Case Law Details
Sejalben N. Vora Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad held that addition u/s. 68 of the Income Tax Act towards long term capital gain treating sale of scrip as bogus on the basis of report unearthed in case of third party without any cogent material brought against assessee is unsustainable in the eye of law.
Facts- During the year under consideration, the appellant claimed substantial long term capital gain, exempt u/s. 10(38) of the Act on sale of script of M/s. Comfort Fincap Ltd. to the tune of Rs.1,65,74,716/-. On the basis of the investigation report issued by the Investigating Wing, Kolkata available with the Revenue, a show cause notice was issued to the assessee dated 09.10.2016 as to why LTCG earned to the tune of Rs.1,65,74,716/- from the sale of share of M/s. Comfort Fincap Ltd. should not be treated as bogus and the addition u/s. 68 of the Act should not be made by treating the same as unexplained cash credit.
Commissioner (A) confirmed the addition. Being aggrieved, the present appeal is filed.
Conclusion- Held that the addition treating the long term capital gain earned by the assessee out of the sale of impugned shares of the company namely M/s. Comfort Fincap Ltd. on the basis of report unearthed by any third party in the absence of any cogent material brought against the assessee is not sustainable in the eye of law. Therefore, respectfully, relying upon the same, we delete the addition made by the Revenue.
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