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2021 (10) TMI 1251 - ITAT DELHIBogus LTCG - Addition u/s 68 - unaccounted share transaction - not eligible for exemption u/s 10(38) - legalize the unaccounted money through dubious method into white money - CIT-A deleted the addition - HELD THAT:- As the entire transaction as to purchasing and selling of 40,000 shares of M/s. Kappac Pharma Limited by the assessee company is genuine one routed through banking channel as well as SEBI, in the light of the fundamental facts that no man of ordinary prudence would invest in a company which is consistently in loss as per its annual report, the entire transaction is ingenuine. Transaction undertaken by the assessee for purchasing 40,000 shares were dubious from the very outset as assessee has purchased the shares with undisclosed money of ₹ 4,52,000/- by way of cash payment which he subsequently declared unaccounted in IDS, 2016 scheme and got the same legalized from Principal CIT. Thereafter, assessee took back the cash of ₹ 4,52,000/- from the seller and paid him cheque of the aforesaid amount on 31.12.2013 after getting the scrips dematerialized. During investigation when statement of assessee was recorded as to how he had paid the amount of ₹ 4,52,000/- and as to what is the name of the seller of the shares of M/s. Kappac Pharma Limited, he has given evasive reply making the entire transaction doubtful. Questions put to assessee during investigation and answers given thereto during his recording of statement u/s 131 Statement of the assessee recorded during investigation leads to the irresistible conclusion that the assessee has not discharged his onus to prove that the entire transaction was genuine because it is incomprehensible that a person, assessee in this case, who is constantly in touch with the person since 25.06.2012 when he has purchased the scrips by making payment through undisclosed cash, then got the scrips dematerialized on 30.12.2013 only after legalizing amount of ₹ 4,52,000/- through IDS, 2016, thereafter he got the amount of ₹ 4,52,000/- returned and paid him the amount through cheque on 31.12.2013, but strangely stated that, “I do not particularly know the parties from whom or to whom he bought and sold the shares”. Evasive reply coupled with undisputed fact narrated in the preceding para shows that the entire transactions as to purchasing and selling the shares of M/s. Kappac Pharma Limited by the assessee was not a genuine share trading transaction but has been given colour of share trading. Because the entire case is crystal clear from the undisputed facts brought on record by the assessee himself. And moreover assessee has failed to discharge the onus that the entire transaction was genuine even by suppressing the correct facts during recording of his statement u/s 131 of the Act. Entire transactions have to be examined in the light of the surrounding circumstances in order to unearth the bogus transactions of purchase and sale of shares. So, the assessee has failed to dispel all the suspicion raised by the AO to establish that the transactions in question were neither real nor beyond human probabilities. The case laws relied upon by the ld.AR for the assessee is not applicable to the facts and circumstances of the case. CIT (A) has erred in deleting the disallowance made by the AO on account of exempt LTCG claimed by the assessee u/s 10(38) of the Act, hence question decided in favour of revenue.
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