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2021 (2) TMI 1180 - AT - Income TaxBogus LTCG - denial of exemption u/s. 10(38) of the Act which the assessee had earned on the sale of equity shares after holding them for more than a year - HELD THAT:- Assessee had paid service tax and STT and shares were sold through screen based transactions wherein the exact time and order numbers are mentioned. From the Demat statement, we further observe that assessee was holding certain other scrips also. The assessee, therefore, had filed sufficient evidences to prove the genuineness of the transactions but authorities below has rejected the claim of the assessee on the basis of an investigation report of the Department whereby the scrip was held to be penny stock which was being used for providing bogus long term gains. Hon'ble Delhi High Court [2021 (1) TMI 1008 - DELHI HIGH COURT] startling spike in the share price and other factors may be enough to show circumstances that might create suspicion but the Court has to decide an issue on the basis of evidence and proof, and not on suspicion alone. The Hon'ble court further distinguished the judgment in the case of Suman Podar which was in favour of Revenue. The Hon'ble court further held that case of Sumati Dayal u/s CIT was also not applicable to the assessee. The Hon'ble court further held that reliance placed by the Assessing Officer on the investigation report of Investigation Wing without further corroboration on the basis of cogent material does not justify his conclusion that the transaction is bogus, sham and nothing other than a racket of accommodation entries. - Decided in favour of assessee.
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