· In the return of income, assessee declared income from short-term and long-term capital gain on account of sale of shares.
· During the course of assessment, the AO issued letters u/s 133(6) of the Act to the NSE, BSE and ISE to verify the share transactions in assessee’s name. The said parties, however, replied that no trades were found to be executed in the name of the assessee during the year.
· The AO, therefore, disallowed the claim of long-term capital gain regarding the share transactions, and made the addition u/s 68 of the Act alleging the said transactions to be mere accommodation entries.
· The CIT(A), however, deleted the addition made by the AO. Aggrieved by the order of the CIT(A), the Revenue filed an appeal before the Tribunal.
· It was contended by the assessee that all transactions were genuine, were carried out through proper banking channels and were entered in the books of accounts.
· The Tribunal, after considering the above facts concluded that merely the transactions being not recorded in the name of the assessee on the floor of stock exchange, and being carried out outside the floor of stock exchange, will not hold the transactions as unlawful.
For further reading, refer the attachment.
Further Reading