2025 (7) TMI 24 - AT - Income Tax

Addition u/s 68 - bogus LTCG on shares - onus to prove - denial of exemption u/s 10(38) - period of holding of shares - HELD THAT -Admittedly the Assessee held such shares for a period of more than 27 months and in order to substantiate its claim u/s. 10(38) of the Act filed relevant documents such as (i) Contract note-cum-purchase bills (ii) Confirmation of SEBI registered stock broker M/s. IIFL Securities (iii) Bank Statements showing making of payment purchase of shares (iv) D-mat statement (v) Balance sheet of earlier years and other relevant documents etc. and therefore in our considered view the Assessee has duly discharged the onus cast on him u/s. 68 of the Act. Even otherwise neither any allegations were leveled against the Assessee or its stock broker nor any preventive or penal action has been taken by the SEBI or other agency. Both the authorities below have not attributed any specific role to the Assessee qua rigging of the share prices but in fact on the basis of investigation carried out by the Directorate of Investigation of Bombay and Kolkata and general allegation made the additions u/s. 68 on account of sale proceeds of the shares and on account of commission paid on arranged capital gain without being corroborated by any evidence. Admittedly the transactions of purchase and sale of shares involved in the instant case have been carried out through online platform i.e. Bombay Stock Exchange and banking channels. Assessee has duly discharged the onus cast u/s. 68 of the Act the additions be deleted. Assessee appeal allowed.

Summary

The Appellate Tribunal (ITAT Mumbai) allowed the Assessee's appeal against the order of the National Faceless Appeal Centre under section 250 of the Income Tax Act, 1961, for AY 2013-14. The Assessee purchased 25,000 shares of M/s. Unisys Softwares & Holdings Ltd. and sold them after more than 27 months, claiming exemption of long-term capital gains under section 10(38). The authorities below disallowed the claim and made additions under section 68 on the sale proceeds and commission paid, based on general allegations and investigation reports, without specific evidence against the Assessee.The Tribunal held that the Assessee had "duly discharged the onus cast on him u/s. 68 of the Act" by submitting contract notes, broker confirmations, bank statements, D-mat statements, and other relevant documents. No allegations or penal actions were taken by SEBI or other agencies against the Assessee or its broker, and the transactions were conducted through recognized online platforms and banking channels. Therefore, the additions were "un-sustainable" and were deleted. The appeal was allowed accordingly.