2022 (1) TMI 1037 - AT - Income Tax

Bogus LTCG - sale of shares in this case is not a natural phenomenon but an arrangement of dubious design of providing accommodation entry - As per DR when the claim of the assessee was rejected u/s. 10(38) of the Act the amount represented by the sale of shares has been rightly added u/s. 69A - additions made by AO on the basis of an investigation conducted by DDIT whereby a racket involving thousands of crores of rupees was unearthed and wherein on the basis of statements recorded by investigation department of certain operators and stock brokers the Revenue had come to the conclusion that various persons were engaged in arranging long term capital gains through the medium of manipulating stock prices - CIT-A deleted the addition on the basis that the stock brokers and the persons from whom the assessee had purchased and sold shares has not been examined by the Assessing Officer and Assessing Officer had made the additions on the basis of general statement of certain persons - HELD THAT:- CIT(A) has held that the Assessing Officer has ignored the various documentary evidences which were in favour of the assessee.

As findings recorded by ld. CIT(A) are quite exhaustive whereby he has discussed the basis on which the Assessing Officer had made the additions. While allowing relief to the assessee, CIT(A) has specifically held that there is no adverse comment in the form of general and specific statement by the Pr. Officer of stock exchange or by the company whose shares were involved in these transactions and he held that Assessing Officer only quoted facts pertaining to various completely unrelated persons whose statement were recorded and on the basis of unfounded presumptions - the name of the appellants were neither quoted by any of such persons nor any material relating to the assessee was found at any place where investigation was done by the investigation Wing.

CIT(A) relying on various orders of Lucknow Benches and other Benches has allowed relief to the assessee by placing reliance on the evidences filed by the assessee before Assessing Officer. Thus find no adversity in the order of ld. CIT(A) specifically keeping in view the fact that Lucknow Benches in a number of cases after relying on the judgment of Hon'ble Delhi High Court in the case of Krishna Devi and others [2021 (1) TMI 1008 - DELHI HIGH COURT] had allowed relief to various assessee - Decided against revenue.