The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that the law does not prohibit to purchase Shares in cash.
Tribunal noted that, ” There is no law which prohibits the purchase of shares in cash, however in the present case, assessee had filed copies of bills of purchase, copy of share certificates and transfer forms etc. before Ld. AO and no adverse inference could be drawn only because the shares were purchased in cash. Regarding Demat of shares, we hold that it is the option of the buyer of shares to keep the shares either in Demat form or in paper form.