TaxTMI 
TaxTMI 
2022 (11) TMI 879
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....The assessee has challenged the addition of Rs.5,79,775/- u/s 68 of the Act being the sale proceeds of sale of shares of listed companies to be bogus and non granting of exemption of long term capital gain u/s 10(38) of the Act. 2. Briefly stated the assessee is a partner in M/s. Shah Commercial Corporation carrying on the wholesale business in electrical goods and having income from business and profession, capital gains and income from other sources. The assessee filed its return of income dated 26.09.2012 declaring total income of Rs.12,98,762/-. The assessee's case was reopened and assessment order u/s 143(3) r.w.s. 147 of the Act was passed on 03.12.2019 determining total income of Rs.18,78,540/- where, addition u/s 68 of the Act am....
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....fied the financial of the said company for past 5 years which indicated poor financial condition and a meagre profit only. The AO has also inferred that there is no substantial increase in the financial status of the company to attract such huge share price. The AO goes beyond this to compare the script analysis of M/s. Diamant Infrastructure Limited and held that there was no correlation in the phenomenal price rise of the shares and observed that the assessee has sold the shares during the peak of the price which subsequently had a sharp fall, thereby holding that the assessee has invested in penny stock and routed his unaccounted money through the impugned shares. The assessee has contended that the transactions pertaining to the shares ....
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....be involved in rigging of shares. 4. The learned Authorized Representative (AR) for the assessee relied on various decisions in support of the assessee's contention and laid emphasis on the fact that the AO has failed to conduct enquiry pertaining to the persons connected with the impugned transactions. The learned AR stated that inspite of the assessee discharging his onus by furnishing all the details pertaining to the transactions, the learned AO failed to conduct enquiry. The learned AR alleged that the AO has made addition on the impugned transaction merely on the basis of suspicion based on the reports of the investigation team. The learned Departmental Representative (DR) on the other hand, controverted the same and relied on the ....
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....ansaction could not be treated as unaccounted income u/s 68. It is pertinent to point out that we have also considered the recent decision of Hon'ble Calcutta High Court in the case of Principal Commissioner of Income Tax Vs. Swati Bajaj on similar issue which held that the AO should conduct enquiry on the impugned transaction to substantiate that the claim of the assessee for LTCG/STCL is non genuine and further held that the AO can rely on circumstantial evidence based on the doctrine of preponderance of probabilities in such cases where it is beyond the reach to carve out direct evidences. But, in the present case we find that the AO has made no enquiry other than relying on the report of the investigation wing and the steep increase in ....