Case Law Details
Lokendra Khandelwal Vs ITO (ITAT Jaipur)
ITAT Jaipur held that addition towards short term capital loss treating it as bogus unsustainable as transaction of purchase and sale of shares done through banking channel and STT duly paid thereon.
Facts- AO on the basis of the information received from Investigation Wing, Calcutta/Mumbai formed an opinion that the short term capital loss declared by the assessee on shares of Luminaire Technologies for Rs. 3,41,083/- was bogus and hence a show cause notice was issued to the assessee. An explanation was furnished by the assessee but the AO was not convinced and he disallowed such declared short term capital loss and he has also considered a sum of Rs. 6,821/- being assumed commission paid by the assessee for such accommodation, as unexplained expenditure of the assessee.
CIT(A) has confirmed the action of AO.
Conclusion- Held that the assessee had purchased shares through SEBI registered broker namely Hem Securities Ltd and the same were not physical form as it would be in the case of the penny stock companies and also there is not split corporate action. Thus, we note that the assessee had purchased the shares through contract note dated 17-02-2014 and 18-02-2014 (APB 7-8) and sold all the shares through contract note dated 13-03-2014 (APB 9). It is also noteworthy to mention that shares purchased by the assesee were credited in his D Mat account and they were transferred accordingly. It is also noted from the available records that all the transactions for purchase and sale of shares through the broker Hem Securities were settled only via banking channel. There appears no ambiguity in the sale and purchase of shares through the SEBI brokers Hem Securities and all the transactions took place through banking channel and on the transactions of purchase and sale of Shares, STT had been paid having time and date stamp. Hence, taking into consideration of the above facts and circumstances of the case, we do not concur with the findings of the ld. CIT(A) on the issue in question.
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