Case Law Details
Sabbirali Alimiya Saiyed Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad held that addition u/s 68 alleging bogus capital gain simply on the basis of some report finding unearthed in case of third party without cogent material is unsustainable
Facts-
The assessee during the year claimed exempted long term capital gain of ₹ 2,54,86,714/- on sale of 7,60,003 shares of M/s Alpha Graphics India Ltd (M/s AGIL).
The AO observed that the assessee has purchased 5 lakh shares of M/s AGIL dated 20th June 2011 @ ₹ 12 per share having face value of ₹ 10 per share which were dematerialized dated 16th November 2011. Thereafter, one share of M/s AGIL got splitted into 2 shares dated 15th June 2012 at face value of ₹ 5 per share. However, the price of shares of M/s AGIL increased (Rs. 39.7/-) unprecedentedly in a short period which was not supported by the financial performance or any extra ordinary event. Further, in the investigation carried out by the Directorate of Investigation wing of Kolkata Income Tax, it was revealed that the shares of M/s AGIL were manipulated by the broker such as M/s Anand Rathi Shares & Stock Brokers Limited for providing accommodation entry by way of bogus capital gain. Therefore, the AO vide SCN dated 20th December 2016 purposed to treat the capital gain declared by the assessee as bogus and unexplained money under section 68 of the Act.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
