INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Long-term capital gain on sale of shares alleged as bogus -

AO based on information emanated from investigation wing treated Kapac Pharma Ltd. as penny stock company and Long-Term Capital Gain from sale of shares of said company as declared by assessee as bogus and thus made addition under section 68. Held: Assessee filed copies of bills of purchase, copy of share certificates and transfer forms, etc. The transactions of purchase and sale of shares were carried through Demat account and banking channel on which STT had been paid by assessee. The report of the SEBI was not adverse in nature against assessee because name of assessee did not appear therein for conducting dubious transaction. The report of investigation wing and other material was neither confronted to assessee nor there was any inquiry from where it transpired that assessee was beneficiary of any bogus long-term capital gain, therefore, the same cannot be read in evidence against the assessee. Source of sale consideration was well supported by contract note issued by the registered broker and shares had been transferred from Demat account after holding for more than 12 months, therefore, assessee was eligible for exemption under section 10(38) and thus, no addition was called for under section 68.

Followed:Pr. CIT v. Krishna Devi 2021 TaxPub(DT) 544 (Del-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2014-15

SUBSCRIBE FOR FULL CONTENT