Dineshkumar Ramchandra Tulsyan (HUF) Vs ITO (ITAT Pune)
Survey Admission Retracted Next Day – SEBI Clean Chit Sinks Revenue Case: LTCG on Shares Restored
Pune Tribunal considered additions made by AO by treating LTCG from sale of shares of Mishka Finance & Trading Ltd as bogus & denying exemption u/s 10(38). AO relied on survey statement recorded at 3.30 AM on 02.09.2015, Investigation Wing Kolkata reports on penny-stock accommodation entries, statements of operators, SEBI’s 2015 interim order & alleged abnormal price rise. AO assessed the sale consideration as unexplained cash credit u/s 68 & further made additions u/s 69C & 69. CIT(A) confirmed.
Tribunal noted that Assessee had retracted the survey admission on the very next day i.e., 03.09.2015 stating exhaustion & pressure during a 16-hour survey. Tribunal further recorded that Assessee’s name does not appear in any operator/broker statements or in any incriminating material gathered by the Investigation Wing. It relied heavily on SEBI’s final order dated 05.10.2017 revoking the earlier interim order & clearing all 104 entities, with no adverse finding against Assessee. Tribunal observed that the AO proceeded entirely on the interim SEBI order, ignoring that the final report removed all allegations.
Relying on binding decisions of Gujarat High Court in Gokuldham Enterprise LLP & Neelu Mahansaria & Bombay High Court decisions including Ziauddin Siddique, Himani M Vakil, Parasben Kochar & Indravadan Jain, Tribunal held that mere general Investigation Wing reports or price rise cannot substitute concrete evidence linking Assessee to rigging. Tribunal emphasized that Assessee produced complete evidences—contract notes, demat entries, purchase through banking channels, sale through BSE, STT paid—none of which were disputed by AO.
