SRINIVAS SHAH RADRARAJU ,HYDERABAD V. DY. COMMISSIONER OF INCOME TAX , CIRCLE-2(1), HYDERABAD

ITA 957/HYD/2019

AI Insights

The case revolves around the assessment of long-term capital gains declared by the assessee, Srinivas Shah Rudraraju, from the sale of shares of Turbotech Engineering Ltd., which were alleged to be bogus by the tax authorities. The Assessing Officer made additions under section 68 of the Income Tax Act, treating the gains as unexplained cash credits, based on an investigation report and interim SEBI order suspending trading in the shares. The CIT(A) upheld these additions. However, the Tribunal, referencing a similar case and the final SEBI order which contradicted the interim findings, ruled in favor of the assessee, emphasizing the lack of concrete evidence linking the assessee to any wrongdoing and the procedural lapses in the assessment process.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472528 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2014-2015
• Other Referred Cases: Ishoo Narang Vs. DCIT, Mohan Polyfab Pvt. Ltd. Vs. ITO, Gajjam Chinna Yellappa vs. Income Tax Officer, Pullangode Rubber Produce Co. Ltd vs. State of Kerala, CIT vs. S Kadar Khan & Sons, PCIT vs. Parasben Kasturchand Kochar, CIT (Central) vs. Sunita Dhadda, Anirudh Venkata Ragi vs Income Tax Officer, Shri Govind Kumar Agarwal vs. Income Tax Officer
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHIN KUMAR
• Assessee Lawyers: P. MURALI MOHAN RAO
• Keywords: Set aside; Difference of opinion; Change of opinion; Question of law; Corroborative evidences; Unexplained cash credit; Unexplained expenditure; Retraction; Capital Gains; Tangible material; Bogus
• Section: 147; 68; 131; 133A; 20

Judgement Text

" आयकर अपीलीय अधिकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B’ Bench, Hyderabad Before Shri Manjunatha G., Accountant Member and Shri K.Narasimha Chary, Judicial Member आ.अपी.सं /ITA No.957/Hyd/2019 (निर्धारण वर्ा/Assessment Year: 2014-15) Srinivas Shah Rudraraju Hyderabad [PAN :AFCPR1979L] Vs. DCIT, Circle-2(1) Hyderabad (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri P.Murali Mohan Rao,AR रधजस् व द्वधरध/Revenue by: Dr.Sachin Kumar, DR सुिवधई की तधरीख/Date of Hearing: 15/01/2025 घोर्णध की तधरीख/Date of Pronouncement: 05/02/2025 आदेश / ORDER PER. MANJUNATHA G., A.M: This appeal filed by the assessee is directed against the order dated 29.03.2019 of the learned Commissioner of Income Tax (Appeals) [Ld.CIT(A)]-2, Guntur, pertaining to A.Y.2014-15. 2. The brief facts of the case are that, the assessee is an individual, filed his return of income for the A.Y.2014-15 on 31.03.2015, admitting total income of Rs.53,50,976/-. The case was selected for scrutiny under CASS for the reason ‘suspicious long term capital gain on shares’ and during the course of assessment proceedings, the Assessing Officer, noticed that the 2 ITA No.957/Hyd/2019 Srinivas Shah Rudra Raju assessee had declared long term capital gains of Rs.2,29,74,224/- from transfer of equity shares of Turbotech Engineering Limited. The Assessing Officer, further noted that the assessee had purchased 50,000 equity shares of Mumbai based Turbotech Engineering Limited @ Rs.2/- per share in the F.Y.2011-12. The above shares have been sold on various dates in the financial year 2013-14, through BSE @ Rs.448/- to 502/- per share. The Assessing Officer had also referred to inputs from Investigation report of Kolkata and statement recorded from certain individuals, including Shri Sanjay Vora, Regional Director, East Zone of M/s Anand Rathi Shares & Stock Brokers and observed that the long-term capital gains declared by the assessee is bogus in nature and therefore, called upon the assessee, to explain as to why addition should not be made u/s 68 of the Income Tax Act, 1961 (“the Act”). In response, the assessee had filed relevant details, including purchase details of shares, DMAT account, sale of shares and also relevant confirmations from the parties and argued that the capital gains derived from sale of shares is genuine, which is supported by relevant evidences. The Assessing Officer, after considering relevant submissions of the assessee and also taking note of investigation report of Investigation Wing, Kolkata and also interim order passed by the SEBI, suspending the trading in shares of Turbotech Engineering Limited, observed that the assessee has derived bogus long-term capital gains from purchase and sale of shares of Turbotech Engineering Limited 3 ITA No.957/Hyd/2019 Srinivas Shah Rudra Raju in association with entry providers, therefore, rejected the arguments of the assessee and made additions towards consideration received for sale of shares of Turbotech Engineering Limited amounting to Rs. 2,30,74,224/- as unexplained cash credit u/s 68 of the Act. The Assessing Officer had also made addition of Rs.4,61,484/- towards alleged commission paid to brokers, who facilitated the transactions of purchase and sale of shares as unexplained expenditure. 