BOGUS CAPITAL GAINS: LTCG ON SALE OF SHARES VIA RECOGNISED STOCK EXCHANGE

Rajesh Singhvi and Sons (HUF) Vs ITO (ITAT Chennai)

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.Cresanda Commercial Solutions Ltd and M/s. Surabhi Chem & Investment Ltd were disallowed by the ld. Assessing Officer considering these to be penny stock companies 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 statements recorded during a survey u/s.133A of the Act in one M/s. Sikaria Share & Stock Broking Services Pvt. Ltd. for disbelieving the sale of shares in M/s.Cresanda Commercial Solutions Ltd. The assessment order also refers to statements of Mr. Deepak Patwari and Mr. Anup Maheswari, at para 4.4.2, statements of Mr. Bikas Sureka, Mr. Anil Khemka, Mr. Amit Saraogi, Mr. Sauraj Jhunjhunwala, Mr. Sajendra Mookim at page 7 and that of Mr. Sanjeev Kumar Agarwal at page 8. These were all relied on by the ld. Assessing Officer for disbelieving the claim of sale in the shares of M/s. Surabhi Chemicals and Investments Ltd. It is also not disputed that statements recorded from these persons and records relied on by the Revenue for disbelieving the claim of the sale of shares, were not put to the assessee. Undisputedly, the sale of shares were through recognized stock exchange and through a recognized stock broker.


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