Asstt. CIT v. Pardeep Kumar Aggarwal

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The Tax Publishers2016 TaxPub(DT) 3188 (Chd-Trib) Asstt. CIT v. Pardeep Kumar Aggarwal INCOME TAX ACT, 1961 --Income from undisclosed sources--Addition under section 69Alleged--Unexplained cash credits sheet--Since VHL was a listed company and sale of shares was made by assessee through registered brokers at prevalent market rate, no addition of cash credit could be made only because buyers had not shown such purchase in their balance sheet.--Assessee sold shares of VHL at the rate of Rs. 300 per share. The long-term capital gain arising on said transaction was shown by assessee in his computation of income and was claimed as exempt under section 10(38). AO observed that the shares of VHL were listed in Kolkata Stock Exchange and were consistently priced at Rs. 300 per share leading to the possibility of the same being artificially jacked up; that shares were sold through broker to four persons -- one individual person, and three companies and on enquiry, it was found that said individual was not traceable and said three companies had shown Nil investment in their balance sheet. AO concluded that the assessee had failed to establish the genuineness of transactions regarding purchase and sale of equity shares and entire transaction was considered as an accommodation entry. AO, therefore, added this amount back to the income of assessee under section 68 as unexplained cash credits. *Held:* VHL was a company listed in the Kolkata Stock Exchange and the statements of the directors of this company were recorded by AO, whereby they had confirmed the transactions of sale of shares made by assessee. The evidences in the form of contract note, bank account, Demat account, etc., were filed before AO, which had nowhere been doubted by AO, neither in his assessment order, nor in any of the remand reports furnished by him. The brokers through whom sale was made had also confirmed the sale of shares. Moreover, since long-term capital gain arising on aforesaid transaction had been shown by assessee in his computation of income, though same had also been claimed as exempt under section 10(38), AO was not justified in invoking provisions of section 68. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2016 TaxPub(DT) 3188 (Chd-Trib)

Asstt. CIT v. Pardeep Kumar Aggarwal

INCOME TAX ACT, 1961

--Income from undisclosed sources--Addition under section 69Alleged--Unexplained cash credits sheet--Since VHL was a listed company and sale of shares was made by assessee through registered brokers at prevalent market rate, no addition of cash credit could be made only because buyers had not shown such purchase in their balance sheet.--Assessee sold shares of VHL at the rate of Rs. 300 per share. The long-term capital gain arising on said transaction was shown by assessee in his computation of income and was claimed as exempt under section 10(38). AO observed that the shares of VHL were listed in Kolkata Stock Exchange and were consistently priced at Rs. 300 per share leading to the possibility of the same being artificially jacked up; that shares were sold through broker to four persons -- one individual person, and three companies and on enquiry, it was found that said individual was not traceable and said three companies had shown Nil investment in their balance sheet. AO concluded that the assessee had failed to establish the genuineness of transactions regarding purchase and sale of equity shares and entire transaction was considered as an accommodation entry. AO, therefore, added this amount back to the income of assessee under section 68 as unexplained cash credits. Held: VHL was a company listed in the Kolkata Stock Exchange and the statements of the directors of this company were recorded by AO, whereby they had confirmed the transactions of sale of shares made by assessee. The evidences in the form of contract note, bank account, Demat account, etc., were filed before AO, which had nowhere been doubted by AO, neither in his assessment order, nor in any of the remand reports furnished by him. The brokers through whom sale was made had also confirmed the sale of shares. Moreover, since long-term capital gain arising on aforesaid transaction had been shown by assessee in his computation of income, though same had also been claimed as exempt under section 10(38), AO was not justified in invoking provisions of section 68.