2021 (6) TMI 304

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..... 1,61,414/-. Thereafter, the Assessing Officer received information from the Dy. Director of Income Tax (Inv.) Unit-3(2) Mumbai, vide letter dated 16.03.2018 that the assessee had traded in penny scrip M/s. Rockon Fintech (earlier known as Insutech India) with the sale value of the shares at Rs. 2,78,753/-. In view of the above, the Assessing Officer had reason to believe that the income chargeable to tax has escaped assessment within the meaning of section 147(b) of the I.T. Act. He therefore, initiated re-assessment proceedings by issuance of a notice u/s 148 and called for certain details. The Assessing Officer observed that the Director (Inv.) Kolkata carried out a country wide investigation to unearth the organized racket of genera....

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....Penny Stock. (b) The learned Commissioner of 1ncome Tax (Appeals) erred in Sustaining the said addition of Rs. 2,35,644/. towards Unexplained 1nvestment in the so called Penny Stock without going through the Written submissions made before him. (c) The learned Commissioner of income Tax (Appeals) erred in Sustaining the addition of Rs. 2,35,644/. without appreciating the fact that the Assessing Officer had show caused the figure at Rs. 2,78,753/. as information obtained from Investigation wing. 3. Any Other ground/s that may be Urged at the time of hearing". 3. The learned Counsel for the assessee submitted that the assessee is a trader in shares and he utilizes the sale consideration of one share for purchase ....

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....sallowance, it can be of Rs. 506/- only and not the entire value of purchase of shares of the said company at Rs. 2,35,644/-. I am convinced with the argument of the assessee that the shares were purchased as long as back in the year 2008 and sold immediately thereafter and the assessee has incurred a loss and only such amount can be disallowed. On going through the assessment order as well as the order of the CIT (A), I find that that the main reason for the disallowance is that the Rockon Fintech is a penny stock company and the assessee has invested in penny stock. None of the authorities below have verified the sources for the investment. From the details filed by the assessee before this Tribunal, it appears, that the assessee has used....