Case Law Details
Shri Deepak Nagar Vs ACIT (ITAT Delhi)
Conclusion: Addition under section 68 on account of bogus capital gains from penny stocks was not justified as AO had not conducted any independent and separate enquiry to prove that the transactions carried out by the assessee were not genuine or that the documents were not authentic and assessee had successfully discharged the onus cast upon him by provisions of section 68.
Held:
Assessee was a habitual investor and a qualified professional and had shown exempt income on account of LTCG from transactions on which Securities Transaction Tax was paid. AO held that assessee had entered into pre-designed modes of transactions and invested in the shares of E Ltd. just to convert his unaccounted cash in the guise of long term capital gain and so, total long term capital gain was treated as assessee’s income from undisclosed sources denying claim of exemption as Long Term Capital Gain. It was held from the assessment order, it was apparent that AO had not conducted any independent and separate enquiry in the case of assessee. Even the statement recorded by the Investigation Wing had not been got confirmed or corroborated by the person during the assessment proceedings. Since assessee had successfully discharged the onus cast upon him by provisions of section 68, therefore, AO to accept LTCG declared as such.
FULL TEXT OF THE ITAT JUDGEMENT
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