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| The Tax Publishers2019 TaxPub(DT) 7600 (Pune-Trib) INCOME TAX ACT, 1961
Section 10(38)
As assessee was beneficiary by accommodation entries provided by Jamakharchi companies, he was not entitled to exemption under section 10(38) as regards bogus long term capital gain on sale of shares of such companies.
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Exemption under section 10(38) - Long term capital gain on sale of shares - Assessee being beneficiary of accommodation entries provided by Jamakharchi companies -
Assessee claimed exemption under section 10(38) as regards long term capital gain on sale of shares of LD&PL. AO doubted astronomical increase of share price of LD&PL which led to returns at 350% and accordingly, AO treated long term capital gain as bogus and made addition. Held: There was no business operation of LD&PL during the period of purchase and sale of shares and astronomical increase of share price of LD&PL which led to returns at 350% was unjustified. Assessee failed to controvert and put forth any evidence rebutting investigation report showing the transactions of purchase and sale of shares as not genuine. The suspension imposed by BSE on trading of LD&PL shares from 28-8-2015 was still in force. Accordingly, assessee was the beneficiary by accommodation entries provided by Jamakharchi companies, i.e., LD & PL, DTPL and brokers KORP SL and GFSL through multiple layering of transactions and therefore, assessee was not entitled to exemption under section 10(38).
REFERRED :
FAVOUR : Against the assessee
A.Y. :
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