Dy. CIT, Circle-2(1)(2), Ahmedabad V. Shri Ambalal Chimanlal Patel, Ahmedabad

ITA 2398/AHD/2018

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A) which had allowed the appeal of Shri Ambalal Chimanlal Patel, the respondent. The respondent had claimed long-term capital gains from the sale of shares of M/s. Naisargik Agritech (India) Ltd., which the AO treated as bogus under section 68 of the Income Tax Act, 1961. The AO's decision was based on the premise that the shares were part of a scheme to generate bogus long-term capital gains, particularly noting that the company was suspended from trading and the shares were sold shortly after trading resumed. The CIT(A) found the transactions to be genuine, a decision which the Tribunal upheld, dismissing the Revenue's appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131422 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 14-12-2022
• Assessment Year: 2015-2016
• Appeal Filed On: 09-12-2018
• Other Referred Cases: Sanjay Bimalchand Jain vs. Income Tax, Marksons Pharmaceuticals Ltd vs. Income Tax, La Opala Limited vs. Income Tax, Eitcher Limited vs. Income Tax, DCIT Vs. Sunita Khema, Commissioner of Income Tax - 1 Vs. Maheshchand G. Vakil, Commissioner of Income Tax - 1 Vs. Himani M. Vakil, PCIT vs. Smt. Krishna Devi, Achal Gupta vs. ITO, Dipesh Ramesh Vardhan vs. DCIT, Vijayrattan Balkrishan Mittal vs. DCIT, Anjana Sandeep Rathi Vs ACIT, Narayan R. Rathi vs. ITO, Parasben Kasturchand Kochar vs. ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Set aside; Capital Gains; Bogus
• Section: 68; 143(3)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: Ms. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member Th e Dy. CIT, Circle-2 (1 )(2), Ah medabad (Appellant) Vs Shri Ambalal Chi manlal Patel, 8/9 Sh iv alik Plaza, Kin tech House, Op p. AMA, IIM Road, Ahmedabad PAN: AEH PP424 8Q (Resp ondent) Asses see b y : Shri S. N. Sopa rkar, A.R. Revenue by : Shri Pooja Parekh, Sr. D. R. Date of hearing : 15-12 -2022 Date of pronouncement : 20-01 -2023 आदेश/ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This is an appeal filed by the Revenue against the order of the ld. Commissioner of Income Tax (Appeals)-2, Ahmedabad in Appeal no. CIT(A)-2/10241/ACIT, Cir. 2(1)(2)/2017-18, in proceeding u/s. 143(3) vide order dated 11/09/2018 passed for the assessment year 2015-16. 2. The Department has raised the following Grounds of Appeal:- ITA No. 2398/Ahd/2018 Assessment Year 2015-16 I.T.A No. 2398/Ahd/2018 A.Y. 2015-16 Page No. Dy. CIT vs. Shri Ambabal Chimanlal Patel 2 “1. The Ld.CIT(A) has erred in law and on facts in deleting the addition u/s 68 made by the AO treating the LTCG claimed by the assessee as bogus. 2. The appellant craves leave to amend after any ground or add a new ground which may be necessary.” 3. The brief facts leading to the present appeal are that the AO made addition of Rs.2,88,72,634/- being sale proceeds of 2 lakh shares of M/s. Naisargik Agritech (India) Ltd. u/s. 68 of the I. T. Act, 1961 on the ground that the sales and purchase of the above shares were not genuine. The appellant has purchased 2 lakh shares of M/s. Naisargik Agritech (India) Ltd. of face value of Rs.10/- for Rs.20 lacs on 15/03/2011. The appellant sold these shares from 23/06/2014 to 11/07/2014 on Bombay Stock Exchange through the broker Shri Pravin Ratilal Share & Stock Brokers Ltd. and claimed long term capital gain exempt from tax u/s. 10(38) of the Act. The AO however, did not allow the claim of long term capital gain on the ground that the purchase and sale of shares of M/s. Naisargik Agritech (India) Ltd. was carefully executed plan to generate bogus long term. The AO stated that the assessee has purchased the shares of a company which was suspended from trading at BSE from 10/04/2000 and has sold it between 3/06/2014 to 11 /07/2014 when the trading of share resumed on BSE for two to three months. The AO therefore held that the sharesof M/s. Naisargik Agritech (India) Ltd. has been used to accommodate long term capital gain beneficiaries. The AO has relied upon the case of Mumbai High Court in the case of Sanjay Bimalchand Jain in Income Tax Appeal No.18/2017 dated 10/04/2017in support of the above disallowance. I.T.A No. 2398/Ahd/2018 A.Y. 2015-16 Page No. Dy. CIT vs. Shri Ambabal Chimanlal Patel 3 4. Before Ld. CIT(A), the assessee submitted that appellant has purchased 2 lakh shares of M/s. Naisargik Agritech (India) Ltd. at a face value for a consideration of Rs.20,00,000/-. The share application was directly made to company by making payment of Rs.20,00,000/- vide cheque no.15390 dated 15/03/2011 of Union Bank of India. The share was