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2018 (2) TMI 2087 - AT - Income TaxBogus LTCG - claim of exemption U/s.10(38) on the long term capital gains earned by the assessee from the sale of shares rejected - HELD THAT:- When the transactions are routed through banking channels and the identity of the seller and the purchasers are established and when the transactions are covered through contract notes, demat accounts which shows transfer in and out of shares then there is no necessity to doubt the genuineness of the transactions. From the above it is apparent that the decisions relied by the Ld. Revenue Authorities will not be strictly applicable to the case of the assessee and the decisions cited by the assessee are in support of the claim of the assessee. We do understand the genuine anxiety of the Revenue to tax the assessee due to the various unnatural happening of events, but as a Judicial body our hands are tied due to the lack of material evidence against the activities of the assessee and we cannot step into the shoes of the Revenue by making further investigations and enquiries to tie up the loose ends left out by the Revenue. From the materials produced before us there is nothing on record to establish that the transactions of purchase and sale of shares made by the assessee are dubious other than the fact that the share prices of M/s. PFL Infotech Ltd., rose substantially without sound backing and the statements of few persons such as Shri Aspi Bamanji Vairava, Shri Pankaj Kumar K Shah & Shri Dipti P Shah. At the same time it should be kept in mind that stock prices may raise due to certain hidden factors which may be not known to the public at large even with respect to blue chip companies. Hence conclusion cannot be bluntly made on the basis of surmises and conjectures in the case of any assessee when certain other material factors are in favour of the assessee. The Hon’ble Punjab & Haryana High Court in the case CIT vs. Anupam Kapoor [2007 (2) TMI 159 - PUNJAB AND HARYANA HIGH COURT] in a somewhat similar situation has categorically stated that no presumption could be drawn by the Assessing Officer merely on surmises and conjectures. We hereby direct the Ld.AO to delete the addition made by invoking Section 68 of the Act and also to grant deduction U/s.10(38) of the Act by treating the gain arising out of the sale of shares as Long Term Capital Gain. Appeal of assessee allowed.
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