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2022 (7) TMI 174 - AT - Income TaxBogus LTCG - exemption u/s.10(38) denied - as per AO assessee failed to prove the genuineness of the transactions except for the document produced - CIT (A) upholding the action of the AO in treating the long term capital gain as “income from other sources” and applying the provisions of section 115BBE - HELD THAT:- It is an admitted fact that the assessee in the original return of income had claimed the exemption u/s 10(38) on account of sale of 70000 shares of Jackson Investment Ltd. As find during the course of search when it was noticed that the assessee had used the stock exchange mechanism for routing unaccounted money by using scrips of the company, which is a penny stock company, the assessee submitted a letter withdrawing the LTCG claim u/s 10(38) and offered the same as income. Therefore, once the assessee had withdrawn her claim, now the assessee cannot claim the same as long term capital gain and the income in my opinion has to be treated as “income from other sources”. If the contention of the learned Counsel for the assessee that the same is to be allowed as LTCG is accepted, then the natural corollary will be to allow the same as exempt u/s 10(38) of the I.T. Act and the very nature of the declaration will be defeated. Arguments of assessee that the AO cannot change the head of income is concerned, the same also is without any force especially when the assessee withdrew her claim of exemption u/s 10(38) and offered the same as income of the assessee. So far as the various decisions relied upon by the learned Counsel for the assessee are concerned, the same in my opinion are distinguishable and not applicable to the facts of the present case especially when the assessee in the instant case has herself withdrew the claim and accepted the income from sale of shares of the penny stock company as her income. Alternate argument of the assessee that the same should be added u/s 68 of the Act and the provisions of section 115BBE should not be attracted the same in my opinion, is without any force. The Assessing Officer as well as the learned CIT (A) in this case has correctly applied the provisions of section 115BBE of the I.T. Act. Therefore, the alternate contention of the learned Counsel for the assessee does not have any force and accordingly, the same is dismissed. - Decided against assessee.
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