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TMI Blog2018 (11) TMI 1625X X X X Extracts X X X X X X X X Extracts X X X X ..... ng genuineness of the claim of long term capital gains requires to be restored to the ld. Assessing Officer for reconsideration after granting assessee adequate opportunity to substantiate its case. Revenue has to furnish to the assessee all the statements relied on by them. Hon ble Apex Court in the case of CIT vs. Sunita Dhadda, [ 2018 (3) TMI 1610 - SC ORDER] , has affirmed a judgment of Hon ble Rajasthan High Court in the case of CIT vs.Smt. Sunita Dhadda [ 2017 (7) TMI 1164 - RAJASTHAN HIGH COURT] , where the importance of providing an opportunity to cross examine the witness has been stressed. Their lordship held that this was an important constituent of natural justice. Only after all the steps required under law is complete, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of ₹ 10/- each, was split by the said company into shares of face value ₹ 1/- each, resulting in assessee s holding going upto 2,50,000 shares. Out of these, as per the ld. Authorised Representative, assessee had effected an online sale of 25,000 shares on 14.08.2013, for a consideration of ₹ 8,76,750/-, through a registered share broker called M/s.Lodha Securities Ltd. Submission of the ld. Authorised Representative was that the gains of ₹ 8,74,250/- arising from sale of these shares, which were held for more than twelve months, was not allowed exemption u/s.10(38) of the Act. According to him, whole of the consideration received on sale was treated as income under the head income from other sources . As pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the issue might be required to be remitted back to the ld. Assessing Officer, so that due process of law is followed. 4. We have considered the rival contentions and perused the orders of the authorities below. Claim of the assessee for exemption u/s.10(38) of the Act, on alleged long term capital gains arising on sale of shares of M/s.Essar India Ltd was disallowed by the ld. Assessing Officer considering this to be a penny stock company and alleging assessee s failure to bring evidence with regard to the genuineness of the transactions. It is not disputed by the ld. Departmental Representative that Revenue had relied on various statements recorded from various persons and records impounded during surveys u/s.133A of the Act me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to have provided bogus Long Term Capital Gains to his clients. The said Shri Ashok Kumar Kayan also allegedly seems to have provided the assessee s name and PAN as one of the beneficiaries. However, this statement given by Shri Ashok Kumar Kayan cannot be the foundation for the purpose of assessment in so far as Shri Ashok Kumar Kayan has not been provided to the assessee for cross-examination. In the absence of opportunity of cross-examination, the statement remains mere information and such information cannot be foundation for assessment. 10. Admittedly, the assessee has claimed to have purchased 15000 shares from M/s.BPL @ ₹ 20/- per share totaling into ₹ 3,00,000/-. The assessee claims to have paid cash for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s an investor and has been regularly trading in shares. If this is so, does the demat account show such transactions being done by the assessee or is this the only one of transaction. Thus, clearly the facts required for adjudicating the appeals are not forthcoming. There is no evidence whatsoever to show that the assessee has held the shares for more than 12 months. This is because assuming that the demat has been done and the shares of M/s.BPL has come into the assessee s demat account and has immediately flown out. Then the factum of the possession of the shares for more than 12 months have to be proved by the assessee. This is also not forthcoming. In reply to a specific query, as the date of the demat of shares, it was submitted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken the transaction of the purchase and sale of the shares which would include the subbroker, friend and the broker through whom the transaction has been done, before the AO for examination . In line with the above, we are of the opinion that question regarding genuineness of the claim of long term capital gains requires to be restored to the ld. Assessing Officer for reconsideration after granting assessee adequate opportunity to substantiate its case. Revenue has to furnish to the assessee all the statements relied on by them. Useful reference may be made to the law laid down by Hon ble Apex Court in the case of CIT vs. Sunita Dhadda, SLP (Civil ) No.9432/2018, dated 28.03.2018, while affirming a judgment of Hon ble Rajasthan H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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