2020 (10) TMI 660

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....f income for assessment year 2015-16 on 20/07/2015 declaring her total income of Rs. 16,46,420/-. The case of assessee was selected for scrutiny under CASS. During the pendency of scrutiny assessment, the assessee made declaration of Rs. 32,86,815/- under Income Declaration Scheme 2016 (in short 'IDS') in respect of Long Term Capital Gains (LTCG) from sale of shares claimed as exempt in return of income. Thereafter, the Assessing Officer vide order dated 21/12/2017 completed the assessment accepting the income declared by the assessee without making any addition/disallowances. 2.1. At the time of filing return of income, the assessee claimed long term capital gain of Rs. 32,86,815/- on sale of shares of GCM Securities Ltd. as exempt unde....

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....at notice is at pages 15 and 16 of the Paper Book. The reply to the said notice dated 28/06/2017 is at pages 17 to 27 of the Paper Book. 3. Shri Purushottam Tripuri, representing the Department vehemently defended the impugned order and prayed for dismissing the appeal of the assessee. The ld. Departmental Representative submitted that in the return of income the assessee has wrongly claimed exemption under section 10(38) of the Act on long term capital gains from sale of shares of GCM Securities Ltd. The purchase and sale of aforesaid scrip falls under the category of penny stock. Thus, in the case of bogus long term capital gains, entire sale proceeds are to be added to the total income. 4. We have heard the submissions made by ld. ....

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....he shares were indeed purchased by the assessee through banking transactions. It is not the case of the Revenue that the amount paid by the assessee for purchase of shares has travelled back to the assessee in the form of cash or any other manner. 6. The provisions of section 263 of the Act can be invoked if, the twin conditions mandated under the section are satisfied, i.e: (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the revenue. If any one of these two conditions is absent, the Commissioner of Income Tax cannot take recourse to section 263 of the Act. 7. In the present case, we find that the Assessing Officer has issued a questionnaire ....