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2021 (5) TMI 217 - AT - Income TaxBogus LTCG - disallowance of exemption claimed by assessee u/s 10(38) on account of LTCG - assessee submits that it is to be noted that the additions in this case is not based on investigation report of either income tax department or other authority or on the statement of entry provider - HELD THAT:- The conclusion drawn by ld CIT(A) is based on mare presumption. In our view, once it is accepted by the assessing officer in his remand report that all the transaction of the assessee that is contract notice/ledger accounts furnished by assessee are matching with the data furnished by the Stock Exchange. And the ld. CIT(A) the also took his view that the basis for making the addition did not survive, the additions cannot be sustained. The ld. CIT(A) sustained the additions merely on the basis of suspicion. There is no evidence on record to suggest that the assessee has availed accommodation entry or beneficiary of penny stock. So far as the allegation of the assessing officer in his second report dated 28.02.2018 is with regards to ban on trading of Bharat Bachubhai Merchant, Director of Nimbus Industries Ltd., by SEBI vide its order dated 30.09.2012 for market manipulation during the Initial Public Offering (IPO) of P. G. Electroplast Ltd., and M. R. Shah, Director of Regency Trust Ltd is concerned, the assessee has purchased shares much prior to the orders of SEBI. Moreover, there is no live link in the order of SEBI about the transactions of shares of assessee under scrutiny, so such order cannot be read against the assessee in absence of ant corroborative evidence. In fact there is no evidence on record that the assessee made any prearranged transactions. Thus, we do not find merit in the order of ld. CIT(A) in sustaining the additions on mere probability. The Hon’ble Supreme Court in Umacharan Shah & brothers Vs CIT [1959 (5) TMI 11 - SUPREME COURT] held that suspicion howsoever strong, may be cannot substitute the place of evidence. Also held in OMAR SALAY MOHAMED SAIT VERSUS COMMISSIONER OF INCOME-TAX, MADRAS [1959 (3) TMI 2 - SUPREME COURT]that no additions can be made on the basis of surmises, suspicion and conjecture. - Decided in favour of assessee. Exemption under section 10(2A) - assessee submits that the assessing officer has not allowed the exemption under section 10(2A) in respect of share of profit from the Firm namely ‘Desai Gas Agency’, in which the assessee is one of the partner - HELD THAT:- We have seen that the assessee in the computation of income has claimed exempt income of ₹ 1,66,406/- is allowable as exempted under section 10(2A), being income of share received from Firm ‘Desai Gas Agency’. The assessing officer instead of examining the facts and the evidences furnished by the assessee clubbed this income with the exempted LTCG claimed by the assessee. CIT(A) also ignored the similar facts and upheld the action of assessing officer. We have seen that the amount of ₹ 1,66,406/- is separate and independent income component, earned by the assessee which is claimed as exempted under section 10(2A). Further we have seen that the assessee has furnished all details particulars of the Firm including the return of income of Firm, details of partners, their PAN, and Circle of assessment of partners. After considering the documentary evidences furnished by the assessee, we find that all the evidences filed by the assessee are in order and that the assessee has earned exempted income of ₹ 1,66,406/-, form the profit of Firm, which is allowable as exempt income under section 10(2A) of the Act - we direct the Assessing Officer to allow full relief to the assessee.
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