The Tax Publishers2020 TaxPub(DT) 4917 (Mum-Trib)

INCOME TAX ACT, 1961

Section 68

Assessee by furnishing contract notes, details of STT, etc, proved genuineness of transaction of purchase and sale of shares and, therefore, addition of sale proceeds of shares under section 68 could not be upheld merely based on surmises addition of astronomical rise in price of the shares.

Income from undisclosed sources - Addition under section 68 - Long-term capital gain on sale of shares created as bogus on account of huge rise in sale price - Assessee proved genuineness of transaction

Assessee declared long-term capital gain on sale of shares as exempt under section 10(38). AO on account of an astronomical rise in price of the shares treated LTCG as bogus and made addition of sale proceeds of shares under section 68.Held: Shares were purchased through broker who had undertaken transactions of shares lying with assessee purchased in earlier years and same were sold after paying the taxes in the form of STT. The contract note for sale showed transactions timing, trade number and amount of STT paid on such shares. After sale of shares, amount of sale proceeds was credited in the bank account of assessee. Accordingly, assessee duly established genuineness of share transactions and merely based on surmises addition, could not be sustained.

Followed:Akshay Jain v. Dy. CIT, Circle-1, Ghaziabad ITA No.4199/Del/2018 assessment year 2014-15 vide Order, dated 17-1-2019 : 2019 TaxPub(DT) 797 (Del-Trib).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2014-15



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