3. Being aggrieved by the assessment order, the assessee preferred an appeal before the CIT(A). Before the Ld.CIT(A), the assessee has filed detailed written submissions on the issue, which has been reproduced at para 3 on pages 12 to 20 of the order of the Ld.CIT(A). The sum and substance of the arguments of the assessee before the Ld.CIT(A) are that, the long-term capital gains declared from sale of shares is genuine in nature, which is supported by relevant evidences. The Ld.CIT(A), after considering the relevant submissions of the assessee and also taking note of certain judicial precedents, held that, the assessee is beneficiary of bogus long-term capital gains derived from purchase and sale of shares of Turbotech Engineering Ltd., which is evident from investigation carried out by the department in Kolkata, where, the modus operandi of the entry providers revealed bogus long-term capital gains derived by various individuals in association with entry providers. Therefore, rejected the arguments of the assessee and upheld 4 ITA No.957/Hyd/2019 Srinivas Shah Rudra Raju the additions made by the Assessing Officer towards sale consideration received for sale of shares u/s 68 of the Act and consequent commission paid to brokers for facilitating the transactions. 4. Aggrieved by the order of the Ld.CIT(A), the assessee is now in appeal before the Tribunal. 5. The learned counsel for the assessee, Shri P.Murali Mohan Rao, CA, submitted that the Ld.CIT(A) erred in sustaining the additions made by the Assessing Officer, towards long-term capital gains and consequent expenditure, without appreciating the fact that the transactions of purchase and sale of shares of Turbotech Engineering Ltd. is genuine, which is fully supported by relevant evidences, including confirmation from the parties. The learned counsel for the assessee, further referring to copy of SEBI order in respect of Haresh Infrastructure Private Ltd., submitted that the Assessing Officer made additions towards consideration received for sale of shares u/s 68 of the Act and consequent commission expenditure on the basis of interim order passed by the SEBI, but the fact remains that in the final order dated 25.11.2014, the SEBI has given clean chit to Haresh Infrastructure Private Ltd from whom the assessee had facilitated purchase and sale of shares of Turbotech Engineering Ltd. Therefore, he submitted that the additions made by the Assessing Officer and confirmed by the Ld.CIT(A) cannot be 5 ITA No.957/Hyd/2019 Srinivas Shah Rudra Raju sustained. The learned counsel for the assessee, further submitted that the issue is squarely covered by the decision of ITAT Hyderbad in the case of Ishoo Narang Vs. DCIT in ITA No.450/Hyd/2022, where, an identical issue of long-term capital gains derived from sale of shares of Turbotech Engineering Ltd. has been held to be genuine and accordingly, deleted the additions made by the Assessing Officer u/s 68 of the Act. Therefore, he submitted that the additions made by the Assessing Officer should be deleted. 6. Dr.Sachin Kumar, Ld.Sr.AR on the other hand, supporting the order of the Ld.CIT(A) submitted that the Assessing Officer and the Ld.CIT(A) brought out clear facts to the effect that the assessee is one of the beneficiary of bogus long-term capital gains provided by the entry providers, by trading in shares of Turbotech Engineering Ltd. which is clearly evident from the Investigation report relied upon by the Assessing Officer, coupled with statements recorded from certain individuals. Further, the Assessing Officer had also brought out clear facts that the assessee has purchased shares through off market by payment of cash and sold shares within short period of two years and derived huge amount of capital gains, which is improbable in a normal share trading activity by any investor. The Ld.CIT(A), after considering relevant facts has rightly sustained the additions made by the Assessing Officer and therefore, their order should be upheld. 6 ITA No.957/Hyd/2019 Srinivas Shah Rudra Raju 7. We have heard both the parties, perused the material on record and gone through the orders of the authorities below. We have also carefully considered relevant case laws cited by both the parties, in support of their arguments. The facts borne out from the record indicate that the assessee has purchased 50000 shares of Turbotech Engineering Ltd. in the F.Y.2011-12 @Rs.2/- per share and sold the said 50000 shares on various dates in the F.Y.2013-14 through BSE @ Rs.448/- to Rs.500/- per share. The assessee has furnished relevant evidences to prove the transactions of purchase and sale of shares, including confirmation from the parties for purchase of shares through off market transactions and also sale of shares through stock exchange, including relevant Demat account and consideration received through proper banking channel. The Assessing Officer never disputed these facts. However, the Assessing Officer