M/s. J.V.S. Foods Pvt. Ltd. Vs DCIT (ITAT Jaipur)
The sales of the shares are not in dispute as the same were sold from the d-mat account against the consideration which was received by the assessee through banking channel. The dematerialization of the shares in the d-mat account is also not in dispute hence the holding of the shares in the d-mat account by the assessee prior to the sale as well as the sale transaction are not in dispute. Once holding of the shares prior to the sale and the sale transaction itself are not in dispute then the same cannot be held as bogus transaction though may be a case of introducing unaccounted income of the assessee for depressing the purchase price of the shares. However, in the absence of any material or the fact to show that the assessee has introduced his own unaccounted money in the name of long term capital gain, the mere suspicion is not enough to deny the claim of the assessee.
FULL TEXT OF THE ITAT JUDGMENT
This appeal by the assessee is directed against the order dated 17th December, 2015 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 the appellant has failed to prove existence of long term capital gain of Rs. 2,65,27,020/- on sale of listed shares on recognized stock exchange and thereby upholding addition of said Rs. 2,65,27,020/- to the income of the appellant as income from undisclosed sources after rejecting appellant’s claim of its exemption u/s 10(38) of the I.T. Act, 1961.
2. That the appellant craves the permission to add to or amend to any of the above grounds of appeal or to withdraw any of them.”
2. The assessee is a private limited company and engaged in manufacturing of nutrition food to be supplied in various Government schemes. The assessee filed its return of income for the year under consideration on 15.10.2010 declaring loss of Rs. 4,36,62,802/- and long term capital gain of Rs. 2,65,27,020/- which was claimed as exempt under section 10(38) of the IT Act. The long term capital gain claimed by the assessee is arising from sale of 98,000 shares of M/s. Well Pack Papers & Containers Ltd. The AO disallowed the claim of the assessee by treating the same as bogus and holding that the assessee has introduced its unaccounted income in the shape of long term capital gain. The assessee challenged the action of the AO before the ld. CIT (A). The ld. CIT (A) though confirmed the action of the AO, however, allowed the claim of purchase consideration and sustained the addition to the extent of capital gain instead of full amount of sale proceeds made by the AO.
3. We have heard the ld. A/R as well as the ld. D/R and considered the relevant material on record. We find that the facts as well as the issue involved in this appeal are identical to the facts and issue involved in the appeal in ITA No. 826/JP/2014. The details of purchase and sale of shares are given by the AO in para 2 of the assessment order as under :-
