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| The Tax Publishers2019 TaxPub(DT) 0204 (Del-Trib) INCOME TAX ACT, 1961
Section 68
Addition under section 68 of long-term capital gain declared under section 10(38) merely on the basis of statement recorded by investigation wing, however, without affording opportnity of cross-examination to assessee and also ignoring relevant evidences furnished by the assessee, was not justified.
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Income from undisclosed sources - Addition under section 68 - Bogus long-term capital gain on sale of shares -
AO based on statement of one 'S' recorded by investigation wing held that exempt long-term capital gain claimed by assessee on sale of shares of EBFL was not genuine but prearranged collusive transaction in form of accommodation entry without real substance. Accordingly, AO made addition under section 68.Held: The contract note along with other details was produced to show that purchase and sale of shares in question had been made through banking channel through recognized Stock Exchange through Demat account on which Security Transaction Tax had also been paid. AO did not make any enquiry as regards documentary evidences filed by the assessee. No material had been brought on record by Revenue to disprove the claim of assessee. Also it was not the case of AO that amount received on sale of shares was more than what was declared by the assessee. Further, statement of 'S' as recorded by investigation wing, was not confronted to the assessee and therefore, his statement could not be read in evidence against the assessee. Accordingly, AO was not justified in treating LTCG declared by the assessee as bogus and therefore, addition under section 68 was deleted.
Relied on : Smt. Shikha Dhawan v. ITO in ITA No. 3035/Del/2018 dt. 27-6-2018 and Kishan Chand Chela Ram (1980) 125 ITR 713 (SC) : 1980 TaxPub(DT) 1130 (SC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
IN THE ITAT, ITAT DELHI BENCH
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