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2018 (10) TMI 1432 - ITAT KOLKATAAddition made u/s 68 in respect of LTCG on sale of shares - assessee claimed exempt income u/s 10(38) - AO sought to treat the LTCG reported by the assessee as bogus as according to him, the scrip did not justify such a huge increase in its sale price and that the increase in share price thereon was only artificial and due to price rigging carried out by some persons in the market. - Held that:- With regard to the arguments of the ld DR that at the time of purchase of shares of Trinity Tradelink Limited by the assessee, the shares of STFL were very much available in the stock market and the assessee could have very well bought the shares of STFL from the open market. He need not have resorted to purchasing the shares of Trinity Tradelink Ltd and later on pursuant to demerger, get the shares in STFL. In this regard, we find from the materials available on record, that the assessee was not the director or promoter of either M/s Trinity Tradelink Ltd or STFL. Assessee was only a shareholder in Trinity Tradelink Ltd and pursuant to the demerger of that company with another company, the assessee was allotted shares in STFL, which cannot be faulted with by the revenue by mere surmise and conjecture and without bringing any evidence on record. Moreover, it is for the assessee to chose whether to buy a particular scrip and the department cannot step into the shoes of the assessee in this regard and participate in the business and investment decisions of the assessee. The transactions of purchase and sale of shares happen in the secondary market based on the prevailing market prices through the registered stock brokers in the concerned stock exchange. This is how the transactions happen across the world. For these events, the documents are furnished by the stock brokers in the form of contract notes, delivery instructions submitted by the parties for effecting the sale through the recognized stock exchange and transactions of movement of shares from one person to another are recorded in the respective demat statements issued by the concerned Depository Participant. These documents cannot be disbelieved as not giving any credence to the share transactions as they had happened in the open market. In any case, it is for the revenue to bring out any other extraneous material to prove that these documents are fabricated with the connivance of assessee, registered stock broker and recognized stock exchange. It cannot be brushed aside that these transactions in the open market had duly suffered STT which is also reflected in the contract notes issued by the stock broker and the revenue had already been enriched by the STT component. Hence it would not be proper for the ld DR to state that these documents cannot be relied upon. We hold that the CIT-A had rightly deleted the addition made u/s 68 of the Act in respect of LTCG on sale of shares. Accordingly, the grounds raised by the revenue are dismissed.
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