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2022 (2) TMI 691 - ITAT MUMBAIAssessment u/s 153A - Bogus LTCG - AO disallowed the claim of exemption claimed u/s 10(38) treating the same as a non-genuine gain - Also added as commission at the rate of 6% on the amount of capital gains claimed as exempt by the Assessee - HELD THAT:- It is fact on record that whatever addition made by the AO relating to share capital and share premium which are already available on record and assessee has already disclosed the same while filing the return of income and balance sheet. There is nothing on record which shows that new incriminating material was found during search. Therefore, the courts have held that no addition can be made in the case of unabated assessment years without there being incriminating material found during search. We observe from the various decisions and particularly the Hon’ble Jurisdictional High Court in the case of Continental Warehousing Corporation [2015 (5) TMI 656 - BOMBAY HIGH COURT] which observed that the expression ‘incriminating material’ would mean any evidence or material found during search which were not submitted or produced in the course of filing return of income / original assessment and any undisclosed income or property discovered during search. But in the given case, we observe that no such material or income was found during search but AO relied completely on the information forwarded by the investigation wing post search. Therefore, the assessments made in A.Y. 2011-12 in the case of Shripal Raj Lodha and in A.Y. 2010-11 in the case of Smt Sarita Lodha , being unabated assesments, and hence no addition towards denial of exemption u/s 10(38) could be done. Accordingly, the additions made thereon are hereby deleted. Allowability of long term capital gain and claimed the exemption u/s. 10(38) - In the given case , it clearly shows that no such opportunity was given to the assessee and further we observe that the Assessing Officer decided to proceed by relying on information contained in the SEBI report without establishing the connection of direct or indirect involvement of the assessee in the tainted transactions and proceed to apply concept of preponderance of human probability. Therefore, in our considered view, assessee has submitted all the information relating to buying and selling of the scrips and the Assessing Officer has not found any discrepancies in the documents submitted by the assessee and it is a case of the AO that assessee is involved in directly or indirectly in manipulation of the prices of the scrips and taken direct or indirect benefit by manipulation of the above said scrips. However, assessing officer has not brought or proved anything on record that the assesse was involved in manipulation of prices or taken benefit by having any relationship with the persons involved in such activities. Even the SEBI order does not mention the name of the assessee to have been involved in the artificial price rigging of shares. Hence the entire addition has been made in the hands of the assessee merely by surmise and conjecture and not backed by any evidence. Therefore, we do not find any reason to sustain the addition made by the Assessing Officer and confirmed by the Ld.CIT(A). Accordingly, the grounds raised by the assessee are allowed
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