Section 10(38) capital gains exemption rejected where share transactions were treated as accommodation entries and round-tripping.

The Calcutta HC considered whether exemption under section 10(38) could be sustained for long-term capital gains arising from share transactions alleged to be accommodation entries and round-tripping of unaccounted money. Applying its earlier decision in the same line of cases, the Court held that the Tribunal had given no independent reasoning and had merely followed a coordinate Bench ruling. As the earlier decision had already been affirmed in favour of the Revenue, the same legal position governed the appeal. The question was answered for the Revenue, and the Tribunal's deletion of the disallowance was not sustained.

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Issues: Whether the Tribunal was justified in deleting the disallowance of long-term capital gains claimed as exempt under section 10(38) on the basis of share transactions alleged to be accommodation entries and round-tripping of unaccounted money.

Analysis: The appeal under section 260A was decided by applying the earlier decision of the Court in the same line of cases. The Tribunal's order was found to contain no independent reasoning and to have merely followed an earlier coordinate Bench decision. Since the earlier decision had already been affirmed in the revenue's favour, the same legal position governed the present appeal.

Conclusion: The question was answered in favour of the Revenue, and the deletion of the disallowance was not sustained.

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