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2019 (8) TMI 610 - AT - Income TaxBogus LTCG - bogus accommodation entry - statement of witness relied upon - AO has not disputed part sale of same share on which short term capital gain was offered to tax by the assessee - HELD THAT:- We further note that this is not a case of purchase of penny stock of a company and within a short period there is an unprecedented hike in the sale price of the shares, but in case the assessee purchased the shares of unlisted company which was subsequently amalgamated with a listed company and, therefore, the value of the amalgamated entity is certainly very higher than the value of share of unlisted company though there can be a question about the sweep ratio of the shares. However, the same has not been doubted by any authority and the scheme of amalgamation was duly approved by the Hon’ble High Court. Thus there is an extraordinary event in this case of amalgamation of unlisted company with a listed company and consequently there is a sudden increase in the price of the shares of amalgamated entity. As held in Shri Pramod Jain vs. DCIT [2018 (2) TMI 300 - ITAT JAIPUR] addition made by the AO based on mere suspicion and surmises without any cogent material to show that the assessee has brought back his unaccounted income in the shape of long term capital gain. On the other hand, the assessee has brought all the relevant material to substantiate its claim that transactions of the purchase and sale of shares are genuine. Even otherwise the holding of the shares by the assessee at the time of allotment subsequent to the amalgamation/merger is not in doubt, therefore, the transaction cannot be held as bogus. Thus when the assessee has produced all the supporting evidences which has not been controverted or disputed by the AO, then we do not find any error or illegality in the order of the ld. CIT (A) qua this issue. - Decided in favour of assessee.
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