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2018 (11) TMI 1626 - AT - Income TaxBogus LTCG - Denial of exemption u/s.10(38) - penny stock transactions - Long Term Capital Gains in respect of the sale of the shares - HELD THAT:- A perusal of assessee's case shows that it is similar to the facts in the case of Shri Heerachand Kanunga [2018 (6) TMI 1329 - ITAT CHENNAI] wherein held that statement given by Shri Ashok Kumar Kayan cannot be the foundation for the purpose of assessment in so far as Shri Ashok Kumar Kayan has not been provided to the assessee for cross-examination. In the absence of opportunity of cross-examination, the statement remains mere information and such information cannot be foundation for assessment. Assessee in good faith has purchased the shares of M/s.BPL from a sub-broker in his friends circle. What is the true nature of the transaction? From whom did the assessee actually purchase the shares? Did the assessee take possession of the shares in its physical form? - the assessee is an investor and has been regularly trading in shares. If this is so, does the demat account show such transactions being done by the assessee or is this the only one of transaction. Thus, clearly the facts required for adjudicating the appeals are not forthcoming - we are of the view that the issues in this appeal must be restored to the file of the AO for re-adjudication after granting the assessee adequate opportunity to substantiate its case and we do so. - Decided in favour of assessee for statistical purposes.
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