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2018 (11) TMI 261 - AT - Income TaxUnexplained cash credit u/s 68 - Bogus LTCG - addition of sale proceeds of the shares as undisclosed income - assessee introduced unaccounted money by way of bogus LTCG - exemption u/s 10(38) denied - addition of commission - Held that:- We note that in the absence of material/evidence the allegations that the assessee/brokers got involved in price rigging/manipulation of shares must therefore also fail. At the cost of repetition, we note that the assessee had furnished all relevant evidence in the form of bills, contract notes, demat statement and bank account to prove the genuineness of the transactions relevant to the purchase and sale of shares resulting in long term capital gain. These evidences were neither found by the AO nor by the ld. CIT(A) to be false or fictitious or bogus. The facts of the case and the evidence in support of the evidence clearly support the claim of the assessee that the transactions of the assessee were genuine and the authorities below was not justified in rejecting the claim of the assessee that income from LTCG is exempted u/s 10(38) of the Act - Decided in favour of assessee. CIT(A) was not justified in upholding the addition of sale proceeds of the shares as undisclosed income of the assessee u/s 68 of the Act. We note that though the department was aware that the assessee had purchased the 25000 shares of M/s. NFGL in AY 2013-14, for ₹ 32,21,269/- has not reduced the same from the total sale consideration of ₹ 2.16 cr. It is elementary that income can be computed only after defraying the cost. So the action of AO to add the entire sale consideration of ₹ 2.16 cr. itself is arbitrary exercise of power and cannot be sustained. Therefore, the action of the Ld. CIT(A) in confirming the addition of entire sale consideration of M/s. NFGL is perverse and is directed to be deleted. Consequently, the addition of 5% as commission to the tune of ₹ 10,82,460/- cannot be also sustained and ordered to be deleted. - Decided in favour of assessee.
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