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2023 (5) TMI 876 - AT - Income TaxBogus LTCG - Disallowance on claim of exemption u/s. 10(38) of LTCG - penny stock transactions - HELD THAT:- AO stated that though the transaction undertaken by the assessee may seen to fulfil the legal requirement of section 10(38) same are sham transactions as the share prices of M/s. HPC Biosciences Limited were manipulated to raise the same exponentially. The price rise of the penny stock scrip was abrupt, sudden and unrealistic. No cogent material has been brought by the assessee on record to rebut the above finding of the AO. We may refer the observations of SEBI vs. Kishore Ajmera [2016 (2) TMI 723 - SUPREME COURT] that it is the judicial duty to take note of the immediate and proximate facts and circumstances surrounding the events on which the charges/allegations are founded and to reach what would appear to be reasonable conclusion therefrom. No hesitation at all in holding that the AO/CIT(A) were perfectly justified in treating the impugned transactions as sham and discarding the assessee’s explanation as not satisfactory. We concur with their findings that the assessee failed to discharge the onus cast upon her u/s 68 - addition is sustained and the assessee’s ground of disallowance of exemption u/s 10(38) on long term capital gain is hereby rejected. Addition u/s 69C - year of assessment - HELD THAT:- The transaction pertained to AY 2013-14 and not AY 2015-16 which is the year under our consideration. We are, therefore, of the opinion that the impugned addition cannot be made u/s 69C of the Act in AY 2015-16. We, therefore, set aside the order of the Ld. AO/CIT(A) on the point and delete the addition - We decide ground in favour of the assessee.
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