allotted on 25/03/2011 in physical form. The shares were dematerialized with HDFC Bank vide DP1D IN 300476 Client ID 41953982 on 11/11 /2011. The assessee submitted that he had taken a calculated risk by investing in the equity share of the company at face value at the time when the trading was suspended on the BSE. The appellant submitted that he has held the share for more than three years in the Demat account and sold it on BSE after the trading of the share resumed on exchange. The assessee submitted that there is nothing unusual in the gain in the share market as there are number of companies where share price has increased from 16 times to 71 times during Financial Year 2011 to 2014. The appellant cited the case of Marksons Pharmaceuticals Ltd, where share price rose from 1.5 to Rs. 69/- in La Opala Limited from Rs.57 to Rs.1,687/-. Aventee Feets Limited from Rs.31/- to Rs. 2,124/- and Eitcher Limited from Rs. 975/- to Rs.15,733/-. The assessee also submitted that the case of Sanjay Bimalchand Jain relied by the AO is distinguishable on facts. In the above referred case, assessee has shown long term capital gain from a penny stock Kolkata based company M/s. Khoobsurat Limited. There was a clear cut modus operandi in which purchase was doubted as the purchase of share of private company was made in cash in a company controlled by Kolkata based broker. In the assessee’s case, it has purchased the share at face value at Ahmedabad and made payment of Rs.20,00,000/- by cheque and held it in I.T.A No. 2398/Ahd/2018 A.Y. 2015-16 Page No. Dy. CIT vs. Shri Ambabal Chimanlal Patel 4 the DMAT account for three years. The appellant contended that the genuineness of purchase and sales of shares are well documented, and therefore, its genuineness cannot be doubted on the facts. 5. The Ld. CIT(A) agreed with the view of the assessee and allowed the appeal of the assessee with the following observations: The AO has made the addition of Rs. 2,88,72,634/- u/s. 68 of the I. T. Act, 1961 on the sale of 2 lac shares of M/s. Naisargik Agritech India Ltd. treating them as non genuine. The appellant has submitted copy of application for shares, allotment of letter from the company, share certificates and the bank account of Union Bank of India from which payment of Rs,20,00,000/- was made vide cheque no.15390 dated 15/03/2011. The shares have been purchased at face value of Rs. 10/- each at Ahmedabad where appellant and the company are based. The purchase of shares are well documented, and payment of Rs.20,00,000/- has been made by cheque, therefore, its genuineness cannot be doubted. Appellant has dematerialised shares with HDFC Bank and held it for three years. Appellant has subsequently sold the shares on BSE when the suspension of trading of the share of the company resumed at the prevailing exchange price ranging from Rs. 150 to Rs. 160 per share in different lot between 23/06/2014 to 11/07/2014 through the broker Shri Pravin Ratilal Share & Stock Brokers Limited. The sale of share is well documented and has been made on the stock exchange at the prevailing market price and consideration has been received in cheque and accounted in I.T.A No. 2398/Ahd/2018 A.Y. 2015-16 Page No. Dy. CIT vs. Shri Ambabal Chimanlal Patel 5 the HDPC Bank. The AO has relied on the case of Bombay High Court in the case of Sanjay Bimalchand Jain in which there was a case of clear modus operandi of Kolkata based brokers to provide long term entry of bogus long term capital gain. In the above case, shares of private companies were shown to have been purchased in cash and the later company was merged in a listed company and shares of Rs. 5/- were sold @ Rs.485/-. The entire operation was managed by brokers. In the appellant's case, the purchase of share cannot be doubted as shares have been purchased directly from company at Ahmedabad where both appellant and the company are based, by making payment in cheque. The shares have been held in DMAT account for more than three years. There have been other cases also in which DIT (Inv.), Kolkata has conducted detailed inquiries and established the modus operandi of long term bogus capital gain in Kolkata based company where shares have been shown to be purchased in cash and sold just after one year to book bogus long term capital gain. The appellant's case is at different footing as the purchase of shares is well established arid the same cannot be doubted. The AO's reliance that certain company has shown capital loss of Rs. 1 crore on sale of shares of M/s. Naisargik Agritech India Ltd. does not by itself prove that the purchase and sales of appellant is not genuine. The addition u/s. 68 