2019 (8) TMI 890 - ITAT KOLKATA

Bogus loss from client code modification - HELD THAT:- As decided in SUMATI KUMAR LUNIA VERSUS I.T.O WARD 36 (4) , KOLKATA [2019 (2) TMI 1683 - ITAT KOLKATA] in order to find out whether the transaction is genuine or ingenuine, it is neither the expedience or correctness of the decision nor the business expertise of the person to be considered. It is to be considered on the basis of the materials that there was no such transaction and that these share transactions were paper transactions. The suffering of loss could not be a factor for such purpose.

The impugned loss claimed by assessee is genuine loss in the above facts and circumstances of the case and therefore eligible for deduction. Accordingly, AO is directed. This ground of assessee's appeal is allowed. As put up a specific query to the department as to whether assessee’s broker carried out the relevant client code modification as per prescribed rules or not. There is no such violation pointed out during the course of hearing before me. Therefore, adopt the above detailed discussion mutatis mutandis to delete the impugned addition - Decided in favour of assessee.

Bogus LTCG - Unexplained cash credits - sale proceeds derived from sale of shares in M/s GCM Securities Pvt. Ltd and Kappac Pharma Ltd. as unexplained - HELD THAT:- There can hardly be any dispute that assessee has placed on record his supportive documentary evidence comprising of relevant purchase bills of shares allotment, certified copies, contract notes, brokerage details etc. We put up a specific query as to whether any of entry operators searched or survey has quoted these assessees names or not before the departmental authorities. There is no such material in the case file indicating such as statement.

In Smt. Sangita Jhunjhunwala vs. ITO [2019 (1) TMI 298 - ITAT KOLKATA] has deleted similar bogus LTCG coming to Revenue’s arguments that department had searched / surveyed various entry operators alleged to have engaged in giving bogus LTCG regarding very scrip, as put a specific question to Mr. Bhattacherjee as to whether any of the said entry operators had ever quoted assessee’s name or not. The replies is received in negative. Coupled with this, there is no substance in Revenue’s argument that similar addition(s) stand affirmed in various judicial precedents (supra) for the reason that sec. 68 addition is a factual issue requiring the taxpayer to prove the identity, genuineness and creditworthiness of the relevant sum credited. All these assessees have placed sufficient materials on record indicating them to have derived the impugned LTCG form sale of shares

This tribunal’s yet another decision in Canara Bank vs. JCIT [2017 (11) TMI 1425 - ITAT BANGALORE] holds that the estopple principle does not apply in income tax proceedings. We therefore reject Revenue’s arguments in support of impugned addition - Decided in favour of assessee.