INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Long term capital gain on sale of shares - Assessee having failed to substantiate genuineness of alleged share transactions

AO based on statement recorded by investigation wing of one 'J' engaged in facilitation of accommodation entries of long-term capital gain through his share broking firm, sought to make addition under section 68 of long term capital gain on sale of shares as claimed by assessee as exempt under section 10(38). Assessee submitted that in the statement J there was no specific link with claim of exemption in respect of long term capital gain under section 10(38). Also, assessee submitted that share transaction was through Stock Exchange and payment was made by cheque. Held: Explanation offered by assessee was general in nature. Assessee had not stated a thing with respect to the statement of 'J' in which he had accepted facilitation of accommodation entries of long term capital gain through his share broking firm. Also there was no extraordinary increase in profits of conserned company to justify increase in value of its shares. Independent findings of AO were corroborated by information given by Investigation wing and assessee had failed to substantiate genuineness of alleged share transactions and accordingly, AO was justified in making addition under section 68.

Relied on:McDowell and Company Ltd. (1985) 154 ITR 148 (SC) : 1985 TaxPub(DT) 1186 (SC)

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2015-16

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