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2024 (2) TMI 531 - ITAT DELHIBogus LTCG - exemption u/s. 10 (38) denied - addition u/s 68 as relying upon the interim order of the SEBI - Based upon the investigation report of Pr. DIT, Investigation Wing Kolkata unit the AO formed a belief that the said company is a penny stock company and heavily drawing support from the investigation report - HELD THAT:- We find that the very same AO has framed the assessment of the brother of the assessee Sh. Mukesh Mittal who claimed LTCG on sale of shares of the very same company Radford Global Limited. In the case of the brother the quarrel travelled upto the Tribunal and this Tribunal in Sh. Mukesh Mittal Versus Income tax Officer, Ward-41 (1) , New Delhi [2021 (3) TMI 1169 - ITAT DELHI] held that assessee submitted sufficient documentary evidences before A.O. to prove genuineness of the transaction. The assessee purchased the shares through banking channel and actually got the shares transferred in his name. The purchases are supported by bank statements. The transaction of the sale have been made through Demat Account which is corroborated by contract note and other details and transaction is carried out through banking channel through stock exchange through Demat Account on which Security Transaction Tax have also been paid. The A.O. merely relied upon interim order of the SEBI to make addition against the assessee, otherwise, there were no evidence or material on record to disprove the claim of assessee. Since the interim order of the SEBI have been revoked against the assessee and M/s EBFL, therefore, nothing survives in favour of the A.O. The A.O. did not make any further investigation or enquiry into the matter and merely relied upon the interim order of the SEBI and investigation carried out by the Kolkata Wing. It is not clear from the assessment order whether Investigation Wing report have been confronted to the assessee or any right of cross-examination have been allowed to any statement recorded at the back of the assessee. The assessee asked for the cross-examination of any statement which is used against the assessee for making the addition. But, the assessment order is silent on this aspect. Therefore, the above facts clearly show that assessee entered into the genuine transaction and as such the profit on sale of scrip was exempt from tax. Assessee has successfully discharged the onus cast upon him by the provisions of section 68 of the Act and such discharge is purely a question of fact. We, accordingly, direct the AO to accept the long term capital gain declared as such and allow exemption u/s. 10 (38) of the Act -we delete the impugned addition made on account of unexplained cash credits u/s. 68 - Decided in favour of assessee.
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