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| The Tax Publishers2019 TaxPub(DT) 4904 (Del-Trib) : (2020) 181 ITD 0603 : (2019) 076 ITR (Trib) 0432 INCOME TAX ACT, 1961
Section 68
There is no law which prohibits purchase of shares in cash. In the instant case, assessee had filed copies of bills of purchase, copy of share certificates and transfer forms, etc. Also, shares were dematerialized few days back from the date of sale and transactions of sale of shares were carried through Demat account and banking channel on which STT was paid by assessee.Accordingly, addition made by AO under section 68 could not be sustained.
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Income from undisclosed sources - Addition under section 68 - Long-term capital gain on sale of shares - Assessee purchased shares in cash
Assessee claimed long term capital gain on sale of shares as exempt under section 10(38). AO taking note of statement of alleged entry operations recorded by investigation wing and also the fact of assessee having purchased shares in cash, held proceeds of shares as bogus unexplained credit under section 68. Held: There is no law which prohibits the purchase of shares in cash. In the instant case, assessee had filed copies of bills of purchase, copy of share certificates and transfer forms, etc. Also, shares were dematerialized few days back from the date of sale and transactions of sale of shares were carried through Demat account and banking channel on which STT was paid by assessee. 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, same could not be read in evidence against assessee. Accordingly, addition made by AO under section 68 could not be sustained.
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
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