9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (5) TMI 851 - AT - Income TaxExemption u/s.10(38) - income from capital gains from purchase and sale of shares - sale of equity shares - assessee has shifted from the IPOs - decision final and binding on a Single Member Bench of the Tribunal - HELD THAT - There is no dispute that the assessee earns her income from transaction in shares. Just because the assessee has shifted from the IPOs and has made a purchase of the shares in M/s Panchshul Marketing Ltd., would not shift the head of income from capital gains to the Adventure in the nature of trade , insofar as the assessee is an investor in the shares and is not in the business of dealing in shares. This being so, the decision relied on by the DR would no more survive for consideration. The revenue did not challenge the factual finding of the coordinate bench of the Tribunal in the case of Deepansu Mohapatra 2021 (12) TMI 1425 - ITAT CUTTACK in regard to the claim of deduction/s.10(38) of the Act. By not challenging the merits of the addition, the revenue has accepted the decision (supra). In these circumstances, the decision of the coordinate bench of the Tribunal on merits in the case of Deepansu Mohapatra (supra) have become final and binding on a Single Member Bench of the Tribunal as the said decision has been rendered by a Division Bench of this Tribunal. Respectfully following the decision of the coordinate bench of the Tribunal in the case of Deepansu Mohapatra (supra), which has also been affirmed by the Hon ble Jurisdictional High Court of Orissa 2023 (2) TMI 392 - ORISSA HIGH COURT in the appeal filed by the revenue, the addition as made by the AO and as confirmed by the CIT(A) in respect of the claim of exemption u/s.10(38) of the Act in respect of sale of shares of M/s Kailash Auto, stands deleted. Decided in favour of assessee.
Issues Involved:
1. Whether the assessee's claim for exemption under Section 10(38) of the Income Tax Act, 1961, on long-term capital gains from the sale of shares is valid. 2. Whether the transaction of purchase and sale of shares by the assessee is genuine or a premeditated arrangement to evade taxes. Summary: Issue 1: Exemption under Section 10(38) of the Income Tax Act, 1961 - The assessee, an individual deriving income from capital gains through the purchase and sale of shares, claimed exemption under Section 10(38) for the assessment year 2014-2015. - The assessee purchased 1 lakh shares of M/s Panchshul Marketing Ltd. at Rs.1/- per share, which were later amalgamated with M/s Kailash Auto, resulting in the issuance of 1 lakh shares of M/s Kailash Auto. - The shares were sold through a recognized stock exchange after holding them in a demat account for over 12 months, and Securities Transaction Tax (STT) was paid. - The coordinate bench of the Tribunal in similar cases, such as Deepansu Mohapatra & Others, held that the assessee was entitled to the exemption under Section 10(38) as the transactions were genuine and supported by documentary evidence. - The Tribunal found that the addition made by the Assessing Officer (AO) was based on mere suspicion without any cogent material, and thus, the exemption under Section 10(38) was valid. Issue 2: Genuineness of the Transaction - The AO and CIT(A) had treated the long-term capital gains as bogus, alleging that the assessee introduced unaccounted income in the guise of long-term capital gains. - The Tribunal noted that the assessee had provided substantial documentary evidence, including purchase through account payee cheques, holding shares in a demat account, and selling through a recognized stock exchange. - The Tribunal referenced several judicial precedents, including decisions by the Hon'ble Supreme Court and High Courts, which emphasized that suspicion alone cannot discredit genuine transactions backed by documentary evidence. - The Tribunal also highlighted that the revenue's appeal against the decision in Deepansu Mohapatra was dismissed by the Hon'ble Jurisdictional High Court of Orissa, affirming the Tribunal's findings. - The Tribunal concluded that the AO's findings were based on assumptions and lacked concrete evidence, thereby directing the AO to not treat the long-term capital gains as bogus and delete the consequential addition. Conclusion: - The Tribunal allowed the appeal of the assessee, holding that the transactions were genuine and the exemption under Section 10(38) was rightly claimed. - The addition made by the AO and confirmed by the CIT(A) was deleted.
|
