| The Tax Publishers2021 TaxPub(DT) 3402 (Ind-Trib) INCOME TAX ACT, 1961
Section 68
Shares were sold through member of Bombay Stock Exchange, namely, Indira Securities Pvt. Ltd. having SEBI REGN. No. INB011286631. The sale consideration so received was credited to the bank account of the assessee. Further, shares were sold through registered brokers on the stock exchange. The details of buyers of shares were not visible as all such transactions of purchase and sale of shares on recognized stock exchange were carried out through registered brokers and worked under a software controlled by SEBI. So, genuineness of documents evidencing sale consideration from sale of shares had not been doubted by AO. Further, AO had not allowed request of assessee to cross-examine the person based on whose statement addition was made in the hands of assessee. It was clearly a violation of principles of natural justice and, therefore, addition was not sustainable.
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Income from undisclosed sources - Addition under section 68 - LTCG on sale of shares -
AO, based on information emanated from Investigation Wing, treated LTCG claimed by assessee as exempt under section 10(38) on sale of shares of Kappac Pharma Limited as bogus and made addition under section 68. Also doubting abnormal increase in share price of Kappac Pharma Limited in a very short span. Held: Offline purchases were made from Private Limited company, details regarding which were provided in debit note. It was not claimed by assessee that purchases were made through registered broker. It was a direct purchase from a shareholder who was allotted shares in November 2010. KPL was a limited company having its registered office at Mumbai. It allotted shares to various shareholders in 2010. Thereafter, in 2012 on 18-9-2012 assessee purchased 3,000 equity shares each at Rs. 2 per share and paid cash. Purchasing of equity shares on offline mode was not barred in law. After purchase, the shares were lodged for getting transfer in the name of assessee and same was completed on 09-10-2012 by transfer No.26217 and registered Folio No. AS0273 in the case of Neelam Mittal and vide transfer No.26218 by registered Folio No.TS0022 in case of Titu Mittal. Thereafter these shares were sold through member of Bombay Stock Exchange, namely, Indira Securities Pvt. Ltd. having SEBI REGN. No. INB011286631. The sale consideration so received was credited to the bank account of the assessee. Further, shares were sold through registered brokers on the stock exchange. The details of buyers of shares were not visible as all such transactions of purchase and sale of shares on recognized stock exchange were carried out through registered brokers and worked under a software controlled by SEBI. So genuineness of documents evidencing sale consideration from sale of shares had not been doubted by AO. Further, AO had not allowed request of assessee to cross examine the person based on whose statement addition was made in the hands of assessee. It was clearly a violation of principles of natural justice and, therefore, addition was not sustainable.
Followed:Krishna Devi ITANo.125 of 2020 dated 15-1-2021(Del-HC) : 2021 TaxPub(DT) 544 (Del-HC). Supported by:Arun Kumar v. Asstt. CIT (ITANo.457/Del/2018) : 2021 TaxPub(DT) 2352 (Hyd-Trib), Usha Singhania v. ITO (ITANo.1495/Kol/2018, Shyam Sundar Agarwal v. ITO [ITANo.1714/Kol/2018], Suresh Kumar Chug v. ITO (ITA No.2789/Del/2018) : 2019 TaxPub(DT) 0602 (Del-Trib) Sidhartha Jain v. ITO [ITANo.4459/Del/2017], Himanshu Chaudhary v. ITO [ITANo.7772/Del/2017] Radhika Garg v. ITO [ITA No.2429/Del/2018 : 2019 TaxPub(DT) 590 (Del-Trib) and Yogendra Dalmia ITA No.774/KOL/2018 dated 9-8-2019 (ITAT-Kol).
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