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DCIT v. Saurabh Mittal (Jaipur) ( 2018) 172 DTR 291/ 196 TTJ 61 (Trib),www.itatonline.org

S. 68:Cash credits- Capital gains-Penny stocks-Reliance by AO on statements recorded by the Investigation Wing to conclude that the capital gains are bogus without giving an opportunity of cross examination is a complete violation of principles of natural justice as held in CCE v.Andaman Timber Industries ( 2015 ) 127 DTR 241(SC). The AO has not controverted the evidence of purchase bills, payment of consideration through bank, DEMAT account, allotment of amalgamated shares, sale of shares through stock exchange at prevailing price, payment of STT etc- Addition cannot be made as cash credits.[ S.10 (38),45,115BBE ]

Dismissing the appeal of the revenue , reliance by AO on statements recorded by the Investigation Wing to conclude that the capital gains are bogus without giving an opportunity of cross examination is a complete violation of principles of natural justice as held in CCE  v.Andaman Timber Industries ( 2015  ) 127 DTR 241(SC). The AO has not controverted the evidence of purchase bills, payment of consideration through bank, DEMAT account, allotment of amalgamated shares, sale of shares through stock exchange at prevailing price, payment of STT etc. Addition cannot be made as cash credits.    (ITA No. 16/JP/2018, dt. 29.08.2018)(AY. 2014-15)

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