ITAT upholds Denial of Earnings Tax Exemption u/s10(38)


Money Launder - Stockbroker - ITAT upholds - Income Tax - Exemption - taxscan

The Earnings Tax Appellate Tribunal (ITAT), Delhi bench has upheld an order denying earnings tax exemption to the assessee allegedly concerned within the rip-off of cash laundering by stockbroker.

The AO, whereas concluding the evaluation proceedings in opposition to the assessee, a girl famous that as per the Investigation report of the Investigation Wing, Kolkata, M/s Lifeline Medicine & Pharma Ltd. is a penny inventory firm and sure stockbrokers have been concerned in offering lodging entries within the type of sale of shares in opposition to fee ofa fee. He famous that sure brokers had admitted that they’d acquired money from beneficiaries together with the assessee and the identical was returned within the type of sale proceeds of shares with STT fee to entitle them to assert the advantage of exemption below part 10(38) of the Act.

Upholding the motion of the AO, the Tribunal bench comprising R. Okay. Panda, Accountant Member and Shri Anubhav Sharma, Judicial Member noticed that the declare of deduction below part 10(38) of the Act on the bottom that the assessee did not substantiate with proof to his satisfaction relating to sale of shares of M/s Lifeline Medicine & Pharma Ltd. which elevated from Rs.6 to Rs.186.84 in simply 18 months.

“In accordance with him, hike in value of the scrip shouldn’t be supported by the basic of the corporate and the assessee couldn’t substantiate with any supporting proof to justify the transaction. We discover the ld. CIT(A) in his elaborate order has determined the problem and dismissed the attraction filed by the assessee on the bottom that the AO has clearly given the modus operandi of cash laundering by the stockbroker of the brokers and the beneficiaries are eager about having their cash laundered. He has given detailed reasoning as to how the assessee has launched her unaccounted cash within the garb of Lengthy-Time period Capital Achieve. Nothing has been introduced by the assessee earlier than us to take a opposite view than the view taken by the ld. CIT(A) on this situation. We, due to this fact, uphold theorder of the Ld. CIT(A) and the bottom raised by the assessee is dismissed,” the Tribunal stated.

Senior Council Sh. Rajesh Kumar Dhanesta appeared for the division.

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Shweta Puneet vs ITO-20(1)

Counsel for Respondent:   Sh. Rajesh Kumar Dhanesta


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