Late Arvind Kumar Kotawal Vs ACIT (ITAT Delhi)
ITAT Delhi held that addition under section 68 of the Income Tax Act by treating LTCG as bogus merely on the basis of assumption and conjecture is not sustainable in law since purchase and sale of shares were made via banking channel.
Facts- The assessee was in employment with M/s Kotwala Creation Ltd., and earned salary income, income from house property, capital gains and other sources and assessee Arvind Kumar Kotawala, was stated to have expired on 5th of May, 2015 and Shri Sushil Agarwal, CA, appeared for assessee through his son and legal heir Manish Kotawala.
After the conclusion of the assessment proceedings, AO added Rs. 93,28,200/- to the total income of the assessee. By aggrieving with the assessment order, the assessee / appellant knocked the door of CIT(A), but appeal of the assessee dismissed, and hence, assessee before us, as appellant.
Notably, while filing the return of income for the assessment year 2014-15, the assessee / appellant declared an amount of Rs. 88,84,000/- as LTCG earned from sale of shares of the listed entity i.e M/s UNNO industries Ltd., and claimed the same amount as exempt u/s 10(38) of the Act. However, AO treated his LTCG as bogus and unexplained cash credit u/s 68 and the same has been taxed u/s 115BBE of the Act and also added Rs. 4,44,200/- i.e. 5% of Rs. 88,84,000/- as the alleged commission paid to the broker.
