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TMI BlogLong-Term Capital Gains and Unexplained Cash Credits in Stock Transactions: A Legal PerspectiveX X X X Extracts X X X X X X X X Extracts X X X X ..... pertains to an appeal impugning an order passed by the Income Tax Appellate Tribunal (ITAT), concerning the treatment of long-term capital gains and unexplained cash credits under Section 68 of the Income Tax Act 1961 (the Act). This complex matter involves the interpretation of capital gains on share transactions, allegations of accommodation entries, and the application of the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alysis Treatment of Long-Term Capital Gains: The core legal issue revolves around the treatment of gains from penny stock transactions. The respondent's claim falls under the exemptions provided by the Act for long-term capital gains. The AO's classification of these gains as unexplained cash credits challenges this exemption. Application of Section 68 of the Act: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es to establish the genuineness of the transactions. Principle of Natural Justice and Fair Hearing: The respondent s opportunity to present evidence and the lack of concrete evidence from the AO against the genuineness of the transactions underscore the principles of natural justice and a fair hearing. Court's Decision and Reasoning The High Court, affirming the ITAT' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alpractices. Conclusion The High Court s decision reinforces the principle that for a transaction to be treated as an unexplained cash credit, there must be concrete and direct evidence against the genuineness of such transaction. Mere suspicion or the broker's tainted history is insufficient. This judgment is a testament to the robust evidentiary standards required in tax proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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