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2023 (12) TMI 21 - AT - Income TaxBogus LTCG - addition u/s 68 - income arising from sale of shares which was claimed to be exempt by the Assessee denied - addition made on the basis of the report of the Investigation Wing, Kolkata and analysis of price and volume movement - AO had concluded that the investment made in purchase of shares of the Company by the Assessee was substantial and therefore, it cannot be accepted that it was a regular transaction - HELD THAT:- As nothing has been brought on record by the Assessing Officer to support the conclusion in respect of the transaction undertaken by the Assessee. The addition has been made on the basis of conjecture and surmises. AO has failed to point out any defect or infirmity in the documents/explanation given by the Assessee. The Assessment Order is silent about the brokers and exit providers involved. There is no reference to any inquiry having been conducted by the AO. There is no direct evidence or circumstantial evidence to support the conclusions drawn by the AO. There is not even any allegation that the Assessee had any unaccounted income or any undisclosed source of income. Facts as emanating from material on record demonstrate that the conduct of the Assessee in the present case does not fit into the ‘modus operandi’ as stated in the report of Investigation Wing, Kolkata. Assessee has offered to tax Short Term Capital Gains and speculative profit earned on 25/07/2007 earned on sale of Share of the Company in the return for the Assessment Year 2008-09. The aforesaid gains/profits were accepted without questioning the genuineness of the transactions. During the course of hearing that the Learned Authorised Representative stated that 34,401 shares of the Company are lying unsold till date. This was not disputed by the Revenue. As pointed out by the Learned Authorised Representative, in case the cost of the shares held is written off, then the short terms capital gains offered to tax would be more than overall profits made from purchase/sale of shares of the Company by the Assessee. Thus we hold that addition made by AO u/s 68 of the Act cannot be sustained. A number of judicial precedents have been referred to by the AO and the CIT(A). However, in absence of the factual support/basis, the same cannot be invoked to draw any adverse conclusion against the Assessee. As observed in the case of Krishna Devi [2021 (1) TMI 1008 - DELHI HIGH COURT] the theory of human behaviour and preponderance of probabilities cannot be cited as a basis to turn a blind eye to the evidence produced by an Assessee. Decided in favour of assessee.
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