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2019 (8) TMI 700 - AT - Income TaxBogus LTCG/LTCL - gain derived from sale of shares held in various scrips - treating the impugned STCL pre-arranged bogus loss - HELD THAT:- Identical action holding the assessee’s STCL as bogus since derived from rigging of the scrip prices in issue and involving accommodation entry in collusion with the concerned entry operators. Hon'ble apex court’s decisions in Sumati Dayal vs. CIT [1995 (3) TMI 3 - SUPREME COURT] and CIT vs. Durga Prasad More [1971 (8) TMI 17 - SUPREME COURT] are quoted during the course of hearing at the Revenue’s behest. It strongly argues that the department has disallowed/added the impugned STCL based on circumstantial evidence unearthed after a series of search actions / investigations undertaken by the DDIT(Inv). Find no merit in Revenue’s instant arguments. The fact remains that the assessee has duly placed on record the relevant contract notes, share certificate(s), detailed corroborative documentary evidence indicating purchase / sale of shares through registered brokers by banking channel, demat statements etc., The Revenue’s only case as per its pleadings and both the lower authorities unanimously conclusion that there is very strong circumstantial evidence against the assessee suggesting bogus STCL accommodation entries. I find that there is not even a single case which could pin-point any making against these assessees which could be taken as a revenue nexus. CBDT’s circular dated 10.03.2003 has itself made it clear that mere search statements in the nature of admission in absence of supportive material do not carry weight. I notice that this tribunal’s coordinate bench’s decision in Mahavir Jhanwar vs. ITO [2019 (3) TMI 210 - ITAT KOLKATA] has taken into consideration identical facts and circumstances as well as latest developments on legal side whilst deleting the similar bogus LTCG addition Coupled with this, hon'ble jurisdictional high court’s other decisions in CIT vs. Rungta Properties Pvt. Ltd. [2017 (6) TMI 521 - CALCUTTA HIGH COURT] to hold such transactions in scrips supported by the corresponding relevant evidence to be genuine. Assessee had filed all of her detailed evidence during scrutiny. The Assessing Officer’s show cause notice(s) u/s. 142(1)/143(2) of the Act nowhere sought to treat the impugned profits as bogus. I adopt the above extracted reasoning mutatis mutandis therefore to delete the impugned STCL disallowance / addition of ₹ 36,48,564/-. Unexplained commission expenditure disallowance, if any shall automatically follow suit as a necessary corollary. No other argument or ground has been agitated before me during the course of hearing. - Decided in favour of assessee.
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