TaxTMI 
TaxTMI 
2019 (8) TMI 1520
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....ished written submission and furnished contract notes, ledger, D-mat holding and capital gain working along with details of bond purchased. The AO after verifying the details treated the long term capital gain of Rs. 13,98,729/- claimed by the assessee as bogus transaction and added the said amount to the income of the assessee as unexplained credit. Accordingly, the AO passed the assessment order u/s 143 (3) of the Act determining the total income of the assessee at Rs. 19,50,880/- as against the return income of Rs. 5,52,150/- after making addition of Rs. 13,98,729/- as unexplained credit u/s 68 of the Act. The assessee challenged the assessment order before the CIT (A). However, the Ld CIT(A) dismissed the assessee's appeal and confirmed the addition made by the AO. 3. The assessee has challenged the impugned order passed by the Ld. CIT (A) on the following effective grounds:- 1. "In the facts and circumstances of the case and law, the Learned CIT (A) has erred in upholding the action of the Assessing Officer of completing the assessment u/s 143 (3) and making addition of Rs. 13,98,729/- and disallowing he LTCG claim of Rs. 13,98,729/- u/s 10(38) merely on the basis ....
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....f the assessee, copy of D-mat account in the name of assessee, copy of order of the Hon'ble Bombay High Court approving merger of Conart Traders Ltd., copy of balance sheet etc in order to establish genuineness of the purchase of shares. The Ld. counsel further contended that the assessee sold all the shares on trading platform of the stock exchange on 22, 23 and 24 July, 2013 and furnished share broker contract notes, copy of D-mat account, ledger account of the broker, copy of bank statements and copy of ledger account of the share broker in the books of the appellant in order to prove the sale of the shares in question. The Ld. counsel further submitted that the AO has not found any discrepancies with regard to the documentary evidence produced by the assessee to demonstrate the genuineness of purchase and sale of shares. The Ld. counsel further pointed out that the AO had passed the assessment order on the basis of the information received from DDIT (Inv.) without applying his mind and pointing out any evidence to corroborate the allegations against the assessee. In view of the aforesaid facts, the Ld. counsel for the assessee submitted that since the Ld. CIT (A) has wrongly up....
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....erused the material on record, including the cases relied upon by the parties, in the light of the rival contentions. The only grievance of the assessee is that the Ld. CIT (A) has wrongly confirmed the action of the AO in rejecting the claim of long term capital gain holding the transaction as bogus. As pointed out by the Ld. counsel for the assessee, the AO has rejected the claim of the assessee on the basis of the outcome of investigation carried out by the investigation wing of the department which unearthed the organized racket which used to provide bogus entries to the beneficiaries to facilitate them in claiming exempt income u/s 10(38) of the Act. As pointed out by the Ld. counsel, the AO neither provided the copies of statement of witnesses relied upon nor provided an opportunity to cross examining those witnesses. We notice that the authorities below have not referred any witness, who has deposed during investigation that the assessee obtained accommodation entries in the present case from the bogus operators. We further notice that AO has not doubted the sale and purchase of the shares in question. We further notice that the authorities below have not pointed out any cog....
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.... counsel for the assessee, therefore, rightly contended that the twin conditions of section 10(38) of the Act have been satisfied in the case of the assessee. The assessee has been able to prove that she has entered into the genuine transaction of purchase and sale of shares and the sale consideration is received from broker through banking channel. The brokers have not denied the transaction with the assessee. The assessee rooted the transaction of sale of shares through recognized stock exchange after making payment of STT. In similar circumstances, ITAT SMC Bench, Delhi in the case of Meenu Goel vs ITO (supra) following the decision of Jurisdictional Hon'ble P&H High Court in the case of Pr.CIT vs Prem Pal Gandhi (supra) deleted the similar addition. Therefore, the issue is covered in favour of the assessee by the order of ITAT, Delhi Bench in the case of Meenu Goel vs ITO (supra) followed by judgement of Jurisdictional P&H High Court which is binding. There is no other material available on record to rebut the claim of the assessee of exemption claimed u/s 10(38) of the Act. 9. Keeping in view of the above discussion and the material on record, in the light of the orde....
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....thers (supra) and Andaman Timber Industries (supra) would be applicable and support the case of the assessee since no adverse finding has been rendered in respect of the direct material evidence placed on record in respect of her transactions of purchase and sale of the 'said shares' of M/s. Shukun Constructions Ltd. which stand duly disclosed in her audited Balance Sheets filed with the return of income of assessment years 2004-05 and the current year under consideration. In this factual and legal matrix of the case, as discussed above, we find that the addition of Rs. 95,12,812/- under section 68 of the Act made and confirmed by the authorities below to be unsustainable and therefore direct the AO to delete the said addition and accept the LTCG income of Rs. 93,00,012/- shown as exempt under section 10(38) of the Act. Consequently, ground No. 1 of the assessee's appeal is allowed." 8. The Hon'ble Supreme Court in the case of M/s Andaman Timber Industries vs. Commissioner of Central Excise, Kolkata, Civil Appeal No. 4228 of 2006 has held that where the adjudicating authority gives its findings on the statements of witnesses, not allowing assessee to cross-examine witnesses is a....
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....ed by BCB Brokerage Pvt. Ltd. showing inward entry of shares in Demat account after BSE allowed its dematerialization on approval of merger of Conart Traders ltd. with Santoshima Tradelinks Ltd. by the Hon'ble Bombay High Court. 4. Copy of Balance Sheet as on 31.03.2012 and 31.03.2013, showing investment in shares of Conart Traders Ltd. 10. Similarly, the assessee has submitted the following documents to prove the sale of shares in question: 1. Share Broker's contract notes issued by Dilip C Bagri (registered with BSE and SEBI) 2. Copy of Demat account with BCB Brokerage Private Limited showing debit/outward entries. 3. Ledger account of the Broker Dilip C. Bagri showing transaction of sale of shares 4. Copy of bank statement of the assessee showing receipt of amounts from share broker in respect of the shares sold, an 5. Copy of ledger account of the share broker in the books of the assessee. 11. The authorities below have not doubted the documentary evidence produced by the assessee to prove the genuineness of the transaction of sale and purchase of the shares in question. Further, the authorities below have not pointed ....