2020 (4) TMI 50

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....ed his Return of Income for the assessment year 2015-16 on 16.09.2015 declaring a total income of Rs. 13,72,420 and an exempted income (Long Term Capital Gains on Sale of Shares U/s 10(38) of the Act, 1961 ) of Rs. 15,77,000 and PPF Interest of Rs. 1,05,935. The return of Income was processed u/s 143(1) on 29.12.2015 and was selected for complete scrutiny under CASS. Notice u/s 143(2) was issued on 28.07.2016. Since there was a change in incumbent, notice u/s 129 r/w 142(1) of the Income Tax Act were issued calling for details. The Assessee had purchased 70,000 shares of M/s Midland Polymers Limited, a listed company on the BSE, for a consideration of Rs. 1,99,500 in physical form on 26.03.2012 from M/s Anurodh Infrastructure Pvt. Ltd., 319....

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.... over the given time frame of two and half years. The assessee objected to the SCN vide reply dated 23.11.2017 clearly spelling out reasons why the same were not to be treated as 'Unexplained Cash Credits' uls 68 of the Act, 1961. The assessee in order to discharge the primary Onus cast on him, furnished all the documents, explanations and information as required by the Income Tax Officer, during the course of assessment which was completed by the Assessing Officer after numerous hearings on 18.08.2016, 04.10.2016, 02.06.2017, 15.06.2017, 17.11.2017 and 23.11.2017 with the Authorized Representative, Sri. S Goutamchand. Having furnished the documentary evidences and thereby discharging the onus of proving the "genuineness of the tran....

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....ow the gain on sale of shares of Rs. 15,77,000/- as exempt u/s 10(38) of the Act, 1961 since all the requisite conditions for claiming exemption are fulfilled and the transactions are bonafide. 4. The learned AO has made additions by giving reference to the arbitrary examination of Mr. Harshvardhan Kayan by the Investigating Officer, who was stock broker, and had supposedly admitted to have provided "some" accommodation entries. The ld. AO has wrongly concluded that the appellant had entered into transactions that were part of those accommodation entries an act of connivance and scheming which is against the Principles of Natural Justice. 5. An Untested Statement / Inquiry of a Party behind the back of the appellant would ....

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.... 10. The addition has been made by grossly indulging in conjecture and surmises without there being any direct adverse material against the appellant, based only on suspicion. The Appellant reserves the Right to Add, Delete or Modify any Ground at the Time of Hearing." 5. After hearing both the sides and perusing the material on record, I find that similar issue was considered by this Tribunal in the case of Shri. Kirti K.Bhansali v. ITO for assessment year 2008-2009 in ITA No.105/Bang/2019. Vide order dated 24.05.2019, the Tribunal held as under:- "4.3.1 I have considered the rival submissions and first of all, I reproduce Para No.8 of the judgment of Hon'ble Karnataka High Court rendered in the case of M/s. Chandra....