Raj Kumar Gupta Vs DCIT (ITAT Ranchi)
Conclusion: CIT (A) was directed to reassess the long-term capital gain (LTCG) claim as it was found that new evidence submitted by assessee had not been considered during the earlier proceedings.
Held: Assessee was a proprietor of Sitaram Jewellers, had earned LTCG of Rs.1,91,276 from the sale of shares worth Rs.74,30,512/. Assessee claimed this income as exempt under Section 10(38). During the scrutiny, AO questioned the genuineness of the LTCG, alleging that the shares involved were traded through a broker, B. R. Jalan Securities Pvt. Ltd., known for engaging in unfair trade practices. AO claimed that the shares were part of a manipulated transaction, involving artificially inflated prices. Based on this, AO treated the transaction as a sham and added the entire amount of ₹74,30,512/- to assessee’s income, applying tax under Section 115BBE. Assessee, aggrieved by the addition, appealed to CIT(A). However, CIT(A) upheld the AO’s decision, stating that the transactions were manipulated and amounted to colorable devices. During the appeal, assessee submitted new evidence, including a detailed explanation of the transactions, the purchase of shares through an Indian Overseas Bank account, and the submission of broker’s notes. Assesee argued that the purchases were made through account payee cheques and properly reflected in the books of accounts. Furthermore, he contended that the transactions did not violate SEBI and Stock Exchange Rules, challenging the AO’s findings. It was held that the additional details submitted by assessee which was not considered by CIT(A), in the impugned order, it was proper to remand the matter back to the file of CIT(A) to examine all those details produced and take an appropriate view and decide the issue afresh. The case was thus set aside.
