Jainmati Jain Vs ITO (ITAT Delhi)
Preponderance of Probability Not Enough—Share Transactions Genuine, Section 68 Addition Deleted
Assessee challenged addition of ₹1,05,62,000 made u/s 68 treating part of sale consideration of shares (ALPS Motor Finance Ltd) as unexplained. Assessee submitted that the matter is squarely covered by ITAT’s decision in the case of her son Vipin Jain (ITA 909/Del/2019) for AY 2015-16, wherein identical transactions in the same scrip were held genuine. That decision was later affirmed by the Hon’ble Delhi High Court in ITA 95/2022 dated 12.03.2024.
Revenue relied on lower authorities but could not rebut the Assessee’s contention or produce any contrary judgment.
Tribunal examined the earlier decision in Vipin Jain in detail. That judgment had accepted the entire LTCG transaction from purchase in cash, dematerialisation, sale on screen-based trading through a SEBI-registered broker, & receipt through banking channels. It had also held that:
- statements of alleged entry operators did not implicate the assessee;
- ALPS Motor Finance Ltd was never suspended by SEBI, nor was trading banned;
- no material linked the assessee with any accommodation-entry racket;
- preponderance of probabilities cannot override documentary evidence;
- purchase of shares in earlier years was undisputed, hence sale proceeds could not be taxed u/s 68.
The Hon’ble Delhi High Court, affirming ITAT, held that suspicion from price rise cannot substitute evidence; no cogent material existed to show fictitious LTCG; no cross-examination was given; SEBI had not found manipulation; & the principles of Krishna Devi applied.