on long term capital gain cannot be made merely on suspicion and on high capital gain. Appellant has submitted number of share scripts listed on the stock exchange in which there have been gain from 16 to 71 times between the Financial Year 2011 to 2014, For instance, the shares of I.T.A No. 2398/Ahd/2018 A.Y. 2015-16 Page No. Dy. CIT vs. Shri Ambabal Chimanlal Patel 6 Marksons Pharmaceuticals Ltd. which were priced at Rs.2.70 per share in March, 2011 has rose to Rs.50 per share in August, 2014 which has gone up by 18 times. The long term capital gain in the penny stock companies are to be examined on its own facts. In appellant's case, there is no material brought out by the AO to suggest that the purchase and sales of the shares were bogus. The Honourable Kolkata Tribunal in the case of DCIT Vs. Sunita Khema in ITA No.714 to 718/KOL/2011 has held that the AO cannot treat transaction as a bogus only on the basis of suspicion or surmise. He has to bring material on record to support his findings that there has been collusion / connivance between the broker and the assessee for the introduction of its unaccounted money. A transaction of purchase and sale of shares supported by contract notes, DMAT accounts and account payee cheque cannot be treated as bogus. The Honourable Gujarat High Court in the case of Commissioner of Income Tax - 1 Vs. Maheshchand G. Vakil [140 Taxmann.com 326] has held that where assessee prove genuineness of share transactions by contract notes for sales and purchase, bank statement of broker, DMAT accounts showing transfer in and out of shares as also abstract of transactions furnished by stock exchange, AO is not justified in treating capital gain arising from sale of shares as unexplained cash credit. In the similar case, Honourable Gujarat High Court in the case of Commissioner of Income Tax - 1 Vs. Himani M. Vakil [10 Taxmann.com 326] has held that where assessee duly prove genuineness of share transaction by bringing on record contract notes for sale and purchase, bank statement of broker and DMAT accounts I.T.A No. 2398/Ahd/2018 A.Y. 2015-16 Page No. Dy. CIT vs. Shri Ambabal Chimanlal Patel 7 showing transfer in and out of shares, AO was not justified in bringing to tax capital gain arising from sale of shares as unexplained cash credit. In view of the above facts, AO was not justified to make the addition u/s. 68 of the I. T. Act, 1961 of sale proceeds of shares of Rs.2,88,72,634/- held for more than three years. The addition made by the AO is accordingly deleted. The ground of appeal is accordingly allowed. 6. The Department is in appeal before us against the order passed by Ld. CIT(A) allowing the appeal of the assessee. The DR primarily relied upon the observations made by the AO in the assessment order and submitted that in the instant facts, the capital gains which has been made by the assessee are bogus, and hence liable to be disallowed. In response, the counsel for the assessee reiterated the submissions made before Ld. CIT(A). He submitted that the assessee is an individual earning income from salary and income from other sources. He is also earning agricultural income. The assessee is not a regular investor and nor an expert in share investment and took a calculated risk by making investments in the stock. The counsel for the assessee drew attention to the fact that the payment for shares have been made by way of cheques. The shares were first allotted in physical format and then later converted to Demat account of HDFC bank held by the assessee. The shares were then kept in Demat account for the period of three years by the assessee and then sold. He drew our attention to memos of stockbroker and submitted that the shares were sold through renowned stock broking firms. The counsel for the assessee further submitted that the AO during the course of assessment did not make any independent enquiry on I.T.A No. 2398/Ahd/2018 A.Y. 2015-16 Page No. Dy. CIT vs. Shri Ambabal Chimanlal Patel 8 allotment of shares of Naisargik Agritech to the assessee. The AO did not make enquiry whether Naisargik Agritech is a genuine company or not. The additions were only made on account of suspicion that since the trading in respect of the above shares were suspended by the stock exchange, the share transaction made by the assessee is bogus. In this case, the AO has not examined the company Naisargik Agritech or any of its Directors to ascertain its genuineness. Further, the counsel for the assessee drew attention to page 59 of the paper book and submitted that besides the above share, the assessee has also made investment is in approximately 15 more companies. Therefore, it cannot be stated that just because the assessee has taken a calculated risk in one of the companies, the transaction is bogus and the assessee should not be denied benefit of long-term capital gains in respect of such transaction. 