Case Law Details
Raigarh Jute & Textile Mills Ltd Vs ACIT (ITAT Kolkata)
Share Trading Loss cannot be treated as bogus in the absence of any direct incriminating evidence against the assessee on the basis of mere distinguishable and weak circumstantial evidence
In the case, Raigarh Jute & Textile Mills Ltd, the appellant, argued against the allegations put forth by the Assessing Officer (AO). The appellant denied their involvement in any long-term capital gains, contended that the purchase of shares was made from their own funds, and disputed any alignment with the case of PCIT vs. Swati Bajaj & Ors. The main point of contention was the AO’s disallowance and adding back of the appellant’s claim for a deduction of loss suffered in its share trading business.
The ld. counsel for the assessee has submitted that all the allegations levelled by the Assessing Officer were general allegations. That the name of the assessee did not feature in the statement of the share brokers as referred to the assessment order. That the assessee was not beneficiaries of any long-term capital gains, rather, it was loss. That the payments for purchase of shares were made out of own funds of the assessee. That the facts of the case of the assessee were different and distinguished from the decision of Hon’ble Jurisdictional High Court in the case of PCIT vs. Swati Bajaj & Ors reported in [2022] 139 taxmann.com 352 (Calcutta), wherein, the Hon’ble Calcutta High Court has confirmed the additions of bogus long-term capital gains.
The tribunal, after careful consideration of the case specifics and comparison with previous cases, including PCIT vs. Swati Bajaj & Ors, ruled in favour of Raigarh Jute & Textile Mills Ltd. The tribunal emphasized the differences in the two cases and noted the absence of direct incriminating evidence against the appellant. The tribunal also noted that circumstantial evidence did not suggest the likelihood of the appellant’s involvement in price rigging or being a pre-determined beneficiary of a dubious scheme.
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