· The AO made an addition of Rs.31,10,915/- holding that the long-term capital gain earned by the assessee on its investment in the shares of M/s HPC Biosciences Ltd. was not genuine and represented the unaccounted income of the assessee.
· The CIT(A) stated that the rise in value of the shares was abnormal over a period of 13 to 14 months, and realization of such capital gain without any past experience in trading of shares raised a very strong suspicion so as to question the authenticity of the transaction. Thus, the CIT(A) also confirmed the addition made by the AO holding that the transaction was against human probability.
· The Tribunal took note of the fact thatthe assessee has shown LTCG from sale of 6000 shares of M/s HPC Biosciences Limited and the same has been claimed as exempt u/s 10(38) of the Act. Tribunal further observed that the assessee had submitted all documentary evidences in support of sale and purchase of shares. The ITAT also took note of the fact that the entire transaction was through banking channel and the rejection by the AO as well as the CIT(A) treating the transaction as bogus long-term capital gain was without any basis.
· ITAT further noted that the AO and the CIT(A) relied upon the statement recorded by the Investigation Wing, Kolkata, which had no nexus with the case of assessee.
· Therefore, relying upon the recent judgment of Hon’ble High Court of Punjab & Haryana in the case of Pr. CIT v. Prem Pal Gandhi in ITA No. 95 of 2017 dated 18.01.2018, the Tribunal concluded that considering the facts and circumstances in the case of assessee and the ratio laid down by the said judgment, the addition made by the AO and sustained by the CIT(A) was to be deleted.
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Further Reading