Tribunal Affirms CIT(A)'s Decision: Deletion of Rs. 3,33,466 Bogus LTCL Stands; No Evidence of Discrepancies Found.

The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision to delete the addition of Rs. 3,33,466/- as a bogus long-term capital loss (LTCL) under Section 10(38) of the Act. The Tribunal found no discrepancies in the evidence provided by the assessee, including contract notes and trading bills, and confirmed compliance with regulatory requirements. The transactions involving VAS Infrastructure Ltd. were not deemed blacklisted, and the trading data supported the legitimacy of the transactions. Consequently, the Tribunal affirmed the CIT(A)'s findings, emphasizing the absence of any legal or factual errors in the deletion of the addition.

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Issues:
Appeal against deletion of addition of bogus LTCL claimed under section 10(38) of the Act from shares transaction through penny stock for A.Y. 2011-12.

Analysis:
The appeal was filed by the Revenue against the order passed by the Ld. CIT(Appeals)-10, Ahmedabad for A.Y. 2011-12. The Revenue contended that the CIT (A) erred in law and in facts by deleting the addition of Rs. 3,33,466/- as bogus LTCL claimed under section 10(38) of the Act from shares transaction through penny stock. The assessee had declared total income at Rs. 4,46,520/- for the relevant assessment year. The case was reopened under Section 148 of the Act based on information received regarding the use of VAS Infrastructure Ltd. as a penny stock for accommodation entries. The Assessing Officer observed the purchase and sale of 10000 shares of VAS Infra, resulting in a loss of Rs. 3,33,466/-, which was treated as a bogus loss.

The assessee appealed before the CIT(A), who allowed the appeal. The Revenue argued that VAS Infrastructure Ltd. was blacklisted and declared a penny stock, justifying the addition made by the Assessing Officer. However, the CIT(A) found that the script was not blacklisted as per the SEBI report and the trading data supported the transactions. The assessee provided relevant documents like contract notes and trading bills, showing compliance with regulations such as payment of STT and transactions through banking channels. The CIT(A) concluded that there were no discrepancies in the evidence provided by the assessee, leading to the deletion of the addition. The Tribunal upheld the CIT(A)'s decision, dismissing the Revenue's appeal.

In conclusion, the Tribunal dismissed the appeal of the Revenue, emphasizing the lack of discrepancies in the evidence produced by the assessee and the compliance with regulatory requirements. The decision was based on the findings that the script was not blacklisted and that the transactions were supported by proper documentation and conducted through legitimate channels.

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