TMI Blog2019 (4) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... ount/ documents. Assessee is not a regular investor in shares. The assessee has failed to furnish the proof of source for the purchase transactions. Thus, the entire transactions are against human probability. Also considering the findings of the Investigation Wing, inquiries conducted in the case of assessee, brokers, operators and the entry providers and the nature of transaction entered into by the assessee the LTCG claimed exempt u/s. 10(38) by the assessee cannot be allowed and the amount received back as sales proceeds on sale of shares was required to be added back towards his taxable income u/s 68. The above amount was deemed as income of the assessee u/s. 68 over and above, the income already declared in ITR during AY 2014-15. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in law and on facts in not appreciating the fact that additions to the income of the assessee were made purely on presumptions on conjecture and surmises and therefore deserve to be deleted. iv) The Ld. CIT(A) has erred in law and on facts in disallowing deduction claimed by the assessee u/s. 10(38) of the Income Tax Act for ₹ 27,20,457/-. The Ld. CIT(A) as well as AO has failed to appreciate that for claiming the benefit of exemption u/s. 10(38) of the Act three requirement needs to be fulfilled. (a) First the share should be held for more than 1 year. (b) Secondly it should be listed and sold on recognised stock exchange and (c) Thirdly on the said sale necessary security transaction tax (STT) has been paid. A peru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued to the assessee on various dates and again notice u/s. 142(1) issued for hearing on 27.5.2016. In compliance to the same the A.R. for the assessee appeared from time to time and furnished the information called for. During the year under consideration, the assessee has declared income earned from Long Term Capital Gain of ₹ 27,20,457/- on sale of shares during the year which has been claimed exempt u/s. 10(38) of the Act. AO held that the transactions was bogus or sham and nothing but a racket of accommodation entries, by way of long term capital gain exempt from tax, the amount of capital gains of ₹ 27,20,457/- claimed as LTCG exempt from tax was held to be not genuine and addition as made of the total cash credit of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stock exchange and necessary STT has been paid to Govt. Treasury and therefore the exemption u/s. 10(38) of the Act cannot be denied in the circumstances of the case. Hence, he requested to cancel the orders of the authorities below and allow the appeal of the assessee. In support of his contention, he filed a Paper Book containing pages 1 to 91 in which he has attached the copy of written submissions/arguments; show cause notice dated 19.12.2016 issued by the AO; reply dated 26.12.2016 of the assessee to the shows cause notice dated 19.12.2016; copy of the bank statement of Axis Bank, East Patel Nagar, New Delhi; copy of judgment of High Court of Gujarat in case of CIT vs. Himani M. Valik (2013) 10 taxmann.com 326 (Gujarat); copy of judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility. He further stated that the case laws relied upon by the AO as well as Ld. CIT(A) may be read as his arguments including the decision of the Hon ble Supreme Court of India in the case of Mc Dowell and Company Limited, 154 ITR 148. 5. I have heard both the parties and perused the records especially the impugned order. I find that the assessee is an individual and the amount of cash credit ₹ 27,68,457/-. However, on perusing the assessment order, I find that there was a specific information that assessee has indulged in non-genuine and bogus capital gain obtained from the transactions of purchase and sale of shares of M/s Kappac Pharma Ltd., a Mumbai based company. It is noticed that the purchase transaction has been done off m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd any colourable devices cannot be part of tax planning and it is wrong to encourage or entertain the belief that it is honourable to avoid the payment of tax by dubious methods. However, the case laws cited by the Ld. counsel for the assessee are on distinguished facts, hence, not applicable in the instant case. The assessee has not raised any legal ground and argued only on merit for which assessee has failed to substantiate his claim before the lower revenue authorities as well as before this Bench. In view of above discussions, I am of the considered opinion that Ld. CIT(A) has rightly confirmed the addition in dispute, which does not need any interference on my part, therefore, I uphold the action of the Ld. CIT(A) on the issue in dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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