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2023 (9) TMI 1455 - ITAT SURATBogus LTCG/STCG - denial of exemption u/s 10(38) - Scrip was identified as a listed penny stock on BSE used for generating bogus LTCG/STCG as per the data received from the Investigation Wing - stock prices of the companies are manipulated to provide the exempted long term capital gain - CIT(A) deleted addition - HELD THAT:- AO made addition solely on the basis of information available with him. Neither the source of such information is recorded in his assessment order nor such information was shared with the assessee. Assessee in his reply, specifically mentioned that AO considered the sale entry twice including one which is reversed on the same date. Even such fact was not examined by assessing officer. AO made addition of credit without application of mind. Assessee explained that he made transaction of sale of shares in the legitimate manner and paid STT. Assessee further explained that the holding period of the shares was more than seven years and all the evidences with regard to purchase and sale of scrips was furnished. No comment on such evidence was made by AO on such evidences. AO has not discussed the basic fact, whether the name of assessee was mentioned in the alleged information or the broker of the assessee was involved in price manipulation with stock exchange. CIT(A) granted relief to the assessee buy taking view that complete details of transaction in the form of contract note from broker's ledger, D-mat account and bank statement was furnished by the assessee. The assessee proved the bona fide of nature and source of sum credit in his books. Such explanation provided by assessee has not been considered by Assessing Officer. AO has not confronted with any statement or relevant part of material to the assessee, which was violated the principle of natural justice. It was also held that the AO has not brought any material on record regarding turnover or profit or net worth of Global Capital Markets Ltd, which is still continuing be traded on BSE and has not been backlisted or barred by Security Exchange Board of India. The shares were purchased through Calcutta Stock Exchange on 27.03.2003 and at that time STT Regulation has not come in force. Thus CIT(A) while granting relief to the assessee considered entire facts and the evidence filed before him, which does not require any interference, which is affirmed. Also the tax effect is also less than the monetary limit fixed by CBDT and the present case is not covered by clause 10(c) of the Circular No. 3/2018 Clause -c of para 10 of said circular deals with audit objection. There is no material on record to show the acceptance of such audit abjection. Mere mentioning of such facts in the grounds of appeal, without showing any material is not sufficient. Thus, the revenue failed on both the counts. In the result, the grounds of appeal raised by the revenue are dismissed.
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