Banwari Purshottam Bhargav vs. Income Tax Officer-24(1)(3)

Parties Involved

Facts Summary

The assessee, Banwari Purshottam Bhargav, filed an appeal against the order passed by the Commissioner of Income Tax (Appeals) confirming the addition of Rs.2.47 crores relating to the sale value of shares and the addition of estimated commission expenses. The assessee had declared long-term capital gains of Rs.2.36 crores on the sale of shares of M/s Sunrise Asian Ltd. and claimed the same as exempt under section 10(38) of the Income Tax Act, 1961. The Assessing Officer (AO) considered the sale to be a pre-arranged method to generate bogus long-term capital gains, relying on the report of the Investigation Wing. The assessee argued that the transactions were genuine and supported by credible documents, and the AO did not provide an opportunity to cross-examine a person named Shri Anuj Agarwal, who confessed to providing accommodation entries for generating long-term capital gains.…

Legal Issues

• 1. Whether the long-term capital gains declared by the assessee are genuine or bogus?
• 2. Whether the sale consideration of shares can be assessed as unexplained cash credit under section 68 of the Act?
• 3. Whether the addition of estimated commission expenses is justified?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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