Court rules in favor of assessee in tax dispute, finding no illegality in stock exchange transaction

The High Court upheld the decision of the Income Tax Appellate Tribunal, ruling in favor of the assessee. The court dismissed the appeal, finding no illegality in the transaction conducted through a broker and the Calcutta Stock Exchange.

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The assessee showed Long Term Capital Gain in her return for the assessment year 2003-04. The assessing officer treated the sale transaction as sham and added the entire sale price as income under Section 68 of the Income Tax Act. The Commissioner of Income Tax (Appeals) deleted the addition, which was confirmed by the Income Tax Appellate Tribunal. The High Court dismissed the appeal, stating that the transaction was conducted through a broker and the Calcutta Stock Exchange, finding no illegality in the process.

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