Assessee's appeal allowed for alleged bogus LTCG transactions with STT paid and no revenue loss claimed

ITAT Surat allowed the assessee's appeal regarding alleged bogus LTCG transactions. The assessee purchased 20,000 shares for Rs.4,59,800 and sold 14,394 shares in the assessment year. The tribunal noted that STT was paid, bank statements and relevant documents were filed, and crucially, no long-term capital loss was claimed in the return, resulting in no revenue loss. The addition made by the assessing officer was deleted.

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Issues:
Appeal against addition of Rs.3,29,400 on sale of shares, Allegation of non-genuine transaction, Confirmation of addition by CIT(A), Appeal before ITAT Surat.

Analysis:
The appeal pertains to the addition of Rs.3,29,400 on the sale of shares by the assessee during the Assessment Year (AY) 2013-14. The Assessing Officer alleged the transactions were non-genuine and part of an accommodation entry obtained by the assessee. The assessee argued that the transactions were genuine, resulting in a Long Term Capital Loss (LTCL) of Rs.1,656, which was not claimed for carry forward. The CIT(A) upheld the addition, stating the transactions were arranged to introduce receipts into regular books for undisclosed income. The ITAT Surat heard arguments from both sides. The assessee contended that the shares were purchased online through a registered broker, supported by a debit note, and STT was duly paid. The Revenue argued it was an accommodation entry. The ITAT noted the Assessing Officer's reliance on information from the Investigation Wing and the involvement of shell companies. However, the ITAT found the transactions genuine as they were through account payee cheques and demat accounts, with no cash involvement. The ITAT referred to relevant court decisions and concluded that the addition was unjustified. The ITAT allowed the appeal, deleting the addition.

This case involved a dispute over the genuineness of share transactions leading to a claimed Long Term Capital Loss. The assessee's compliance with legal requirements, such as using account payee cheques and demat accounts, played a crucial role in the ITAT's decision to delete the addition. The ITAT emphasized the absence of cash transactions and the assessee's non-claim of the LTCL for future set off as factors supporting the genuineness of the transactions. The ITAT's reliance on court decisions and detailed analysis of the factual and legal aspects underscored the thoroughness of the judgment in addressing the issues raised by both parties.

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