2013 (6) TMI 894 - AT - Income Tax

Summary

Issues Involved:
1. Deletion of addition of Rs. 14,59,240 made by the AO on the finding that the share transactions were not genuine.

Summary:

Issue 1: Deletion of Addition of Rs. 14,59,240 by AO

The Department's appeal challenges the CIT(A)'s order dated 15-07-2011, which deleted the addition of Rs. 14,59,240 made by the AO. The AO had considered the share transactions as non-genuine, citing several reasons including SEBI's findings of manipulation in the trading of M/s Shree Nidhi Trading Co. Ltd., the involvement of a broker running a racket of providing accommodation entries, and the assessee's failure to produce vital evidence like the Contract Note in Form A.

The assessee argued that the shares were purchased through the stock exchange and reflected in the DEMAT account, and the transactions were genuine. The CIT(A) accepted the assessee's contentions, noting that the DEMAT account showed the shares and the AO had not provided any adverse findings about the DEMAT account. The CIT(A) also pointed out that similar transactions were accepted in the case of Miracle Carriers and Trading Co.

The Tribunal considered the submissions and evidence, including the DEMAT account, contract notes, and the fact that the shares were held for more than one year and sold through the stock exchange with applicable taxes paid. The Tribunal concluded that the transactions were genuine and the Long Term Capital Gain was rightly claimed as exempt u/s 10(38) of the Act. Therefore, the Tribunal upheld the CIT(A)'s decision and dismissed the Department's appeal.

Conclusion: The appeal filed by the Revenue is dismissed.