Sheela Ashok Bafna Vs ITO (ITAT Mumbai)
ITAT Mumbai held that disallowance of claim of exemption u/s. 10(38) on alleged bogus LTCG untenable since disallowance is based on general report of the investigation wing. Thus, addition u/s. 68 deleted due to lack of adequate evidence disallowance set aside.
Facts- The case of the assessee was selected for scrutiny and the AO noted that the assessee had claimed Long Term Capital Gain (LTCG) of Rs.61,02,308/- on sale of scrip of M/s. Greencrest Financial Services Ltd which company was earlier known as M/s. Marigold Glass Industries Ltd. According to the AO, he has received information from the DDIT (Inv.) Unit, Kolkata, Ahmedabad & Mumbai that the scrip of M/s. Marigold was one among the eighty four (84) penny-stocks. Post inquiry, the AO concluded that the entire LTCG claim of assessee was bogus, and such an act was resorted to by assessee for converting her black-money to white. Thus, the AO was of the opinion that the claim of the assessee was non-genuine and applied the “preponderance of the probabilities human conduct’ and was of the opinion that the transaction of purchase and sale of One Lakh shares of M/s. Greencrest (earlier known as M/s. Marigold) led to generation of exempt LTCG were not genuine transaction; and hence, the entire sale consideration of Rs.62,02,308/-received from sale of One Lakh share of M/s. Greencrest, was treated as undisclosed income of the assessee and brought to tax u/s 68 of the Act as unexplained cash credit.
