Sudhir Babu Chalasani Vs ITO (ITAT Hyderabad)
ITAT Hyderabad held that addition under section 69A of the Income Tax Act as unexplained money towards bogus long term capital gains not sustained since assessee has proved the genuineness of transactions of purchase and sale of shares as ordinary investor.
Facts- During the course of assessment proceedings, the AO noticed that, as per the information received from Investigation Wing, Stampede Capital Ltd, is a penny stock company, was engaged in providing accommodation entries to various persons by accepting undisclosed cash. Post considering the submission of the assessee, AO concluded that sale consideration received for sale of shares of Stampede Capital Ltd, as unexplained money and brought to tax u/s 69A of the Income Tax Act. CIT(A) sustained the addition. Being aggrieved, the present appeal is being filed.
Conclusion- There is no dispute with regard to the fact that, the assessee has proved the genuineness of the transactions of purchase and sale of shares of Stampede Capital Ltd as an ordinary investor in shares which is evident from the relevant details of purchase of shares of Brilliant Securities Ltd and corresponding consideration paid through Vijaya Bank. In our considered view, the allegation of the A.O. and the Ld. CIT(A) that, the consideration received from sale of shares of Stampede Capital Ltd is unexplained money taxable u/s 69A of the Act, is totally on the basis of suspicion without there being any material to support the findings of the A.O. and thus, the findings given by the Ld. CIT(A) to sustain the additions made by the A.O. cannot be upheld.
