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2018 (7) TMI 821 - ITAT HYDERABADReopening of assessment - Benefit u/s. 10(38) denied - Held that:- Assessee has furnished the information with reference to purchase of shares [though in cash] which was accepted by the AO in the re-opening proceedings in the AY. 2006-07, and evidence of subsequent sale during the year, receipt of sale consideration through bank accounts and further there is no dispute with reference to the sale of shares through the stock exchange as confirmed by the NSDL (in the communication to the AO extracted above) we are of the opinion that Revenue has failed to establish that the transactions are bogus. Since assessee’s claim for exemption in Long Term Capital Gain is supported by the documents including the transaction in DMAT account and sales through the stock exchange, the claim u/s. 10(38) of the Act cannot be denied, based on the assumptions and presumptions which are not supported by any evidence. In view of that the grounds raised by assessee on merits are allowed. AO is directed to treat the gains as such and allow the benefit u/s. 10(38). Since we have considered the issue on merits, the contentions raised on reopening of assessment becomes academic. Moreover, Ld.CIT(A) has considered this aspect elaborately and has held that there is same information. Since the assessment has not been done u/s. 143(3) earlier and only return has been accepted u/s. 143(1), in our view the AO has correctly initiated the reopening proceedings. The statement relied was u/s 131 so the question of initiation of proceedings u/s 153C also does not arise. To that extent, the order of CIT(A) is confirmed. The contentions of assessee on reopening are not considered valid. However, as Revenue failed to establish that the transactions undertaken by assessee are bogus on merits, we agree with the contentions of assessee that the transactions are undertaken in the normal course and assessee is entitled for the deductions / exemptions so claimed. Appeal of assessee is partly allowed.
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