Case Law Details
DCIT Vs Rajnikant Prabhudas Mandavia (ITAT Ahmedabad)
ITAT Ahmedabad held that Department has brought nothing on record to prove that the assessee was involved in price rigging of the instant share or that any form of cash had flown back to the assessee. Accordingly, addition on account of bogus capital gain by sale of shares unjustified.
Facts- The assessee is an individual engaged in the activities of investment in and sale of shares and mutual funds, portfolio management schemes, and dealing in futures and options.
During the year under consideration, the assessee submitted his return of income, declaring total income at Rs. 1,16,46,980/-. The case of the assessee was selected for scrutiny, and a survey u/s. 133A was conducted on the group cases of the assessee on June 18.06.2015. During the course of assessment proceedings, and further as a result of the findings of the survey proceedings and post-survey inquiries, AO observed that the assessee had sold shares of M/s Asianlak Capital and Finance Ltd, which was later changed to M/s Global Infratech Finance Ltd. The assessee had sold 15,33,500 shares for a total consideration of Rs. 9,67,73,500/-, and after deducting the cost of purchase of Rs. 23,00,250/-, long-term capital gains of Rs. 9,44,73,350/- was claimed as exempt.
Post inquiry, AO added a sum of Rs. 9,44,73,250/- to the total income of the assessee as bogus long-term capital gains. CIT(A) allowed the appeal of the assessee. Being aggrieved, revenue has preferred the present appeal.
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