7. We have heard the rival contentions and perused the material on record. In the case of Parasben Kasturchand Kochar [2021] 130 taxmann.com 177 (SC), the assessee-individual was engaged in business of trading in shares claimed long term capital gains arising out of sale of shares as exemption under section 10(38). The Assessing officer denied claim and made certain additions into assessee's income on grounds that said gains were earned through bogus penny stock transactions and companies to whom sold shares belonged were bogus in nature. The Tribunal observing that assessee by submitting records of purchase bills, sale bills, demat statement, etc., had discharged his onus of establishing said transactions to be fair and transparent, same not being earned from bogus companies was eligible for exemption under section 10(38) of the Act. The High court by I.T.A No. 2398/Ahd/2018 A.Y. 2015-16 Page No. Dy. CIT vs. Shri Ambabal Chimanlal Patel 9 impugned order held that no substantial question of law arose from Tribunal's order. The SC dismissed the SLP against said impugned order. In the above case, the Gujarat High Court while passing the order observed as under: 2. We take notice of the fact that the issue in the present appeal is whether the assessee earned long term capital gain through transactions with bogus companies. In this regard, the finding of fact recorded by the Tribunal in paras 9, 10 and 11 reads thus:— "9. In our considered opinion, in such case assessee cannot be held that he earned Long Term Capital gain through bogus company when he has discharged his onus by placing all the relevant details and some of the shares also remained in the account of the appellant after earning of the long term capital gain. 10. Learned A.R. contention is that no statement of the Investigation Wing was given to the assessee which has any reference against the assessee. 11. In support of its contention, learned A.R. also cited an order of Coordinate Bench in ITA No. 62/Ahd/2018 in the matter of Mohan Polyfab (P.) Ltd. v. ITO wherein ITAT has held that A.O. should have granted an opportunity to cross examine the person on whose statement notice was issued to the assessee for bogus long term capital gain. But in this case, neither statement was supplying to the assessee nor cross examination was allowed by the learned A.O. Therefore, in our considered opinion, assessee has discharged his onus and no addition can be sustained in the hands of the assessee." 3. Thus, the Tribunal has recorded the finding of fact that the assessee discharged his onus of establishing that the transactions were fair and transparent and further, all the relevant details with regard to such transactions were furnished before the Income-tax authorities and the Tribunal also took notice of the fact that some of the shares also remained in the account of the appellant. 7.1 In the case of Himani M. Vakil [2014] 41 taxmann.com 425 (Gujarat), the Gujarat High Court held that where assessee duly proved genuineness of share transactions by bringing on record contract notes for I.T.A No. 2398/Ahd/2018 A.Y. 2015-16 Page No. Dy. CIT vs. Shri Ambabal Chimanlal Patel 10 sale and purchase, bank statement of broker and demat account showing transfer in and out of shares, Assessing Officer was not justified in bringing to tax capital gain arising from sale of shares as unexplained cash credit. 7.2 In the case of Maheshchandra G. Vakil [2013] 40 taxmann.com 326 (Gujarat), the Gujarat High Court held that where assessee proved genuineness of share transactions by contract notes for sale and purchase, bank statement of broker, demat account showing transfer in and out of shares, as also abstract of transactions furnished by stock exchange, Assessing Officer was not justified in treating capital gain arising from sale of shares as unexplained cash credit. 