Haresh Dilip Vora Vs ITO (ITAT Mumbai)
The ITAT Mumbai considered an assessee’s appeal against the NFAC order dated 21/05/2024, which had upheld an assessment order dated 16/12/2016 under section 143(3) of the Income-tax Act, 1961 for assessment year 2014-15. The assessee had declared Long Term Capital Gain (LTCG) of Rs.47,51,164/- from the sale of shares of Sunrise Asian Ltd and claimed exemption under section 10(38). The shares originated from the assessee’s purchase of 10,000 off-market shares of Santoshima Tradelinks Ltd at Rs.25 per share from M/s. P. Saji Textiles Ltd. Payment of Rs.2,50,000/- was made on 29/09/2011, the shares were transferred to the assessee on 20/11/2011 and subsequently dematerialized. Following the amalgamation of Santoshima Tradelinks Ltd with Sunrise Asian Ltd by the Bombay High Court’s order dated 08/10/2012, the assessee received 10,000 Sunrise Asian Ltd shares in a 1:1 ratio on 26/06/2013. The shares were subsequently sold for Rs.50,06,180/-.
The Assessing Officer deducted the cost of acquisition and treated the resulting LTCG of Rs.47,51,164/- as an unexplained credit under section 68. An additional Rs.50,061/-, calculated at 1% of the transaction value, was added under section 69C as alleged commission relating to the transaction. The CIT(A) upheld both additions.
Before the Tribunal, the assessee submitted that the purchase and sale transactions were supported by purchase bills, broker notes, share certificates, demat statements, sale bills, bank statements and Form 10DB showing payment of Securities Transaction Tax. The assessee contended that the Assessing Officer had accepted the purchase and sale transactions and had not identified any defect in the documentary evidence. It was also submitted that the investigation reports relied upon by the Assessing Officer did not directly mention the assessee or his broker and that no adverse SEBI or BSE action concerning the assessee or broker had been shown. The assessee further argued that third-party statements had been relied upon without providing an opportunity to rebut them or cross-examine the persons concerned.
