ITAT directs Re adjudication with respect to  Denial of LTCG incurred from Sale of Shares without Analyzing Proper Evidence [Read Order]

The Mumbai bench Income Tax Appellate Tribunal ( ITAT ) directs re adjudictaion with respect to the denial of Long Term Capital Gain ( LTCG ) incurred from the sale of shares without analyzing proper evidence.

The assessee Rajesh Lakhmshi Nisar is engaged in the business. After filing the return of income, the assessee case was selected for scrutiny. The Assessing Officer  on perusal of the information found that the assessee has claimed Long Term Capital Gains( LTCG ) on sale of share of M/s Cressanda Solutions Ltd under Section 10(38) of the Income Tax Act of Rs. 44,08,310/- and the assessee was asked to furnish the details .

Whereas the AO has dealt with the information of the investigation wing ITBA data, BSE data and investigation wing report and has called for the purchase confirmation, sale contract notes, bank statement and demat Account Statement in respect of shares purchase and sale transactions.

After examining the details of the share purchase the AO finds that there is no correlation of the share price rise and the performance of the company. Finally the AO was not satisfied with the explanations and material information and observed that the transactions are not genuine and made addition as unexplained cash credit under Section  68 of the Income Tax Act

Aggrieved by the order assesee filed an appeal before the CIT( Appeal ). The CIT(A) dismissed the appeal filed by the assessee . Thereafter the assessee filed an appeal before the tribunal.

During the appeal proceedings Ajay R. Singh,  counsel appearing for the assessee submitted that purchase & sale of shares are genuine and the assessee has substantiated with various details with the both the authorities.

Shakuntala.N.Shet, Counsel for revenue argued that share transactions are dubious, not genuine and are doubted Thus he supported the order of the CIT(A) and relied on the submissions and report.

The tribunal observed that the evidence played an important role in decision making in the adjudicating proceedings.During the proceedings the assessee  has filed the application for admission of additional evidences under Rule 29 of ITAT rules with ITR for A.Y.2012-13 & ITR for A.Y.2013-14 along with the computation of total income, balance sheet and profit & loss account and Annual Audit Report of cressenda solutions Ltd as on 31-03-2014. Which were not available earlier and could not be produced before the lower authorities.

After analyzing the submission of both parties, the single  bench of  Pavan Kumar Gadale, Judicial ( Member )to meet the ends of justice, set aside the order of the CIT(A) and restore the entire disputed issues with respect to the Denial of LTCG incurred form share purchase  along with the additional evidence to  the file of the assessing officer.

To Read the full text of the Order CLICK HERE

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