7.3 In the case before us, the Assessing Officer has not doubted the purchase of shares were through banking channels. The assessee has placed on record copies of contract memos in connection with purchase and sale of shares. Besides the above shares, the assessee has also held shares of 15 other companies as well. As stated above, the appellant has held the shares for over 3 years and it would be incorrect to treat sale of shares as bogus merely on the basis of suspicion and on account of fact that a substantial quantum of capital gains has been made by the assessee or that the trading in respect fo the said share was suspended for some time on the stock exchange. In the present case, no material has been brought on record to suggest that purchase and sale of shares were bogus. The ld. Assessing Officer has not brought any material to support his finding that there has been collusion or connivance between the broker and the assessee for the introduction of his own unaccounted money. In the present case, despite the I.T.A No. 2398/Ahd/2018 A.Y. 2015-16 Page No. Dy. CIT vs. Shri Ambabal Chimanlal Patel 11 assessee’s specific request, no opportunity of cross examination was provided to the assessee on the basis of whose statements reliance has been placed to hold that the sale of shares was sham / bogus. It would be useful at this stage to refer to some judgments which have dealt with the issue before us: (i) In the case of PCIT vs. Smt. Krishna Devi, ITA No.125/2020 , the Delhi High Court vide order dated January 27, 2021 held that the fact that there was an astounding jump in the share price within two years, which is not supported by the financials, does not justify the AO's conclusion that the assessee converted unaccounted money into fictitious exempt LTCG to evade taxes. The finding is unsupported by material on record & is purely an assumption based on conjecture. The relevant extract of the judgment is reproduced for ready reference: 12. Mr. Hossain’s submissions relating to the startling spike in the share price and other factors may be enough to show circumstances that might create suspicion; however the Court has to decide an issue on the basis of evidence and proof, and not on suspicion alone. The theory of human behavior and preponderance of probabilities cannot be cited as a basis to turn a blind eye to the evidence produced by the Respondent. ....... 13. The learned ITAT, being the last fact-finding authority, on the basis of the evidence brought on record, has rightly come to the conclusion that the lower tax authorities are not able to I.T.A No. 2398/Ahd/2018 A.Y. 2015-16 Page No. Dy. CIT vs. Shri Ambabal Chimanlal Patel 12 sustain the addition without any cogent material on record. We thus find no perversity in the Impugned Order. (ii) The Lucknow ITAT in the case of Achal Gupta vs. ITO (ITAT Lucknow) I.T.A. No.501/Lkw/2019 held that the documents demonstrates that the assessee had purchased shares through Brokers for which the payment was made through banking channels. The assessee had sold shares through an authorized stock broker and payment was received through banking channels after deduction of STT. The AO has not doubted any of the documents. The only objection raised is that the scrip from which the assessee had earned Long Term Capital Gain has been held by the Investigation Wing of the Revenue to be a paper entity and that this scrip was being used for creating artificial capital gain. The objection was not found to be acceptable. (iii) The Mumbai ITAT in the case of Dipesh Ramesh Vardhan vs. DCIT (ITAT Mumbai) I.T.A. No.7648/Mum/2019 held that the AO has not discharged the onus of controverting the documentary evidences furnished by the assessee and by bringing on record any cogent material to sustain the addition. The allegation of price rigging / manipulation has been levied without establishing the vital link between the assessee and other entities. The whole basis of making additions is third party statement and no opportunity of cross-examination has I.T.A No. 2398/Ahd/2018 A.Y. 2015-16 Page No. Dy. CIT vs. Shri Ambabal Chimanlal Patel 13 been provided to the assessee to confront the said party. As against this, the assessee's position that the transactions were genuine and duly supported by various documentary evidences, could not be disturbed by the revenue. (iv) The Delhi ITAT in the case of Suresh Kumar Agarwal vs. ACIT, ITA No 8703/Del/2019 held that the assessee has produced contract notes, demat statements etc & discharged the onus of proving that he bought & sold the shares. The AO has only relied upon the report of the investigation wing alleging the transaction to be bogus. The ITAT held that the AO ought to have examined a number of issues (which are enumerated in the order) and shown that the transaction is bogus. The capital gains are genuine and exempt from tax. (v) The Mumbai ITAT in the case of Vijayrattan Balkrishan Mittal vs. DCIT, ITA No.3311/Mum/2019 held that the fact that a scam has taken place in some penny stocks does not mean that all transactions in penny stocks can be regarded as bogus. In deciding whether the claim is genuine or not, the authorities have to be guided by the legal evidence and not on general observations based on statements, probabilities, human behavior, modus operandi etc. The AO has to show with evidence the chain of events and live link of the assessee's I.T.A No. 2398/Ahd/2018 A.Y. 2015-16 Page No. Dy. CIT vs. Shri Ambabal Chimanlal Patel 14 involvement in the scam including that he paid cash and in return received exempt LTCG gains. 