THE PR. COMMISSIONER OF INCOME TAX (CENTRAL), LUDHIANA Vs. SH. HITESH GANDHI, BHATTI COLONY, CHANDIGARH ROAD, NAWANSHAHAR

JUDGEMENT

(1.) This appeal has been preferred by the appellant-revenue under Section 260-A of the Income Tax Act, 1961 (in short, "Act") against the order dated 20.07.2016, Annexure A-III, passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (in short, " the Tribunal") in ITA No.129(Asr)/2014, for the Assessment Year 2008-09, claiming following substantial questions of law.

(2.) A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. During the course of assessment proceedings under Section 153A read with Section 143 (3) of the Act, it was noticed by the Assessing Officer that the assessee had shown long term capital gain on sale of shares of a company M/s GeeFCee Finance Limited during the year under assessment. The assessee submitted that he had purchased one lakh shares of GeeFCee Finance Limited through a broker of Karol Bagh, New Delhi at a price of Rs. 11/- per share. The amount of Rs. 11 lakhs was claimed to have been paid out of cash in hand available with the assessee for the purchase of these shares. It was claimed that the shares transferred in name of assessee were subsequently sold during the year relevant to the assessment year under assessment for Rs. 2,89,94,516. The assessee had shown long term capital gain of Rs. 2,78,26,685/- on the sale of these shares. The assessee could substantiate the genuineness of the said share transaction. He was even able to prove the source of investment of Rs. 11 lakhs in the purchase of these shares. The Assessing Officer vide order dated 17.08.2012, Annexure A-I, treated the share transaction as non-genuine transaction and the amount of Rs. 2,78,26,685/- shown as long term capital gain on share transaction, was added to the income of the assessee. Aggrieved, by the assessment order dated 17.08.2012, the assessee filed appeal before the Commissioner of Income Tax (Appeals), Ludhiana [CIT(A)] . Vide order dated 30.12.2013, Annexure A-II, the CIT(A) deleted the addition of Rs. 2,78,26,685/- holding that department failed to prove that the sale of shares was sham transaction. The appeal was thus, partly allowed. Not satisfied with the order passed by the CIT(A), the revenue filed appeal before the Tribunal. Vide order dated 20.07.2016, Annexure A-III, the Tribunal upheld the order passed by the CIT(A) and dismissed the appeal of the revenue. Hence, the instant appeal by the appellant-revenue.

(3.) We have heard the learned counsel for the appellant.