.j (iv) Copy of bill issued by broker M/s H.B. Relan & Co. for the sale of shares. (v) Copy of share quotation prevalent at the time of sale of shares from M.P. Stock Exchange. (vi) Photocopy of the account payee draft received from the broker against the sale proceeds.;

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