Case Law Details
Jitendra Udaylal Jain Vs National Faceless Assessment Centre (NFAC) (ITAT Mumbai)
ITAT Mumbai held that addition under section 68 of the Income Tax Act merely on the basis of information and statement of third party without any tangible material on record is unsustainable in law.
Facts- Based on the information from Director of General of Income tax (Inv) Pune, on Bogus Long term capital gain manipulation in market prices of shares of certain companies listed on Bombay Stock Exchange, assessee was identified as one of the beneficiary who obtained through above said manipulation of prices of shares to the extent of ₹.1,10,80,500/-. Based on the above information the case of the assessee was reopened by issue of notice u/s. 148 of the Act after proper approval.
AO observed that assessee earned Long Term Capital Gain during the year and claimed it as exempt u/s. 10(38) of the Act and he considered this transaction as suspicions because of huge claim of capital gains earned by the assessee.
AO heavily relied on the various statements recorded by the various entry operators, brokers and exit operators confirmed the addition by adding the sale proceeds of shares u/s. 68 of the Act to the extent of ₹.1,10,52,724/-. CIT(A) sustained the addition.
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