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2019 (11) TMI 409 - AT - Income TaxLong Term Capital Gain - denial exemption u/sec 10(38) - penny sock - HELD THAT:- Foundation of doubt as laid by the AO which made him to enquire into the details of transactions of purchase and sale of shares of LD&PL, finding the same as bogus led to denial of exemption u/s.10(38) of the Act. We find when there was no business operation of LD&PL during the period of purchase and sale of shares and astronomical increase of share price of LD&PL which led to returns at 350%, in our opinion, is unjustified. The assessee failed to controvert and put forth any evidence rebutting the investigation report DDIT, Kolkata showing the transactions of purchase and sale of shares are genuine. The suspension imposed by the Bombay Stock Exchange on trading of LD&PL shares from 28-08-2015 is still in force. Therefore, we hold that the assessee is the beneficiary of bogus transactions by accommodation entries provided by the Jamakharchi companies i.e LD&PL, DTPL and brokers KORP SL and GFSL through multiple layering of transactions, in view of the discussion made by us hereinabove, in the facts and circumstances of the case and the decisions relied upon, that the assessee is not entitled to claim exemption u/s.10(38) of the Act. We find no infirmity in the order of CIT(A) and it is justified - Decided against assessee Addition made on account of commission charged - AO on an examination found a commission @ 5% has was paid for arranging capital gain as payment of such a commission is a common practice - HELD THAT:- In view of the fact that we have countenanced the conclusion of the authorities below in treating the long term capital gain from transfer of shares as bogus, the sequitur is that the assessee did pay commission for arranging the bogus capital gain. However, considering the totality of the facts and circumstances of the instant case, we are of the considered view that the rate of commission be reduced to 2% instead of 5%. Thus, ground No.8 raised by the assessee is partly allowed. Addition made on account of set off of interest against professional fee - HELD THAT:- No evidence whatsoever put forth by the Ld. AR showing the said ₹ 24,00,000/- is a professional receipt from M/s. Sagar Paridhan Pvt. Ltd. Admittedly, the assessee is a Director of said M/s. Sagar Paridhan Pvt. Ltd. In the immediately preceding year also, similar amount was treated by the assessee as Salary and offered as such. In view of the same, we hold that the authorities below were right in treating the amount of receipt as chargeable to tax under the head `Salaries’ and consequently, not allowing the set off of interest of ₹ 5,09,800/-. Thus, the ground No.9 raised by the assessee fails and it is dismissed.
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