Case Law Details
Sanjeev Kumar Agarwal (HUF) Vs ITO (ITAT Delhi)
It was noticed by the AO that as per computation of income submitted by the assessee, income from LTCG of Rs.22,76,598/-had been claimed out of the sale of shares of Eco Friendly Food Processing Park Ltd. The AO called upon the assessee to substantiate the claim and asked it to file various documents i.e. contract notes for each transaction, relevant copy of Demat Account statement, relevant copy of ledgers in the books of broker, relevant copy of Bank Account statement and details of company in the scrip of which the assessee transacted. In response thereto, the assessee filed its reply and submitted the documents. Thereafter, the AO recorded the findings of Investigation Wing and after examining the details at length, he proceeded to disallow the claim of exemption and made addition of Rs.22,76,598/- u/s 68 of the Act.
Sr. DR vehemently argued that the AO has examined the transaction at length and also carried out certain inquiries which revealed that LTCG as claimed by the assessee was earned by the assessee from sale of shares of Eco Friendly Food Processing Park Ltd. by way of accommodation and arrangements.
It is apparent that lots of inquiries have been made by the AO and substantial material is collected by him. The following particular facts, which have been gathered by the AO are relevant for this case.
i. The assessee is not a regular investor. However, he has invested in the scrip i.e. M/s Eco Friendly Food Processing Ltd and hit the jackpot in the same. This is quite abnormal in view of the test of human probabilities laid down by Hon’ble Apex Court in the case of Durga Prasad Mor and Sumati Dayal.
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