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2019 (6) TMI 298 - AT - Income TaxBogus LTCG - addition u/s 68 - exemption u/s. 10(38) denied - penny stocks purchases - benami transactions - off market transaction for purchase of shares - HELD THAT:- The assessee has furnished all evidences in support of the claim of the assessee that it earned LTCG on transactions of his investment in shares. The purchase of shares had been accepted by the AO in the year of its acquisition and thereafter until the same were sold. The off market transaction for purchase of shares is not illegal as was held by the decision of Co-ordinate Bench of this Tribunal in the case of Dolarrai Hemani vs. ITO [2016 (12) TMI 1074 - ITAT KOLKATA] and BLB CABLES AND CONDUCTORS PVT. LTD. [2018 (8) TMI 525 - CALCUTTA HIGH COURT] The transactions were all through account payee cheques and reflected in the books of accounts. The purchase of shares and the sale of shares were also reflected in Demat account statements. The sale of shares suffered STT, brokerage etc. In the facts and circumstances of the case, it cannot be held that the transactions were bogus. We note that since the purchase and sale transactions are supported and evidenced by Bills, Contract Notes, Demat statements and bank statements etc., and when the transactions of purchase of shares were accepted by the ld AO in earlier years, the same could not be treated as bogus simply on the basis of some reports of the Investigation Wing and/or the orders of SEBI and/or the statements of third parties. Thus we set aside the order of CIT(A) and direct the AO not to treat the long term capital as bogus and delete the consequential addition. - Decided in favour of assessee. Unexplained expenditure towards commission charges of sale of such shares by the operator - HELD THAT:- The transactions relating to LTCG were genuine and not the accommodation entries as alleged by the AO. Consequently the addition is hereby directed to be deleted. We accordingly hold that the issue is allowed in favour of the assessee.
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