Tribunal dismisses Revenue's appeal on Long Term Capital Gain, citing lack of evidence & inapplicability of CBDT Circular.

The Tribunal dismissed the Revenue's appeal concerning disallowed Long Term Capital Gain and unexplained expenditures, citing lack of direct evidence and accepting the appellant's evidence. The Tribunal also found no adverse inferences regarding share price increases and investigation findings. Additionally, the Tribunal held that the CBDT Circular and Office Memorandum were not applicable retrospectively, leading to the dismissal of the Revenue's appeal based on low tax effect.

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Issues:
1. Disallowance of Long Term Capital Gain claimed fraudulently.
2. Addition of unexplained expenditure on payment of commission and to a company.
3. Increase in share prices with no cogent evidence.
4. Investigation by the directorate of investigation.
5. Applicability of CBDT Circular No. 23 of 2019 and Office Memorandum dated 16.09.2019.

Issue 1: Disallowance of Long Term Capital Gain claimed fraudulently:
The assessee claimed tax-exempt Long Term Capital Gain (LTCG) of Rs.53,83,045 from the sale of a script, which was challenged by the Assessing Officer (AO) as non-genuine. The AO added the amount under section 68 of the Income-Tax Act. The CIT(A) disagreed with the AO's decision, citing lack of direct evidence against the appellant and accepted evidences produced by the assessee. The CIT(A) referred to similar cases and allowed the appeal, deleting the disallowed LTCG amount.

Issue 2: Addition of unexplained expenditure:
The AO added Rs.1,61,491 as unexplained expenditure for commission charged for providing arranged capital gain and Rs.1,50,000 as unexplained expenditure for a payment made to a company. The CIT(A) analyzed the evidence and case laws, holding that the transactions were genuine. Consequently, the CIT(A) deleted both additions made under section 69C of the Act.

Issue 3: Increase in share prices with no cogent evidence:
The AO questioned the exponential increase in share prices within a short period, raising concerns about the genuineness of the transactions. However, the CIT(A) found no adverse inferences on the evidence produced by the appellant and allowed the appeal, deleting the disallowed LTCG amount.

Issue 4: Investigation by the directorate of investigation:
The investigation conducted by the directorate of investigation in Kolkata raised suspicions regarding the company involved in the transactions. However, the CIT(A) did not draw adverse inferences based on the investigation findings and accepted the evidence provided by the appellant.

Issue 5: Applicability of CBDT Circular and Office Memorandum:
The CBDT Circular No. 23 of 2019 and Office Memorandum dated 16.09.2019, which allowed exceptions to monetary limits for filing appeals in cases of organized tax evasion activities, were raised as points of contention. The Tribunal held that these circulars did not have retrospective effect and were not applicable to the case at hand, leading to the dismissal of the Revenue's appeal based on low tax effect.

Overall, the Tribunal dismissed the Revenue's appeal due to the non-applicability of the CBDT Circular and Office Memorandum, refraining from deciding the appeal on its merits.

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