2019 (10) TMI 837 - ITAT KOLKATA

Bogus LTCG - addition u/s. 68 - exempt u/s. 10(38) - HELD THAT:- Purchases were made by the assessee in cash for acquisition of shares of companies and the purchase of shares of the companies was done through the broker and the address of the broker was incidentally the address of the company. The profit earned by the assessee was shown as capital gains which was not accepted by the A.O. and the gains were treated as business profit of the assessee by treating the sales of the shares within the ambit of adventure in nature of trade. Thus, it can be seen that in the decision relied upon by the ld. DR, the dispute was whether the profit earned on sale of shares was capital gains or business profit.

It is clear from the above that the facts of the case of the assessee are similar with the facts of the cases discussed supra in para 6 wherein the co-ordinate bench of the Tribunal has deleted the addition and allowed the claim of LTCG and accepted the scrips of M/s. SESL and M/s. SRKIL are not bogus. We, therefore, set aside the order of Ld. CIT(A) and direct the AO not to treat the long term capital gain as bogus and to allow the same and so, delete the consequential addition.

Addition on account of unexplained expenditure incurred for earning the LTCG u/s. 69C - assessee’s claim of LTCG, the consequential expenses incurred by the assessee in this regard is also allowed.