MAHAVEER RANKA HUF,NAVI MUMBAI vs. INCOME TAX OFFICER, WD-28(2)(1), NAVI MUMBAI

This appeal has been preferred by the Assessee against the order dated 16.02.2024, impugned herein, passed by the National Faceless Appeal Centre (NFAC), Delhi/ u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2013-14.

In the instant case, the Assessee had purchased 25000 shares of M/s. Unisys Softwares & Holdings Ltd. on a consideration of Rs.4,20,459/- @ Rs.17 on dated 25.01.2010 through online platform of Bombay Stock Exchange. The payment for purchase was made on the very same date through online mechanism of Bombay Stock Exchange. Subsequently, the Assessee sold such shares on dated 18.04.2012 on a consideration of Rs.51,62,671/- @ Rs.207 approx. through online platform of Bombay Stock Exchange and has received the sale consideration through RTGS on 24.4.2012 and claimed the long-term capital of Rs. 51,75,671/- being exempt u/s 10(38) of the Act. Both the Authorities below denied such claim of the Assessee and therefore the Assessee being aggrieved has preferred this appeal.

Heard the parties and perused the material available on record. Admittedly, the Assessee held such shares for a period of more than 27 months and in order to substantiate its claim u/s. 10(38) of the Act, filed relevant documents such as: (i) Contract note-cum-purchase bills, (ii) Confirmation of SEBI registered stock broker M/s. IIFL Securities, (iii) Bank Statements showing making of payment purchase of shares, (iv) D-mat statement, (v) Balance sheet of earlier years and other relevant documents etc. and therefore, in our considered view, the Assessee has duly discharged the onus cast on him u/s. 68 of the Act.

Even otherwise, neither any allegations were leveled against the Assessee or its stock broker nor any preventive or penal action has been taken by the SEBI or other agency. Further, even otherwise both the authorities below have not attributed any specific role to the Assessee qua rigging of the share prices, but in fact on the basis of investigation carried out by the Directorate of Investigation of Bombay and Kolkata and general allegation, made the additions of Rs. 51,75,671/- u/s. 68 of the Act on account of sale proceeds of the shares and Rs. 2,58,784/- on account of commission paid on arranged capital gain, without being corroborated by any evidence. Admittedly, the transactions of purchase and sale of shares involved in the instant case, have been carried out through online platform i.e. Bombay Stock Exchange and banking channels.

Thus, considering the above peculiar facts and circumstances in totality, as the Assessee has duly discharged the onus cast u/s. 68 of the Act, the additions under consideration as made by the Ld. AO and affirmed by the Ld. Commissioner, are un-sustainable, thus, the same are deleted.

In the result, appeal filed by the Assessee stands allowed.