7.4 Notably in the case of Anjana Sandeep Rathi Vs ACIT (ITAT Mumbai) in ITA. No. 4369/MUM/2018, the ITAT Mumbai held that LTCG on sale of shares of M/s Sunrise Asian Limited was not bogus/ sham transaction. While adjudicating in favour of the assessee, observed as under: 5. We have heard the submissions made by rival sides and have perused the orders of authorities below. The assessee in appeal has assailed the findings of CIT (A) in disallowing benefit of section 10(38) of the Act on long term capital gain arising from sale of shares. The assessee during the relevant period had sold shares of M/s. Sunrise Asian Ltd. for a consideration of Rs.14,99,917/-. The authorities below held the sale transaction in aforementioned scripts as bogus and thus, made addition under section 68 of the Act. We find that similar disallowance was made in the case of Narayan R. Rathi (father-in-law of the present assesse/appellant) for the assessment year 2014-15. Narayan R. Rathi had also sold the shares of same company i.e. M/s. Sunrise Asian Ltd. The issue travelled to the Tribunal. The Co-ordinate Bench of the Tribunal in ITA No. 4811/Mum/2018 (supra) deleted the addition. The Tribunal while allowing the appeal of Narayan R. Rathi held that the principles of natural justice were violated, the benefit of cross examination was not afforded to the assessee, hence, the addition is unsustainable. I.T.A No. 2398/Ahd/2018 A.Y. 2015-16 Page No. Dy. CIT vs. Shri Ambabal Chimanlal Patel 15 The relevant extract of the finding of Tribunal are reproduced herein below:- “11. The authorities below have not doubted the documentary evidence produced by the assessee to prove the genuineness of the transaction of sale and purchase of the shares in question. Further, the authorities below have not pointed out any evidence on record to hold that the assessee has obtained bogus entries in connivance with entry operators and brokers etc., in order to claim bogus LTCG. As pointed out by the Ld. counsel, the assessee was not given an opportunity to cross examine the witnesses whose statements were relied upon and on the basis of their statements it was concluded that the transaction in question was a part of penny stock scam. So, in view of the cases discussed in the foregoing paras, particularly the ratio laid down by the Hon’ble Supreme Court in the case of M/s Andaman Timber Industries (supra), we are of the considered view that the Ld. CIT (A) has wrongly confirmed the assessment order passed by the AO in violation of the principles of natural justice. Hence, the impugned order passed by the Ld CIT (A) suffers from legal infirmity. We, therefore, allow the sole ground of appeal of the assessee and set aside the impugned order passed by the Ld. CIT (A). Accordingly, we direct the AO to allow the claim of the assessee.” 6. The ld. Departmental Representative has failed to controvert the findings of Tribunal in the case of Shri Narayan R. Rathi whose case is on the same pedestal with identical set of facts. In fact a perusal of the assessment order in the case of assesse reveal that the Assessing I.T.A No. 2398/Ahd/2018 A.Y. 2015-16 Page No. Dy. CIT vs. Shri Ambabal Chimanlal Patel 16 Officer in para 8.3 has observed that 3000 shares were jointly held by the assesse and Narayan Ramachandra Rathi. The facts of present case are similar to the facts of case in the case of Narayan R. Rathi decided by the Co-ordinate Bench. No distinction in facts has been brought to our knowledge by the Department. Thus, for the parity of reasons, addition made under section 68 of the Act deserves to be deleted. Further, the Assessing Officer is directed to allow the benefit of section 10(38) of the Act to the assessee. 7. In the result, the appeal of the assessee is allowed. 7.5 In light of the above decisions, we are of the considered view that Ld. CIT(A) has not erred in law and in facts in allowing the assessee’s appeal. 8. In the result, the Revenue’s appeal is dismissed. Order pronounced in the open court on 20-01-2023 Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 20/01/2023 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. I.T.A No. 2398/Ahd/2018 A.Y. 2015-16 Page No. Dy. CIT vs. Shri Ambabal Chimanlal Patel 17 By order/आदेश से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद