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2017 (11) TMI 193 - AT - Income TaxTreatment to speculation profit as unexplained cash credit under section 68 - Held that:- There was no enquiry made by the Assessing Officer in the said case directly with the concerned Stock Exchange which clearly revealed that the relevant transactions were not done through the Stock Exchange as claimed by the assessee on the basis of Contract Notes issued by the broker. In the present case, such enquiry was made by the Assessing Officer, which clearly revealed that not only the assessee but even the concerned broker was never active on the Stock Exchange. It also revealed that the said broker was indulging in issuing fraudulent Contract Notes which resulted into his expulsion from the membership of the Exchange from 15th May, 2013. As find myself in agreement with the CIT(Appeals) that the genuineness of the assessee’s claim of having earned the speculation profit of ₹ 3,00,905/- was not established and the Assessing Officer, therefore, was fully justified in treating the said amount as unexplained cash credit under section 68 chargeable to tax at the flat rate of 30%. Therefore, uphold the impugned order of the ld. CIT(Appeals) on this issue and dismiss Ground No. 1 of the assessee’s appeal. Claim for short-term capital loss - Held that:- As observed that the shares were purchased by the assessee at ₹ 10/- per share on 01.11.2012 and there is nothing brought on record by the Assessing Officer to show that the fair market value of the said shares as on the date of purchase by the assessee was different from the purchase price shown by the assessee. As regards the allegation of the Assessing Officer that there was no monetary involvement in the transactions in question, the assessee has placed on record the copies of current accounts of the concerned family members as appearing in the books of account of the assessee at page nos. 27 & 28 of his paper book to show that there were substantial monetary transactions between the parties against which the value of share transactions in question was adjusted. Having regard to all these facts of the case, I am of the view that the action of the Assessing Officer in disallowing the short-term capital as claimed by the assessee by doubting the genuineness of the relevant share transaction was not well founded and the ld. CIT(Appeals) was not justified in upholding the said action of the Assessing Officer. Therefore, set aside the impugned order of the ld. CIT(Appeals) on this issue and direct the Assessing Officer to allow the claim of the assessee for short-term capital loss of ₹ 1,00,000/-. Ground No. 2 of the assessee’s appeal is accordingly allowed.
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