made additions towards sale consideration u/s 68 of the Act as unexplained cash credit on the basis of investigation report of Income Tax Department, Kolkata, which refers to certain companies and individuals, who were involved in providing entries of bogus long-term capital gains to various persons and in the said report, the name of the scrip, Turbotech Engineering Ltd. was also referred. The Assessing Officer, further referred to certain statements recorded from individuals, where they have admitted to have facilitated transactions of purchase and sale of shares to various individuals and received commission of 2% on 7 ITA No.957/Hyd/2019 Srinivas Shah Rudra Raju total transactions. The Assessing Officer on the basis of investigation report coupled with statement recorded from certain individuals and also based on interim report of SEBI, came to the conclusion that the long-term capital gains declared by the assessee from sale of shares of Turbotech Engineering Ltd. is bogus in nature, which is unexplained credit taxable u/s 68 of the Act. 8. We have gone through the reasons given by the Assessing Officer to make additions towards consideration received for sale of shares u/s 68 of the Act as unexplained cash credit and sustained by the Ld.CIT(A), in light of various arguments of the learned counsel for the assessee and we ourselves do not subscribe to the reasons given by the Assessing Officer and the Ld.CIT(A), for the simple reason that the Assessing Officer merely, on the basis of investigation report, coupled with statements recorded from few individuals, came to the conclusion that the long term capital gains declared by the assessee is bogus in nature, which is taxable u/s 68 of the Act as unexplained cash credit, without carrying out further enquiries, either by furnishing relevant investigation report and statement of the persons to the assessee for his cross examination and rebuttal. Further, the Assessing Officer had also failed to carry out further enquiry to ascertain the true nature of transactions in light of various evidences filed by the assessee, including the details of purchase and sale of shares, 8 ITA No.957/Hyd/2019 Srinivas Shah Rudra Raju bank accounts, Demat account and confirmation letters from the parties. Admittedly, the assessee has furnished confirmation letters from the parties to prove the purchase of shares. Sale of shares has been effected through Demat account in the BSE and received consideration through proper banking channel. Therefore, from the evidences filed by the assessee, it is undisputedly clear that, the assessee is able to furnish the complete details, in respect of long-term capital gains derived from sale of shares of Turbotech Engineering Ltd. Further, the Assessing Officer relied upon the interim report of SEBI. However, the assessee has furnished the final order passed by SEBI dated 25.11.2014 in the case of Haresh Infrastructure Private Ltd. and as per the final order, the adjudicating authorities does not stand established involvement of Haresh Infrastructure Private Ltd. in the alleged transaction of facilitation of purchase and sale of shares of Turbotech Engineering Ltd. From the details filed by the assessee, including the final order passed by the SEBI dated 25.11.2014, it is undisputedly clear that the assessee is able to prove the transactions of purchase and sale of shares with relevant evidences and therefore, in our considered view, the Assessing Officer / Ld.CIT(A) erred in holding that the long-term capital gains declared by the assessee from transfer of shares of Turbotech Engineering Ltd. is unexplained cash credit, assessable u/s 68 of the Act. 9 ITA No.957/Hyd/2019 Srinivas Shah Rudra Raju 9. The assessee has relied upon the decision of ITAT Hyderabad in the case of Ishoo Narang Vs. DCIT (supra). We find that the coordinate bench of ITAT has considered identical issue of purchase and sale of shares of Turbotech Engineering Private Ltd and consequent long-term capital gains declared by the assessee. After considering the relevant facts and also the final order passed by the SEBI held as under : “10. We have heard both the parties, perused the material available on record and gone through the orders of the authorities below. We have also carefully considered the relevant case laws referred to by the Assessing Officer and the learned CIT (A) in support of their findings and various case law relied upon by the learned Counsel for the assessee to support his argument. As regard the first legal ground taken by the assessee on reopening of the assessment u/s 147 of the I.T. Act, 1961, we find that the assessment has been reopened in consequent to the findings recorded during the course of survey conducted u/s 133A of the Act, where a statement on oath u/s 131 was recorded from the appellant in light of purchase and sale of shares of M/s Turbo Tech Engineering and M/s. Sharp Trading Company and ascertained that the appellant has claimed