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The Tax Publishers2020 TaxPub(DT) 0453 (Ind-Trib) INCOME TAX ACT, 1961
Section 10(38)
Where for assessment year 2013-14 assessee offered cash income as undisclosed income and Revenue authorities were unable to find any other source of undisclosed income for assessment year 2013-14, therefore, assessee had undisclosed cash income at the end of assessment year. Accordingly, assessee was eligible to claim exemption under section 10(38).
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Exemption under section 10(38) - Long-term capital gain on sale of shares - Eligibility of -
Assessee claimed exemption under section 10(38) for long-term Capital Gain from sale of shares. AO examined the transaction of long-term Capital Gain and ongoing through various documents relating to Capital Gain observed that no Secured Transaction Tax (STT) was paid in the bill of broker. When AO came to conclusion that assessee had shown bogus claim of long-term Capital Gain to evade tax, in the mean time, assessee filed a copy of declaration made under the Income declaration Scheme 2016. As per declaration, cash income was offered to tax and due taxes were paid as per the scheme. Assessee contended that as per scheme he was eligible to claim the benefit of cash income disclosed as a source for the bogus long-term Capital Gain claim made. AO was not satisfied and did not allow the assessee's claim and made addition of bogus long-term Capital gain under section 10(38).Held:From perusal of answer given by CBDT there remained no confusion to extent that income declared in earlier assessment year can be taken into account to explain the transactions of subsequent year provided there was a nexus between the income declared and the transaction of the subsequent assessment year. For assessment year 2013-14 assessee offered cash income as undisclosed income. Revenue authorities were unable to find any other source of undisclosed income for assessment year 2013-14. Therefore, assessee had undisclosed cash income at the end of assessment year and there was no other undisclosed income found, except the bogus claim of long-term capital gain. Therefore, income offered by assessee under IDS, 2016 was rightly claimed as the source of the bogus long-term capital gain and allowed the sole ground raised by the assessee.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2014-15
IN THE ITAT, INDORE BENCH
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