2019 (4) TMI 543

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....T(A) has erred in law and on facts in upholding the order passed by the Assessing Authority and confirming the additions. iii) The Ld. CIT(A) has erred in law and on facts in not appreciating the fact that additions to the income of the assessee were made purely on presumptions on conjecture and surmises and therefore deserve to be deleted. iv) The Ld. CIT(A) has erred in law and on facts in disallowing deduction claimed by the assessee u/s. 10(38) of the Income Tax Act for Rs. 27,20,457/-. The Ld. CIT(A) as well as AO has failed to appreciate that for claiming the benefit of exemption u/s. 10(38) of the Act three requirement needs to be fulfilled. (a) First the share should be held for more than 1 year. ....

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....ation wing)". Notice u/s. 143(2) of the Income Tax Act, 1961 (in short "Act") was issued on 18.9.2015. Consequent on transfer of jurisdiction, the further notice u/s. 143(2) of the Act was issued to the assessee on various dates and again notice u/s. 142(1) issued for hearing on 27.5.2016. In compliance to the same the A.R. for the assessee appeared from time to time and furnished the information called for. During the year under consideration, the assessee has declared income earned from Long Term Capital Gain of Rs. 27,20,457/- on sale of shares during the year which has been claimed exempt u/s. 10(38) of the Act. AO held that the transactions was bogus or sham and nothing but a racket of accommodation entries, by way of long term capital....

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....urther stated that in this case a perusal of the bills of purchase and sale shows that the shares have been held for more than 1 year, the same has been sold on recognised stock exchange and necessary STT has been paid to Govt. Treasury and therefore the exemption u/s. 10(38) of the Act cannot be denied in the circumstances of the case. Hence, he requested to cancel the orders of the authorities below and allow the appeal of the assessee. In support of his contention, he filed a Paper Book containing pages 1 to 91 in which he has attached the copy of written submissions/arguments; show cause notice dated 19.12.2016 issued by the AO; reply dated 26.12.2016 of the assessee to the shows cause notice dated 19.12.2016; copy of the bank statement....

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....s not a regular investor in shares. Assessee has failed to furnish the proof of source for the purchase transactions. Thus, the entire transactions are against human probability. He further stated that the case laws relied upon by the AO as well as Ld. CIT(A) may be read as his arguments including the decision of the Hon'ble Supreme Court of India in the case of Mc Dowell and Company Limited, 154 ITR 148. 5. I have heard both the parties and perused the records especially the impugned order. I find that the assessee is an individual and the amount of cash credit Rs. 27,68,457/-. However, on perusing the assessment order, I find that there was a specific information that assessee has indulged in non-genuine and bogus capital gain obtained....