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2018 (8) TMI 1759 - AT - Income TaxDisallowing long term capital gain treating the same as unexplained cash credit u/s 68 - denial of natural justice - denying opportunity of being heard to the assessee - Held that:- AO has botched up the enquiry by denying opportunity of being heard to the assessee who has not been allowed to cross examine the witnesses. AO has also not enquired from the Stock Exchange so as to work out if by applying the rule of circuit breaker the appreciation in shares to the tune of 29 times or 40 times in a short period is feasible, rather AO has merely relied upon report of Investigation Wing. No doubt, SEBI has not drawn any adverse inference in case of Unnao Industries Ltd. company but that report is against the company and not the individual who have been instrumental in getting the transactions in question matured, but AO has also not associated any of the brokers involved in the transactions of shares purchased by the assessee and subsequent sale thereof. AO has based the assessment order on preponderance of probabilities by relying upon circumstantial evidence by entirely ignoring direct evidence available in this case. AO has also not made enquiry from the father of the assessee who was Financial Adviser for the sale and purchase of the shares in question by the assessee as disclosed in the statement extracted in the assessment order. AO has also ignored the fact that there cannot be more than 5% increase in the value of shares in a day as per circuit breaker rule - set aside to the AO to decide afresh by providing an opportunity of being heard to the assessee in the light of the observations made herein above. - Decided in favour of assessee for statistical purposes.
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