Tribunal upholds decision on capital gains, confirms no additions made by Assessing Officer.

The Tribunal dismissed both the revenue's appeal and the assessee's cross-appeal, upholding the Commissioner of Income Tax (Appeals) decision. The Tribunal found no capital gain or loss as no shares were sold during the relevant assessment year. The source of investment in shares amounting to Rs. 50,30,000 was accepted by the authorities, and no addition was made. The Tribunal confirmed the deletion of additions by the Assessing Officer, concluding that there was no reason to interfere with the decision. The case was decided on December 31st, 2020.

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Issues:
- Assessment of Long Term/Short Term Capital Gain
- Investment in shares to the extent of Rs. 50,30,000

Analysis:

Assessment of Long Term/Short Term Capital Gain:
The appeal and cross-appeal were directed against the order of the Commissioner of Income Tax (Appeals) for Assessment Year 2014-15. The revenue contended that the Assessing Officer had added Rs. 98,34,260 towards Long Term Capital Gain (LTCG) due to alleged manipulation of share prices by the assessee. The revenue argued that since no details were furnished, the LTCG/Short Term Capital Gain was taken at Rs. 98,34,260. However, it was found that there was no transaction of share sale during the relevant assessment year. The assessee explained that the shares were purchased for Rs. 50,31,000, with payments made through banking channels. The source of investment was accepted by the Assessing Officer, and no addition was made. The Tribunal observed that no capital gain or loss arose as no shares were sold during the year under consideration. It was noted that the purchases of shares were spread over two assessment years, and the capital gain was declared in the subsequent year under the Income Declaration Scheme. The Tribunal upheld the CIT(A)'s decision to delete the addition made by the Assessing Officer, as there was no capital gain for the relevant assessment year.

Investment in shares to the extent of Rs. 50,30,000:
The revenue raised a ground regarding investment in shares amounting to Rs. 50,30,000. The material on record showed that the assessee had invested Rs. 50,31,000 in shares of CCL International during the relevant year. The source of this investment was explained to the Assessing Officer, who accepted the explanation and made no addition. The Tribunal confirmed that the source of investment was adequately explained and accepted by the authorities. It was clarified that the total purchase of shares was spread over two assessment years, and no capital loss occurred in the year under consideration. The Tribunal concluded that the CIT(A) rightly deleted the addition, and there was no reason to interfere with the decision.

In conclusion, both the appeal of the revenue and the cross-appeal of the assessee were dismissed, with the Tribunal confirming the CIT(A)'s order. The decision was pronounced in open court on December 31st, 2020.

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