exemption u/s 10(38) of the I.T. Act, 1961 towards Long-Term Capital Gain. Based on the said information, the Assessing Officer recorded reasons for reopening of the assessment and observed that there is an escapement of income from tax on account of under assessment of Long-Term Capital Gain derived from purchase and sale of shares. From the above, it is undisputedly clear that there is fresh tangible material in the form of material, found during the course of survey which is subsequent to completion of assessment for the impugned A.Ys and therefore, the argument of the learned Counsel for the assessee that the reopening of the assessment was not based on any fresh tangible material but merely on change of opinion is devoid of any merit and unsustainable. Further, the Hon'ble Apex Court in the case 10 ITA No.957/Hyd/2019 Srinivas Shah Rudra Raju of Raymond Woollen Mills Ltd. vs Income-Tax Officer And Ors 236 ITR 34, (1999) had an occasion to consider the validity of reopening of the assessment and held that in determining whether commencement of re-assessement proceedings was valid, it has only to be seen whether there was any prima facie material on the basis of which the Department reopened the case. Sufficiency or correctness of the material is not need to be considered at this stage. From the reasons recorded for reopening of the assessment, we are of the considered opinion that there is a prima facie material on the basis of which the Assessing Officer formed reasonable belief of escapement of income and thus, the reopening of the assessment u/s 147 of the Act is on sound footing and valid. Accordingly, we reject the grounds taken by the assessee. 11. Having said so, let us come back to the issue on hand. Admittedly, the appellant has purchased 42,500 equity shares of Sharp Trading Company on 29.3.2012 for a consideration of Rs.4,25,000/-. The appellant had also purchased 50,000 equity shares of Turbo Tech Engineering on 26/12/2011 for a consideration of Rs.1,00,000/-. The assessee has sold the shares of Sharp Trading Company for a consideration of Rs.4,14,90,8432/-. Similarly, the shares of Turbo Tech Engineering were sold for a consideration of Rs.2,30,85,623/-. Thus, the appellant has derived Long- Term Capital Gain of Rs.6,40,51,466/- and claimed exemption u/s 10(38) of the I.T. Act, 1961, because the holding period of above shares are more than 12 months and becomes Long-Term Capital Gain which is exempt as per the provisions of section 10(38) of the I.T. Act, 1961. There is no finding either from survey team or from the Assessing Officer with regard to the number of shares sold by the appellant in respect of both the companies. Although, the appellant claims that it has sold part of equity shares and remaining shares are still held by the appellant, but no evidence has been filed. Be that as it may, the facts remains that the purchase of above shares two years back is through proper banking channels and Demat Account. Further, sale of above shares is also through proper banking channels and through Demat 11 ITA No.957/Hyd/2019 Srinivas Shah Rudra Raju Account. The appellant has sold the shares through stock brokers in Demat format and received consideration in cheque. In fact, there is no dispute on these two facts, either from the Assessing Officer or from the learned CIT (A). The only dispute is with regard to the nature of transaction carried out by the appellant in light of statement recorded u/s131 of the I.T. Act, 1961 during the course of survey conducted in the business premises of the assessee on 15/09/2015. 12. During the course of survey, a statement u/s 131 was recorded from the assessee where he has stated that the Long-Term Capital Gain represents his unaccounted income routed through purchase and sale of shares of above two companies to his books of account. The appellant has also admitted for disclosure of additional income for the A.Y 2014-15 which is evident from the statement recorded during the course of survey. Admittedly, the appellant has filed a letter along with affidavit dated 30.09.2015 i.e. within 15 days from the date of recording statement u/s 131 of the I.T. Act, 1961 during the course of survey and stated that the statement was recorded in a state of confusion mind and whatever stated in the statement is incorrect and also capital gain derived from sale of shares is genuine which is supported by necessary evidences. Accordingly, the appellant has not admitted any income in re-assessement proceedings. 