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2019 (1) TMI 1198 - AT - Income TaxAddition u/s 68 - bogus long-term capital gain from the sale of shares - non providing opportunity to cross examine parties relying=g on whom addition is made - Held that:- ssessee produced before the learned Assessing Officer that the documents submitted by him, namely, the contract note dated 18/08/2014 for sale of shares of M/s Unno industries Ltd in BSE through registered stock broker M/s Rudra Shares and Stockbrokers, Bank statement of the assessee from 01/08/2014 to 31/08/2014 and 01st December, 2014 to 31st December 2014 showing that the consideration of sale of shares was received. Confirmation by various trade links private limited on 27th March 2012 and the share bill dated 22nd June, 2011 - would prove the genuineness of the transaction. The identity of the parties is not under cloud and genuineness of the transaction is explained by way of above documents. Learned Assessing Officer never suspected the capacity of the assessee for purchase of the shares. As a matter of fact, the statement of transactions issued by M/s Religare Securities Ltd clearly establishes that the assessee was holding a sizeable portfolio and it is not the stray incident of purchasing one scrip for this purpose only. There is no allegation as to the incorrectness of the documents or manipulation by SEBI or BSE. Hon’ble Apex Court in the case of M/s Andaman Timber Industries vs Commissioner of Central excise [2015 (10) TMI 442 - SUPREME COURT] for the principle that the failure to provide the assessee the right to cross examine the witness whose statement are relied upon, results in breach of principles of natural Justice and is a serious flaw which renders the order a nullity. In this case also an opportunity for the cross examination of the persons, on whose statements the learned AO based his suspicion was not allowed to the assessee, so that the assessee could have defended himself from the allegations, if any, made against him. In these circumstances, mere suspicion of AO does not take the place of legal proof of any bogus transaction. It shall be kept in mind that the assessee held the shares quite for a long time between 22nd of June 2011 till 23re March, 2012 bonus shares were allotted and subsequently deposited them in the demat account on 10/09/2012. We find it difficult to sustain the impugned order. We, accordingly, while agreeing with the contentions of the assessee direct the learned Assessing Officer to delete the addition - Decided in favour of assessee.
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