TaxTMI 
TaxTMI 
2021 (8) TMI 418
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....n the manner passed by him. The impugned order being bad in law is required to be quashed. 2. In any case and without prejudice the order having been passed in total disregard of and in violation of the principles or natural justice, makes the order bad in law and liable to be quashed. 3. In any case and without further prejudice, the learned CIT (Appeals), Bengaluru - 5 has erred in; a) Confirming addition of Rs. 60,96,500/- being loss on sale of shares of M/s. Shreenath commercials & Financials Ltd. b) Holding without basis that the transactions in shares are fictitious. On proper appreciation of facts and circumstances of the case and the law applicable, the transactions are duly recorded in t....
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.... CIT(Appeals) confirmed the order of AO. Against this, the assessee is in appeal before us. 4. We have heard both the parties and perused the material on record. In this case, the assessee purchased shares of Shreenath commercials & Financials Ltd. along with other shares and the loss was of Rs. 60,96,500 on this count. According to the AR, the transaction was through normal banking channel and Demat account. It was submitted that since the AO had not doubted the genuineness of transaction and has questioned the timing of the transaction and the value at which the transaction was undertaken and the same cannot lead to the conclusion that the loss claimed by the assessee is fictitious. The assessee has taken a business decision in buying ....
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..... The assessee placed only oral arguments that the loss is genuine which is not sufficient to discharge the burden to prove that the purchase and sale transaction of assessee was genuine. The onus was on the assessee to explain the astronomical fall in the price of this scrip purchased by the assessee and that too without any financial rationale. The assessee failed to discharge the onus in this regard. Even if we take into account the argument of the ld. AR that in the capital market the movement in the price of shares is not always connected with the financials, it was not possible that price of these shares purchased by the assessee could go to fall every time. It may be possible that the scrip price may go down, but it is not possible t....
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....eive shares of the listed penny stock in exchange of the shares of the Pvt. Ltd company. M/s. Shreenath Commercials and Financials Ltd. is one such Penny Stock. In view of the Investigation on done by the Investigation wing regarding the penny stocks syndicate and the assessee indulging in trading in penny stocks, the modus operandi is that the share of this penny stock companies although listed on exchange was always closely held and controlled by the promoters of penny stock companies and the operators syndicate arrange these bogus Gain/Loss. This is due to the fact that the general public is not interested in the shares as these companies have no credentials and this helps the operator to keep a control on the price movements of the shar....