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2014 (4) TMI 238 - HC - Income TaxGenuineness of the Transaction LTCG on sale of shares shares of listing company were purchased in cash - Allowanbility of claim of exemption u/s 54F of the Act - Held that:- The assessee has not been able to prove that the shares were purchased on November 12, 1999, inasmuch as there is no documentary evidence proving the fact inasmuch as the said purchase was made in cash - the assessee has also not been able to show that the shares were listed in the stock market at Rs. 2.50, on the day of purchase, inasmuch as the assessee has produced the quotation of the shares as on the date of sale issued by the Guwahati Stock Exchange but no such quotation on the date of purchase was produced by the assessee. The assessee although has produced documentary evidence to show that shares were sold at a price prevailing in the stock market on the date of sale but no documentary evidence were produced to show that on the date of purchase, the market price of the shares was the same at which the shares were claimed to have been purchased - it cannot be said that the explanation offered by the assessee as regards long-term capital gain was rejected unreasonably and that the finding that the amount was not on account of long-term capital gain is based on no evidence thus, the transaction was bogus and it was simply a sort of modus operandi to convert the undisclosed income into a long-term capital gain claiming the same to be exempted. The AO had not committed any error in rejecting the claim of the assessee and, in fact, applying the test of human probabilities, the AO rightly concluded that the assessee's claim about the amount, being the long term capital gain is not genuine and that the finding arrived at by the AO cannot be said to be a finding, which is not based on no evidence thus, the order of the Tribunal is set aside Decoded in favour of Revenue. Addition of undisclosed source of income - Whether the Tribunal was justified and correct in directing the AO to delete the addition as income from undisclosed source Held that:- The Tribunal rightly held that the assessee had established the identity of the creditor, namely, Venus Hospital Ltd. - The assessee has also discharged its burden, which rested on her, under section 68 of the Act by proving that the amount received by her in cash by the said creditor was duly recorded in the books of account of Venus Hospital Ltd. and the same was examined and verified by the Assessing Officer - The identity of the Venus Hospital has also been established inasmuch as it has filed all relevant documents like income-tax return, balance-sheet, etc. - the identity of the creditor and the genuineness of transaction have been proved. The burden shifted to the AO to prove the contrary - The AO has failed to show either directly or with the help of circumstantial evidence that the amount belonged to the assessee - In the absence of any such evidence on record, more particularly, the identity of the creditor and the genuineness of the transaction in question having been proved the Assessing Officer could not have treated the said amount as income derived from undisclosed sources thus, there was no infirmity in the order of the Tribunal Decided against Revenue. Addition of undisclosed source of income Genuineness of the transaction - Whether the Tribunal was justified and correct in directing the AO to delete the addition as income from undisclosed source from the income Held that:- The identity of creditor, the genuineness of the transaction as well as the creditworthiness of the creditor have been established the Tribunal was justified in deleting the addition made u/s 68 of the Act Decided against Revenue.
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