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TMI Blog2024 (6) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... e capital market, and (b) That the appellant is one such beneficiary who has taken entry of LTCG; and (c) That whoever, (presuming inclusion of the appellant) benefited from transactions in accordance with the Scheme and has admittedly converted his unaccounted money equal to the sale proceeds of share into white in the guise of exemption under section 10(38) of the Income Tax Act, 1961; and (d) That the onus on the appellant of proving his transaction of purchase and sale as genuine has not been discharged by the appellant; and (e) That the persons involved in the scheme have categorically stated that they were involved in providing accommodation entries (presumably including the appellant without any such material on record) regarding sale and purchase of shares through their companies and therefore the human probabilities have also to be applied to comprehend the transactions and to see the real intention behind entering in the transaction; and (f) That through the transaction, the appellant participated in manipulation of rates of shares with the intention to earn Long Term Capital gain exempt u/s 10(38) during the year under consideration and therefore it is necessar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a blunder on part of Id. CIT (A) to portray it as a penny stock share and impose penny stock narrative to it without application of mind. (iii) The appellant has dealt in many number of listed securities during the relevant year, as per the statement of SBI Cap available with the authorities and therefore the above findings are liable to be ignored in deciding the issue of earning of long term capital gain on sale of shares, which are exempt under section 10(38) of the Act, being fulfilling the conditions prescribed therein. 3 That the finding of the Commissioner of Income Tax (Appeals) 28, New Delhi that in the share transaction resulting in profit, the motive of the appellant was to bring out his black money as legitimately earned LTCG for which exemption u/s 10(38) of the Act was available, is without any material on record available about the possession of black money by the appellant and in fact is an abuse on the appellant by the Assessing Officer and CIT(A) and therefore no adverse inference is liable to be drawn on such finding and further no addition is liable to be made on the basis of this finding especially when no material has been placed on record showing that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and the same were not made available to the appellant for rebuttal in spite of the same being asked for and therefore the addition of Rs 46,01,445/- is liable to be deleted. Ground No 2: Addition of Rs. 46,01,445/- made by Ld. AO and confirmed by Ld. Commissioner of Income Tax (Appeals) is bad in law being in violation of the principles of natural justice since the addition is based on the presumption of the assessing officer that the appellant is in league with an operator, who has not even been named in the assessment order and is without any material on record evidencing such linkage between the appellant and that un-named operator and therefore the addition of Rs 46,01,445/- is liable to be deleted. Ground No 3: The addition of Rs. 46,01,445/-, made by the Assessing officer on account of treating the sale proceeds of shares as an unexplained cash deposit u/s 68 and confirmation of the same by the Commissioner of Income Tax (Appeals)- 28, New Delhi, is entirely based on mere suspicions & speculations and on the basis of General Preface given in the assessment order without contradicting or pointing out any defect in any of the document placed by the appellant on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 01-02-2019. Aggrieved by the order of the Ld CIT(A), assessee appealed before the Tribunal. 5. We have heard the parties and perused the material available on record. 6. Ld. Counsel for the assessee has submitted that the addition in dispute was made and confirmed purely on presumptions, conjecture and surmise and therefore, deserve to be deleted. He has further submitted that authorities below have failed in disallowing deduction claimed by the assessee u/s 10(38) of the Act for Rs. 4601455/-. He further submitted that the lower authorities also failed to appreciate that for claiming the benefit of exemption u/s.10(38) of the Act, three requirement needs to be fulfilled i.e first the share should be held for more than one year, secondly it should be listed and sold on recognized stock exchange and thirdly on the said sale necessary security transaction, tax has been paid. He has further submitted that in the case in hand a perusal of the bills of purchase and sale shows that the shares have been held for more than one year, the same has been sold on the recognized stock exchange and necessary STT has been paid to Government treasury and therefore the exemption u/s 10(38) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lhi ITA no 6717/Del /2017/ITAT Delhi in this case the Tribunal held ; "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 Rs. 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 market in physical form by paying cash. The assessee has purchased the share M/s Kappac Pharma Ltd. in physical form and thereafter, the same have been converted into electronic mode. The purchase payments were made in cash and not through the normal banking channel therefore the same were non-verifiable from the authentic supporting details such as bank account 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. considering the findings of the Investigation Wing, I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rely of fact, this court is of the opinion that no substantial question of law arises in the present appeal. This appeal is accordingly dismissed." 11. Perusal of the order Ld CIT(A) reveals that assessee is an individual and he purchased the share M/s. Kappa Pharma Ltd in physical form and thereafter the same have been converted into electronic mode. The purchase payments were made in cash and not through the normal banking channel, therefore the same were not verifiable the authentic supporting details such as bank account /documents. The assessee is not a regular investor in shares. The assessee has failed to furnish the proof of source for the purchase transactions. The entire transactions are against human probability. The decision of the ITA 220/2019 & CM no 10774/2019 Udit Kalra vs ITO Ward - 50 (1) is squarely applicable in this case. 12. However, the case laws cited by the Ld. counsel for the assessee are on distinguished facts hence, not applicable in the instant case. In the above discussion, we are of the considered opinion that the Ld CIT(A) has rightly confirmed the addition in dispute, which does not need any interference on our part. Therefore we do not find any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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