13. The sole basis for the Assessing Officer to make addition towards Long-Term Capital Gain u/s 68 of the I.T. Act, 1961 is survey conducted u/s 133A of the I.T. Act, 1961 and statement recorded from the assessee u/s 131 of the Act. Although the Assessing Officer rests his observation on the basis of statement recorded u/s 131, but in principle said statement is no longer in existence because the appellant has withdrawn the above statement by a sworn affidavit dated 30.09.2015. Be that as it may, if we go by the statement recorded u/s 131 of the I.T. Act, 1961, the Assessing Officer has recorded the confession of the assessee with regard to the bogus nature of capital gain, but there is no reference to any material either in the form of report from Investigation Wing or any other 12 ITA No.957/Hyd/2019 Srinivas Shah Rudra Raju material which suggests the role of the appellant in the alleged scam of bogus nature of capital gain provided by entry providers in Kolkata. Further, although the Assessing Officer refers to Investigation Report in Para 3 of his assessment order, but said reference is only in 3 lines without any details as to what is the findings of the Investigation Wing with regard to the modes operandi of entry providers and the role of appellant. In our considered view, there may be an alleged scam of providing entry in the form of Long-Term Capital Gain or unsecured loan, but unless the Assessing Officer links the appellant activities to said alleged scam, it cannot be alleged that the appellant is also part of alleged scam of bogus Long-Term Capital Gain provided by entry operators and the appellant has derived benefit by claiming exemption towards Long-Term Capital Gain u/s 10(38) of the I.T. Act, 1961. In our considered view, if we go by the observation of the Assessing Officer in the assessment order, it is general in nature without there being any specific observation with regard to the role of the assessee in respect of above two shares. Further, although the Assessing Officer refers to the financials of the above two companies and sudden jump in share price during short period, but that alone itself is not a ground to allege that the assessee is also a part of such alleged scam and Long- Term Capital Gain derived from the appellant from purchase and sale of above shares is bogus in nature. Take an example, there may be a group of people who are in collusion with each other may have traded a particular share to jack the share price artificially in the stock market, but a common investor in stock market by watching the moment of share price of particular share may invest accidently and derives some profit or loss. Therefore, merely for the reasons that there is a sudden jump in share price, it cannot be alleged that the assessee is also a part of that group of people who are involved in providing bogus entries for deriving Long-Term Capital Gain. In the present case, the Assessing Officer neither brought out any material which suggests the role of the appellant in the alleged scam of bogus Long-Term Capital Gain nor any reference in the investigation report before 13 ITA No.957/Hyd/2019 Srinivas Shah Rudra Raju coming to the conclusion that the Long-Term Capital Gain derived by the assessee is bogus in nature. 14. At this stage it is relevant to consider the decision of the Hon'ble Supreme Court in the case of CIT vs. S Kadar Khan & Sons (Supra), where it has been clearly held that the Assessing Officer does not have the power to examine any person on oath during survey u/s 133A of the I.T. Act, 1961. Further, the statement recorded u/s 131 during the course of survey has no evidentiary value and any admission made during such statement cannot be made the basis of addition. Similar view has been taken by the Hon'ble Telangana & Andhra Pradesh High Court in the case of Gajjam Chinna Yellappa vs. Income Tax Officer (Supra), where it has been held that where assessment order has been based on sole basis of statement recorded during the course of survey and after retraction of statement, the Assessing Officer did not produce any other material to support under assessment of sale consideration of land, assessment order was to be set aside. A similar view has been taken by the Hon'ble Supreme Court in the case of Pullangode Rubber Produce Co. Ltd vs. State of Kerala (1973) 91 ITR 18 (S.C). The sum and substance ratios laid down by various Courts is that addition cannot be made on the basis of statement recorded u/s 131 during the course of survey u/s 133A of the I.T. Act, 1961, but it should be supported by corroborative evidences and in absence of any evidence, no addition can be made on the basis of statement alone. In the present case, going by the reasons given by the Assessing Officer and the learned CIT (A), the additions towards the consideration received for sale of shares u/s 68 of the I.T. Act, 1961, in our considered view, said addition is made solely on the basis of statement recorded from the assessee but not based on any material. Therefore, the addition made by the Assessing Officer cannot be sustained. 