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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: SHRI PRADIP KUMAR KEDIA & SHRI MAHAVIR PRASAD
PER MAHAVIR PRASAD, JUDICIAL MEMBER
This appeal filed by the Assessee is directed against the order of the Ld. CIT(A)-10, Ahmedabad dated 22.02.2018 pertaining to A.Y. 2014-15 and following grounds have been taken:
2 . A.Y. 2014-15 1.That ld.CIT(A) has erred in law and facts by not quashing the order passed under section 143(3) of the Act and therefore the order passed by the learned AO is required to be quashed and the addition made therein should be deleted in full and therefore the learned AO is to be directed to accept the returned income. 2.That the learned CIT(A) has erred in law and facts by not deleting the addition of Rs.9,70,468/- made under section 68 of the Act and therefore, the addition made by the Id.AO should be deleted in full while computing the total income. 3.That the learned CIT(A) has erred in law and facts by rejecting the claim of exempt income of Long Term Capital Gain u/s Sec 10(38) of the Act and therefore the learned AO should be directed to allow the said claim of Rs. 9,70,468/- under section 10(38) of the Act while computing the total income.
4. That the learned C1T(A) has erred in law and facts by not allowing appeal for the determination of the amount of the interest under section 234B of the Act and therefore the Id.AO be directed to calculate correct interest under section 234B of the Act.
5. That the appellant craves liberty to add, amend, alter and delete any grounds of appeal before the final hearing.
Facts of the case are that the assessee in the business of trading in share and also earning income from interest etc. The Investigation Wing of the department notice suspicious transaction relating to long term capital gain on shares of Alpha Graphic India Ltd. where assessee has sold 12,784 shares of and 8,750/- shares of Blazon Marbles at Rs. 3,86,996/- resulting into long term capital gain of Rs. 9,70,468/-. The assessee has claimed long term capital gain of Rs. 24,29,998/- on sale of different shares including the shares of the above two companies.
The assessing officer after receiving information from the Investigation Wing issued notice to the assessee alleging that assessee has carried out on bogus penny stock and booking of bogus LTCG.
In response to the notice, assessee submitted purchase bill, sales bills, copy of demat statement etc. and reiterated that the assessee has not carried out any 3 . A.Y. 2014-15 bogus penny stock transaction and earned bogus long term capital gain claimed u/s. 10(38) of the Act.
But ld. A.O. did not agree with the contention of the assessee and made an addition of Rs. 9,70,468/-.
Against the said order, assessee preferred first statutory appeal before the ld. CIT(A) who confirmed the action of the A.O. holding that Alpha Graphic India Ltd. and Blazon Marbles company did not have credentials and both companies were bogus company and confirmed the action of the ld. A.O.
We have gone through the relevant record and impugned order and heard both the parties. Assessee submitted that he is a customer of ICICI Bank and having demat account of ICICI Securities Ltd. and he has purchased shares through ICICI Securities Ltd. and money has been paid through banking channel. Copies of bank statement and Demat account have been submitted before the lower authorities.
Ld. A.R. also drawn our attention towards the statement of Edelweiss Broking Ltd. through the said company shares were sold and also shown us copy of the Contract Note and all these details were furnished before the lower authorities. The assessee has earned long term capital gain from the sale of companies share i.e. Alpha Graphic India Ltd. and Blazon Marbles.
In our considered opinion, in such case assessee cannot be held that he earned Long Term Capital gain through bogus company when he has discharged his 4 . A.Y. 2014-15 onus by placing all the relevant details and some of the shares also remained in the account of the appellant after earning of the long term capital gain.
Ld. A.R. contention is that no statement of the Investigation Wing was given to the assessee which has any reference against the assessee.
In support of its contention, ld. A.R. also cited an order of Co-ordinate Bench in in the matter of Mohan Polyfab Pvt. Ltd. vs. ITO wherein ITAT has held that A.O. should have granted an opportunity to cross examine the person on whose statement notice was issued to the assessee for bogus long term capital gain. But in this case, neither statement was supplying to the assessee nor cross examination was allowed by the ld. A.O. Therefore, in our considered opinion, assessee has discharged his onus and no addition can be sustained in the hands of the assessee.
In the result, appeal filed by the Assessee is allowed.