Vikram N. Chandan Vs ITO (ITAT Mumbai)
ITAT Mumbai held that addition in respect of sale proceeds received for sale of shares on the stock exchange (BSE) as unexplained cash credit under section 68 of the Income Tax Act unjustified.
Facts- Vide the present appeal, the grounds taken by the assessee are in respect of addition made under section 68 by denying exemption claimed under section 10(38) of the Act for the sale proceeds of listed equity shares alleged as penny stock amounting to ₹ 1,01,38,461 and for addition of ₹ 5,06,923 under section 69C as unexplained commission estimated @ 5% on the sale proceeds of the said alleged shares.
Conclusion- Held that in our considered view, assessee cannot be put to the rigors of section 68 in respect of sale proceeds received for sale of shares on the stock exchange (BSE). Admittedly, it is also a fact on record that similar sale transactions of shares were undertaken by the assessee of other listed shares on the same platform of the stock exchange which have been accepted by the ld. Assessing Officer without any disallowance or addition.
PCIT vs. Indravadan Jain HUF [2023] 156 com 605 (Bom) wherein it was held that where shares were purchased by assessee on floor of stock exchange and not from broker, payment was made through banking channel, deliveries were taken in DMAT account where shares remained for more than one year, contract notes were issued and shares were also sold on stock exchange, there was no reason to add capital gains as unexplained cash credit under section 68.
