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2019 (4) TMI 543 - AT - Income TaxAddition u/s 68 - bogus LTCG - off market purchase in physical form by paying cash - assessee has indulged in non-genuine and bogus capital gain obtained from the transactions of purchase and sale of shares - HELD THAT:- It is noticed that the purchase transaction has been done off market in physical form by paying cash. The assessee has purchased the share M/s Kappac Pharma Ltd. in physical form and thereafter, the same have been converted into electronic mode. The purchase payments were made in cash and not through the normal banking channel therefore the same were non-verifiable from the authentic supporting details such as bank account/ documents. Assessee is not a regular investor in shares. The assessee has failed to furnish the proof of source for the purchase transactions. Thus, the entire transactions are against human probability. Also considering the findings of the Investigation Wing, inquiries conducted in the case of assessee, brokers, operators and the entry providers and the nature of transaction entered into by the assessee the LTCG claimed exempt u/s. 10(38) by the assessee cannot be allowed and the amount received back as sales proceeds on sale of shares was required to be added back towards his taxable income u/s 68. The above amount was deemed as income of the assessee u/s. 68 over and above, the income already declared in ITR during AY 2014-15. Landmark decision in the case of McDowell and Company Limited [1985 (4) TMI 64 - SUPREME COURT] is squarely applicable in this case wherein it has been held that tax planning may be legitimate provided it is within the framework of the law and any colourable devices cannot be part of tax planning and it is wrong to encourage or entertain the belief that it is honourable to avoid the payment of tax by dubious methods. However, the case laws cited by the Ld. counsel for the assessee are on distinguished facts, hence, not applicable in the instant case. The assessee has not raised any legal ground and argued only on merit for which assessee has failed to substantiate his claim before the lower revenue authorities as well as before this Bench. - decided against assessee.
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