INCOME TAX OFFICER, AAYAKAR BHAWAN vs. CHANCHAL MIGLANI, -

आदेश / O R D E R Per Bench

assessee routed its own cash amount to obtain bogus LTCG. The assessee sold the shares of this entity and earned LTCG which were claimed to be exempt u/s 10(38). The Ld. AO, going by the fact that SEBI imposed penalty on certain persons facilitating such transactions for the period from 23.04.2012 to 22.03.2013, rejected the aforesaid claim of the assessee. Consequently, LTCG so earned for Rs.33.67 Lacs were added u/s 68 along with estimated commission of 2% which was added u/s 69C. Aggrieved, the assessee preferred further appeal against the same. 4. During first appeal, the assessee, inter-alia, stated that the addition was based on irrelevant material which had no connection with sale of shares by the assessee. The Ld. CIT(A), upon perusal of SEBI order, concurred that SEBI had penalized the entity on account of violation made by its promoter directors wherein the promoter directors had sold their shares offline u/s 15-I of SEBI Act, 1992 without making disclosure under regulation 13(4A) read with 13(5) of the PIT regulations and under regulation 29(2) read with regulation 29(3) of SAST regulations. The Ld. AO primarily quoted the SEBI order to reject the claim whereas no proximate connection between SEBI order which penalized M/s PML for being negligent in complying with the disclosure norms as per SEBI regulation and inference treating capital gain derived from sale of shares of PML as bogus transaction, was established either at the time of reopening or during assessment proceedings. It was another fact that the said shares were not purchased by the assessee from the above mentioned

promoter directors. There was no evidence also that the sale of shares by the promoter director was non-genuine. Finally, both the additions were deleted against which the revenue is in further appeal before us. 5. From the enumerated facts, it is quite clear that the impugned additions are merely based on SEBI order levying certain penalty on PML and its promoter directors. However, the perusal of SEBI order, as extracted in the assessment order, clearly shows that the penalty has been levied merely for failure to meet disclosure norms. It nowhere states that the impugned sale of shares by the promoter directors was non-genuine. It is another undisputed fact that the assessee has not purchased any shares from Promoters directors. The claim of the assessee is backed up by sufficient documentary evidences which are not, in any manner, controverted by Ld. AO with any other corroborative material. The very foundation of the impugned additions, thus, stood vitiated. It is trite law that no addition could be made merely on presumptions or conjectures. Therefore, both the impugned additions have rightly been deleted by Ld. CIT(A) in the impugned order. Accordingly, we see no reason to interfere in the same. The appeal of the revenue stand dismissed. Delving into assessee’s legal grounds has been rendered merely academic in nature.

BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KENDRIYA SADAN, SECTOR – 9A CHANDIGARH