2022 (10) TMI 649 - ITAT JAIPUR

Unexplained credit u/s 68 - Bogus purchases - Transaction of Penny Stock companies and Commission paid thereon - commission paid for acquiring such long-term capital gain added u/s 69C - HELD THAT:- The report of the SEBI Related to the stock market regulation and its order is not in assistance to the revenue based on these findings the CIT hold view that mere statement of third-party is not enough to make addition in the hands of the assessee and also vacated the findings of the ld. AO.

CIT(A) reviewed the copies of the documents filed by the assessee wherein he is reviewed the contract notes, ledger account, bank statement, demat account, affidavit of Anil Agarwal etc. after going through this records he observed that no questions raised before the Anil Agarwal about the transaction entered by the assessee is under his knowledge not only that the Anil Agarwal retracted his statement so even on that count no addition can be made in the hands of the assessee.

CIT(A) extracted various decision that has been considered by him while considering the appeal of the assessee and the same were not reiterated here to avoid the duplication but he has mainly considered the various jurisdictional binding decision and based on those findings he allowed the appeal of the assessee.

DR reiterated the findings recorded by the AO and submitted that the ld.CIT(A) has deleted the addition merely on technical ground and no merits of the case is discussed. We find that ld. CIT(A) has dealt all the aspects that the ld. AO has raised and given his finding on each one every issue in detailed and has also called for the remand report, now the revenue cannot take a plea on the issue again.

Thus, we do not find any reason to deviate from the findings recorded by the CIT(A) in his order and we do not find any mistake of facts as well as in law in the detailed and reasoned findings of the CIT(A). Addition made by the AO is based on mere suspicion and surmises without any cogent material to show that the assessee has brought back his unaccounted income in the shape of long/short term capital gain. On the other hand, the assessee has brought all the relevant material to substantiate its claim that transactions of the purchase and sale of shares are genuine. Accordingly, we do not find any reasons to deviate from the detailed and reasoned finding of the CIT(A) and thus we dismiss the ground no 1 of the revenue.

Addition on account of notional commission u/s 69C - treatment of long/short term capital gain as bogus - Once, we have confirmed the finding of the CIT(A) on the issue of treatment of long/short term capital gain as not bogus then, the consequent addition made by the AO rightly deleted by the CIT(A) and accordingly ground no. 2 raised by the revenue is also dismissed.