Case Law Details
Pramod Kumar Lodha Vs ITO (ITAT Jaipur)
Decision of the AO holding the transaction as bogus and denying the claim of long term capital gain under section 10(38) of the Act is based on suspicion without any material evidence to controvert or disprove the evidence produced by the assessee. The enquiry conducted by the ITO Investigation Indore is not a conclusive finding of fact that the transaction of purchase of shares by the assessee is bogus particularly in view of admitted fact that these shares were held by the assessee and were duly materialized in the d-mat account. Therefore, until and unless a finding is given that the shares were acquired by the assessee from the person other than the broker claimed by the assessee, the mere suspicion how so ever strong may be, cannot be a basis of addition or disallowance of claim. As regards the statement recorded by the ITO Investigation Indore of one Shri Mahesh Pancholi, it is recorded by the AO that the said person was in the employment only for the past four years and further the said witness has not denied the confirmation issued by the broker, but has given a vague statement of having any knowledge of such transaction of shares sold to the assessee. Even otherwise, these enquiries were conducted at Indore and the statement was recorded at the same place and rather at the back of the assessee. Therefore, until and unless these witnesses were present during the assessment proceedings, the assessee was denied the proper opportunity of cross examination. Merely supplying of statement to the assessee at the fag end of the assessment proceedings is not sufficient to meet the requirement of giving an opportunity to cross examine the witness when the witness himself was not available at the place. Accordingly, in view of the above facts and circumstances as discussed above and following the earlier decision of this Tribunal as well as various decisions relied upon by the assessee, we hold that the denial of the claim on the basis of suspicion without any cogent material to show that the assessee has brought back his own unaccounted income in the shape of long term capital gain, the said action of the AO is not sustainable.
FULL TEXT OF THE ITAT JUDGMENT
This appeal by the assessee is directed against the order dated 15th October, 2014 of ld. CIT (A) for the assessment year 2010-11. The assessee has raised the following grounds of appeal :-
1. That on the facts and in the circumstances of the case the ld. CIT (A) is wrong, unjust and has erred in law in confirming finding recorded by the assessing officer that long term capital gain of Rs. 72,61,309/- on sale of shares is not genuine allegedly on the ground that purchase of those shares is a sham transaction and thereby confirming addition to the extent of Rs. 72,61,309/- to the income of the appellant u/s 69 of the I.T. Act, 1961 on account of alleged unaccounted consideration in purchase of those shares.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
