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2021 (4) TMI 258 - AT - Income TaxBogus LTCG - addition u/s 68 - disallowing long term capital gains exemption claimed under section 10(38) - Share purchases from penny stock company -HELD THAT:- AO merely declared this company to be penny stock company without bringing any evidence on record. Though the A.O. discussed in the assessment order that Investigation Wing as well as SEBI revealed that Shilpi Cable Technologies Ltd., is engaged in scam, but, no details have been brought on record as to how in assessment year under appeal this company was engaged in scam or indulged in price raise in shares. The Ld. D.R. referred to the assessment order in the case of M/s. Renu Proptech Pvt. Ltd., in which it is mentioned that SEBI has suspended the share transactions of this company in the year 2017. But, the assessment year under appeal is A.Y. 2016-2017, therefore, it would have no impact on the transactions carried-out by the assessee in assessment year under appeal. A.O. thereafter did not bring any evidence on record as to how the transaction of the assessee was not genuine. The Ld. CIT(A) considering the details on record found that there is an increase in the turnover and profit of this company and this company has also declared substantial income and paid the taxes also. There were no basis for the A.O. to hold this company to be penny stock company. The Ld. CIT(A) also found that this company has declared dividend to the shareholders as well as have reputed customers. The assessee kept the shares for more than one year and sold the shares through recognized stock exchange on which STT is also paid. The assessee purchased the shares through banking channel as well as sold the shares through online trading platform of NSE. The payment is also received through banking channel. This company is actually engaged in manufacturing and has substantial assets also. No evidence has been brought on record by the A.O. as to how the assessee’s transactions were not genuine. It was also brought on record that assessee is a habitual investor as is evident from the Demat Statement with the Bank. No justification to interfere with the Order of the Ld. CIT(A) in deleting the addition. - Decided in favour of assessee.
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