Assessee had applied for 1,50,000 equity shares of 10 each of Pine Animation Ltd (PAL ) in the preferential issue of shares . Payment was made by Cheque on 9-3 -2013 . The shares were disclosed in the balance sheet. Shares were split in to Rs \u00a01 per share by PAL on 21-5 -2013 which was demated . Assessee sold the shares through broker Geojit\u00a0 on which STT charges were paid . The assesse claimed long term capital gain as exempt u\/s 10 (38 ) of the Act. The AO made addition u\/s 68 of the Act and denied the exemption . \u00a0The AO held that the the appellant has gained\u00a0 return of 9362. 45 % . \u00a0ie. \u00a0\u00a010 Rs share was sold at an average price of 946. 24 per share \u00a0which is un realistic . CIT (A) affirmed the order of the AO. On appeal \u00a0allowing the appeal the Tribunal held that , addition cannot be made on presumptions . Relied on the observation of Supreme Court in Lalchand Bhagt Ambica Ram v. CIT ( 1959 ) 37 ITR 288 ( SC) , Tribunal also relied on the\u00a0 ratio of supreme Court\u00a0 on the propostion that just the modus operendi\u00a0 , generalisation , preponderance of human probalibities\u00a0 cannot be the only basis for rejecting the claim of the aseessee . Unless specific evidence is brought on record to controvert the valdidity and correctness of the documents evidences produced , the same cannot be rejected by the\u00a0 assessee. Tribunal relied on the ratio of following case laws , Omar Salay Mohamed Sait v CIT (1959) 37 ITR 151( SC) wherein the court held that no addition can be made on the basis of surmises\u00a0 , suspicion and conjectures . In the case of CIT v. Dault Ram\u00a0 Rawatmull\u00a0 (1973 ) 87 ITR 349 ( SC)\u00a0\u00a0 the honourable supreme Court held that , the onus to prove that the apparent is not real on the party who claims to be so. The burden of proving a transaction to be bogus has to be strictly discharged by adducing legal evidence , which would directly prove the fact of bogusness or establish circumstances unerringly raising\u00a0 interference to that effect. The Hourable Supreme Court in the case of Umacharn Shaw & Bros\u00a0 v .CIT ( 1959 ) 37 ITR 271 ( SC)\u00a0 held that suspicion howsoever strong , cannot take place of evidence . Accordingly the addition was delted . In one of the assessee as no incriminating material was found during the search . The addition was deleted following the Bombay High Court decision in CIT v. \u00a0Continetal ware housing Corporation ( Nava Sheva ) Ltd ( 2015) 374 ITR 645\u00a0 ( Bom )( HC) \u00a0\u00a0and All Cargo Logistics vide appeal Civil 8546 of 2015 SLP 5254 of 2016 . \u00a0( AY. 2012 -13, 2013 -14 , 2014 -15)<\/p>\n
\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 68 : Cash credits – Penny stock \u2013 Accomodation entries \u2013 Sale of shares \u2013 Capital gains \u2013 Exemption \u2013 Addition cannot be made on presumption \u2013 Entitle to exemption \u2013 When no incriminating material was not found in the course of search , no addition can be made \u2013 Estimation of commission was also deleted . [ S.10 (38) 45 , 69C , 132 ,133(6), 153A] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-19694","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-57E","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/19694","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=19694"}],"version-history":[{"count":8,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/19694\/revisions"}],"predecessor-version":[{"id":19744,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/19694\/revisions\/19744"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=19694"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=19694"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=19694"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}