- (1.) Both the present appeals have been filed by the assessee as well as Revenue under Section 260-A of the Income Tax Act, 1961, against the judgment and order dated 09.02.2007 passed by the Income Tax Appellate Tribunal, Lucknow, in I.T.A. No.735/Luc/2001, for the assessment year 1997-98. On 03.07.2007, a Coordinate Bench of this Court has admitted the appeal on the following substantial questions of law:- (2) Whether on the facts and in the circumstances of the case, will the word actual delivery under the provisions of Section 43 (5) will mean the actual delivery to the assessee and not to his agent. (3) Whether the learned Tribunal was justified in ignoring the fact that a Bank Draft of Rs.19,80,020/- dated 29th March, was sent to the broker which includes the brokerage of Rs.45,495/- and therefore he acted as an agent of the appellant. (4) Whether the learned Tribunal was justified in not allowing the claim of short term capital loss against the long term capital gain declared by the appellant during the year under consideration merely on the ground that broker had taken the delivery
(2.) The brief facts of the case are that the appellant is a dealer in Bajaj Vehicles and its spare parts. During the assessment year under consideration, the appellant-assessee had disclosed the long term capital gains of Rs.75,78,507 and has also tried set off short term capital loss of Rs.19,43,891, but the A.O. has not allowed the set off on the ground that loss was bogus. The A.O. also doubted the genuineness of the transaction. Finally, he made the addition of Rs.19,43,891/- which was deleted by the first appellate authority. Being aggrieved, the department has filed an appeal before the Tribunal who upholds the order of the A.O. by setting aside the order of first appellate authority. Not being satisfied, the assessee has filed the present appeal.
(3.) With this background, Sri Pradeep Agarwal, learned counsel for the assessee relied on the order of the CIT(A). He further submits that the transaction was done with M/s Vikas Somani Securities Pvt. Ltd., Calcutta who has supplied the necessary information pertaining to the share dealing to the Director Investigation, Calcutta vide letter dated 10.03.2000 and copy was forwarded to the assessee vide letter dated 06.06.2000. In the said letter, the share broker has admitted the receipt of a cheque of Rs.19,80,020/-. According to the learned counsel, the findings of the A.O. are based on irrelevant material and conclusions are based on conjectures, surmises and suspicious only. It is submitted that the short term capital loss was accepted as genuine by the first appellate authority. For this purpose, he read out the order passed by the first appellate authority, where it was stated that the identity of the share broker was established. Share dealing business were done in the name of the company M/s Vikas Somani Securities Pvt. Ltd. The registration number of share brokers with SEBI is INB-030878935. The PAD used giving distinctive numbers of share purchases and sold were given by the broker M/s Vikas Somani Securities Pvt. Ltd. and the broker has confirmed the receipt of demand draft of Rs.19,80,020/- The conclusion reached by the assessing officer has no direct nexus with primary and basic facts.;