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Case Law Details

Case Name : Abhishek Doshi Vs ACIT (ITAT Mumbai)
Appeal Number : ITA No. 3122/Mum/2022
Date of Judgement/Order : 31/05/2023
Related Assessment Year : 2014-15
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Abhishek Doshi Vs ACIT (ITAT Mumbai)

ITAT Mumbai held that the Revenue has failed to prove with any cogent evidence on record that the assessee was involved in converting his unaccounted money into long-term capital gains and short-term capital gains by conniving with any entry operator/exit provider. Accordingly, addition u/s 68 merely on the basis of suspicion unsustainable.

Facts- During the assessment proceedings, it was noticed that the assessee has shown long-term capital gains of Rs.1,85,47,659 on the sale of shares of M/s Parag Shilpa Investments Ltd, which was claimed as exempt under section 10(38) of the Act. It was further observed that the assessee has also earned short-term capital gains in respect of shares of M/s Ashika Credit and Capital Ltd. Since the quantum of huge long-term capital gains and short-term capital gains were earned from virtually unknown scrips, further investigation was undertaken by the Assessing Officer (“AO”).

AO held that the assessee resorted to preconceived scheme to procure long-term capital gains and short-term capital gains by way of price differences in share transactions not supported by market factors. Thus, the assessee has prearranged method in connivance with the operators to evade taxes. AO also alleged that the associated brokers, entry operators, and the assessee had worked out an arrangement in which the shares were acquired by the assessee, the share prices were rigged, and then with the help of entry operators by routing the cash, shares were sold at a high price to arrive at tax-free long term capital gains and short term capital gains at a reduced tax rate. Accordingly, AO made the addition of the entire amount of sale proceeds of Rs.3,10,51,461 received by the assessee as unexplained taxable income and added the same u/s. 68 of the Act.

The learned CIT(A) vide impugned order dismissed the appeal filed by the assessee. Being aggrieved, the assessee has preferred the present appeal.

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