Law:

Section:

Section 68 of the Income-tax Act, 1961 - Cash credit - Assessment year 2001-02 - Fact that assessees in group had purchased and sold shares of similar companies through same broker could not be a ground to hold that transactions were sham and bogus, especially when documentary evidence was produced to establish genuineness of claim [In favour of assessee] The assessee had claimed/offered long-term capital gains on sale of shares of various listed companies, which was accepted by the Assessing Officer. Subsequently, there was a search action in the case of various assessees belonging to a group known as Haldiram group. The group offered additional income of Rs. 2 crores, out of which Rs. 3 lakhs were offered in the hands of the assessee. The Assessing Officer on the basis of the seized material issued notice under section 153A and subsequently, passed an assessment order under section 153A wherein he computed the total income by disallowing the long-term capital gain and added the entire sale proceeds received on sale of shares as income from undisclosed sources under section 68. The revenue was of the opinion that most of the sales of the shares effected by the group were of the same companies and through the same brokers. The Commissioner (Appeals) as well as the Tribunal deleted the addition. Held that from the documents produced before the Court it was seen that the shares in question were, in fact, purchased by the assessees on the respective dates and the company had confirmed to have handed over the shares purchased by the assessees. Similarly, the sale of the shares of the respective buyer was also established by producing documentary evidence. It is true that some of the transactions were off-market transactions. However, the purchase and sale price of the shares declared by the assessees were in conformity with the market rates prevailing on the respective dates, as was seen from the documents furnished by the assessees. Therefore, the fact that some of the transactions were off-market transactions could not be a ground to treat the transactions as sham transactions. On a perusal of those documentary evidences, the Tribunal had arrived at a finding of…

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