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2019 (5) TMI 1670 - AT - Income TaxBogus LTCG - denial of exemption u/s 10(38) - unexplained cash credit u/s 68 - as per assessee transaction was done through the Registered Stock Exchange Broker only and payment was made through proper banking channel - HELD THAT:- SEBI has given a clean chit to the company and has freed it from the allegation of market rigging. Therefore, the allegation of the AO itself becomes infructuous - assessee had also requested for an opportunity to cross examine Sri Sunil Dokania, whose statement has been relied on by the AO for making the addition. AO did not provide any opportunity for cross examine, the so-called operators. It is well established law that no adverse view can be taken against an assessee, on the basis of statement recorded by department of any person without providing copy of the statement to the assessee and also without providing opportunity for cross examination of the said person. Assessee had never entered into any transaction with Sri Sunil Dokania, against whom investigation wing had allegedly made inquiry. We also note that in the extracts of the statement of Sri Sunil Dokania given in the Show Cause notice, it is nowhere mentioned that the alleged person has provided any entry to the assessee directly. When the transactions were as per norms prescribed by SEBI and concerned stock exchange and suffered STT,brokerage, service tax, and cess. There is no iota of evidence over thetransactions as it were reflected in demat account. AO did not doubt the genuineness of the documents submitted by assessee. Theld AO failed to bring on record any evidence to suggestthat the sale of shares by the Assessee were not genuine. The assessee produced the contract notes, details of demataccounts and produced documents showing all payments were received bythe assessee through banks. In these circumstances, the long term capital gain (LTCG) earned by the assessee should not be treated as bogus - Decided in favour of assessee Unexplained expenditure towards commission charges of sale of such shares by the operator - HELD THAT:- As already held that the transactions relating to LTCG were genuine and not the accommodation entries as alleged by the AO. Consequently, the addition is hereby directed to be deleted. We accordingly hold that the issue is allowed in favour of the assessee.
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