Where Principal Commissioner invoked revision under section 263 on ground that an information was received from DIT (Investigation) that long term capital gain (LTCG) earned by assessee on sale of shares was bogus and accordingly, disallowed claim of assessee for exemption under section 10(38) in respect of such LTCG, since assessee had filed all relevant documents in relation to LTCG which reflected occurrence of transaction of sale of shares in normal course on platform of stock exchange, impugned revision under section 263 was unjustified.

[2019] 112 taxmann.com 118 (Ahmedabad – Trib.)

Smt. Shardaben B. Patel

v.

Principal Commissioner of Income Tax, Ahmadabad*

Section 10(38), read with section 263, of the Income-tax Act, 1961 – Capital gains – Income arising from transfer of long term securities (Shares) – Assessment year 2013-14 – During year, assessee filed its return of income inter alia claiming exemption under section 10(38) on account of long term capital gains on sale of shares – Same was accepted and an assessment order was passed

– Principal Commissioner invoked revision jurisdiction under section 263 on grounds that an information was received from DIT (Investigation) that assessee was beneficiary of bogus long terms capital gain (LTCG) on sale of shares and, accordingly, exemption under section 10(38) claimed by assessee was disallowed

 – It was noted that assessee had duly produced all primary documents in relation to LTCG earned by it before Assessing Officer and these documents reflected occurrence of transactions in normal course on platform of stock exchange

– Details of information received by Principle Commissioner from DIT (Investigation) were not provided to assessee at all at any stage of proceedings

– Revisional Commissioner had remained silent on contents of interim reply filed by assessee against invocation of revision

– Whether, on facts, Commissioner was unjustified in invoking jurisdiction under section 263 so as to hold transaction of assessee of LTCG to be bogus and deny exemption under section 10(38) – Held, yes [Paras 6.3, 6.5 and 6.11] [In favour of assessee]