15. Coming back to the case law on the issue of additions made towards Long-Term Capital Gain u/s 68 of the I.T. Act, 1961. The Hon'ble Supreme Court in the case of PCIT vs. Parasben Kasturchand Kochar (Supra) had 14 ITA No.957/Hyd/2019 Srinivas Shah Rudra Raju considered an identical issue of addition made towards Long-Term Capital Gain derived from sale of shares and claimed exempt u/s 10(38) of the I.T. Act, 1961 and after considering the relevant facts, held that where the assessee individual engaged in trading of shares had discharged his onus of establishing Long-Term Capital Gain arising out of sale of different shares as fair and transparent by submitting record of purchase and sales bills, demat statement etc., and thus not being earned from bogus company was eligible for exemption u/s 10(38) of the Act. The relevant observation of the Hon'ble Supreme Court is 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 Pvt. Ltd. Vs. 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 15 ITA No.957/Hyd/2019 Srinivas Shah Rudra Raju 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. 4. We take notice of the fact that the assessee has a Demat Account maintained with the ICICI Securities Ltd. and has also furnished the details of such bank transactions with regard to the purchase of the shares. In the last, the Tribunal took notice of the fact that the statements recorded by the investigation wing of the Revenue with regard to the Tax entry provided were informed to the assessee despite giving him opportunity to meet such an allegation. In the overall view of the matter, we believe that the proposed question cannot be termed as a substantial question of law for the purpose of maintaining the appeal under Section 260-A of the Act, 1961.” 16. Similar view has been taken by the Hon'ble Supreme Court in the case of CIT (Central) vs. Sunita Dhadda in Special Leave Petition (Civil) Nos.9432/2018 dated 28/03/2018 wherein the Hon'ble Supreme Court has upheld the order of the Hon'ble Rajasthan High Court. 17. Coming back to the case law relied upon by the learned DR. The learned DR relied upon the decision of the ITAT Hyderabad Benches in the case of Anirudh Venkata Ragi vs Income Tax Officer in ITA No.352/Hyd/2019 16 ITA No.957/Hyd/2019 Srinivas Shah Rudra Raju dated 21/11/2023 and in the case of Shri Govind Kumar Agarwal vs. Income Tax Officer in ITA Nos.125/Hyd/2020 & Others dated 21/11/2023. We find that, although the Coordinate Bench has taken contrary view on this issue and held that the Long-Term Capital Gain derived from sale of shares of company is bogus in nature, but fact remains that the Hon'ble Supreme Court has considered very similar issue in light of purchase and sale of shares of companies and held that once necessary evidence has been filed to prove purchase and sale of shares including Demat statement etc., then the Long-Term Capital Gain derived from sale of shares was to be allowed u/s 10(38) of the I.T. Act, 1961. Therefore, we are of the considered view that once the issue has been decided by the Hon'ble Supreme Court, in our considered view, the other judgments relied upon by the learned DR including the decision of the Coordinate Benches of Hyderabad ITAT has no binding precedent and thus are not considered. 18. In this view of the matter and considering the facts and circumstances of the case, we are of the considered view that the learned CIT (A) is erred in sustaining the addition made by the Assessing Officer towards Long- Term Capital Gain derived from sale of shares and claiming exemption u/s 10(38) of the I.T. Act, 1961 as unexplained credit u/s 68 of the I.T. Act, 1961. Thus, we set aside the order of the learned CIT (A) and direct the Assessing Officer to delete the additions made towards consideration received for sale of shares u/s 68 of the I.T. Act, 1961.” 10. In view of this matter and considering the facts and circumstances of the case, we are of the considered view that the long-term capital gains declared by the assessee from sale of shares of Turbotech Engineering Ltd is genuine, which is supported by necessary evidences. The Assessing Officer and the Ld.CIT(A), without appreciating relevant facts, simply made 17 ITA No.957/Hyd/2019 Srinivas Shah Rudra Raju additions towards consideration received towards sale of shares as unexplained cash credit u/s 68 of the Act. Thus, we set aside the order of the Ld.CIT(A) and direct the Assessing Officer to delete the additions made towards long-term capital gains derived from sale of shares u/s 68 of the Act. We further direct the Assessing Officer to delete the additions made towards alleged commission expenditure of Rs.4,61,484/-, because, the said addition is in consequence to addition made by the Assessing Officer towards unexplained cash credit u/s 68 of the Act. 11. In the result, appeal filed by the assessee is allowed. Order pronounced in the Open Court on 5th February, 2025. Sd/- Sd/- (K.NARASIMHA CHARY) JUDICIAL MEMBER (MANJUNATHA G.) ACCOUNTANT MEMBER Hyderabad, Dated 5th February, 2025 L.Rama, SPS 18 ITA No.957/Hyd/2019 Srinivas Shah Rudra Raju Copy to: S.No Addresses 1 Sri Srinivas Shah Rudraraju, 8-2-120/112/a/9, Road No.9, Jubilee Hills, Hyderabad 2 The DCIT, Circle-2(1), Hyderabad 3 The Pr.CIT-2, Hyderabad 4 The DR, ITAT Hyderabad Benches 5 Guard File By Order "