LTCG cannot be treated as Bogus merely on information from investigation wing

Jayesh Shantilal Vira Vs ACIT (ITAT Mumbai)

Addition u/s 10(38) on alleged bogus Long Term Capital Gain (LTCG) deleted where no further verification made by AO except solely reliance on information from investigation wing.

ITAT held that the long term capital gain on the sale of shares of M/s. Blue Circle Services Ltd. is not a bogus capital gain as the AO has solely relied on the report of investigation/survey team and has not carried out any further verification on the basis of documents furnished by the assessee. Similarly, the position of long term capital gain earned on the sale of shares of M/s. Gemstone Investment Ltd. of Rs.88,41,060/- is same as the assessee has filed all the necessary evidences before the AO and AO has failed to carry out any further investigation to prove that the long term capital gain earned by the assessee is bogus and fictitious. Consequently, the appeal of the assessee succeeds on merit also.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

The above titled appeals have been preferred by three different assessees against the orders dated 29.12.2019 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment years 2012-13 & 2013-14. Since the issues involved are common in all the appeals, these being disposed off by this common order for the sake of brevity and convenience. First, we would like to take ITA No.72/M/2021 A.Y. 2012-13.

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