Case Law Details
Sanjay Kumar Jain Vs ITO (ITAT Chennai)
Conclusion: Claim of assessee for long term capital gains arising on transfer of shares u/s. 10(38) was real or sham, required a revisit by AO by considering all the evidences produced by assessee and also, AO should allow the opportunity of cross-examination to check the nature of transaction.
Held:
Assessee had claimed exemption of long term capital gains arising on transfer of shares u/s.10(38). AO denied the same by treating as unexplained cash credit under Section 68. It was held in the cases of Vimalchand Gulabchand, Praveen Chand, Gatraj Jain & Sons (HUF) and Mahendra Kumar Bhandari, Heerachand Kanunga, the directions was given that the transactions claimed by assessee whether real or sham, required a revisit by AO. Assessee should prove the transaction of Long Term Capital Gains in respect of which assessee had claimed the exemption u/s.10(38) by providing all such evidences as required by AO to substantiate the claim as also by producing the persons through whom assessee had undertaken the transaction of the purchase and sale of the shares which would include the sub-broker, friend and the broker through whom the transaction has been done, before AO for examination. A useful reference might be made to the law laid down in the case of CIT vs. Sunita Dhadda, SLP (Civil) No.9432/2018, dated 28.03.2018, while affirming a judgment in the case of CIT vs.Smt. Sunita Dhadda, where the importance of providing an opportunity to cross-examine the witness had been stressed. This was an important constituent of natural justice. Only after all the steps required under the law was complete, it could be ascertained whether claim of capital gains was bogus or not. Therefore, the issue was remitted back to the file of AO for consideration afresh in accordance with law.
FULL TEXT OF THE ITAT JUDGMENT
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