TaxTMI 
TaxTMI 
2022 (6) TMI 17
X X X X Extracts X X X X
X X X X Extracts X X X X
....ated, the return of the assessee was selected for complete scrutiny by CASS. The reasons as per CASS were "suspicious sale transaction in share [penny stock tab in ITS)". The assessment was completed under Section 143(3) of the Act by the Assessing Officer accepting the return of income vide order dated 27.12.2017. Thereafter, the Pr.CIT in exercise of its revisionary powers, issued show cause notice dated 11.03.2020 under Section 263 of the Act requiring the assessee to show cause as to why the assessment was framed under Section 143(3) of the Act should not be modified/set aside on the ground that such order is erroneous insofar as it is prejudicial to the interest of the Revenue. The show cause notice issued in this regard is extracted herein for ready reference. To, Anusha Maheshwari KU-112 Vishakha Enclave, Pitam Pura Delhi 110088, Delhi India PAN: AIPPPM1192E Assessment Year : 2015-16 Dated 11/03/2020 DIN & Letter No. ITBA/COM/F/17/2019-20/0126451683(1) Sir/Madam/M/s. Subject: Notice u/s. 263 of the Income Tax, 1961, in the case of Ms. Anusha Maheshwari (PAN : AIPPM1192E) for A.Y. 2015-16 reg. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation 1.- .............. Explanation 2.- For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Commissioner or Commissioner 1. the order is passed without making inquiries or verification which should have been made; 2. the order is passed allowing any relief without inquiring into the claim; 3. the order has not been made in accordance with any order, direction or instruction issued by the Board under section 119; or 4. the order has ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pointed out that the assessee is MBA Finance and also passed examinations conducted by the stock exchange and the market regulator, i.e., SEBI in the field security market. The assessee is thus accomplished and has sufficient track record of investment in the equity market continuously. It was pointed out that the profit arising from sale of shares has been declared as a 'business income' in the ordinary course for the reasons of plunge taken in the stock market with regularity. It was thus submitted that the whole facts are required to be appreciated in the peculiar background of the assessee concerned. It was submitted that the relevant evidences and documents concerning the purchase and sale transaction have been duly filed before the Assessing Officer as called for. It was further submitted that the alleged abnormal increase in the price of the company, i.e., Channel Entertainment Ltd. in itself cannot be the reason for alleging transactions to be clandestine or indulgence of the assessee in any manner. The price of the shares were market oriented being listed on the stock exchange. The assessee has entered into a meager purchase of 1000 shares on 10.11.2012 and upon the issue ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der under revision. During the assessment year, in question, the assessee has received Rs.17,43,600/- of Channel Nine Entertainment on sale of 4000 shares which is alleged to be unexplained cash credit arising from sale of penny stock in substitution of 'business income' offered by assessee. 8.1 In the matter, it is the case of the assessee that the assessment was selected for scrutiny specifically for verification of transactions undertaken by the assessee in penny stock. A detailed show cause notice under Section 142(1) was issued on 08.12.2017 alleging that capital gains arising from transaction in shares of Channel Nine Entertainment Ltd. have not been disclosed in the return and that such gains, based on report of the investigation wing Kolkata/Delhi is bogus and accommodation entry in respect of which exemption under Section 10(38) of the Act has been incorrectly claimed. The assessee was specifically show caused as to why the receipt of Rs.17,43,600/- should not be treated as unexplained cash credit. The assessee filed a reply to the aforesaid show cause notice wherein, besides furnishing necessary detailed information and documentary evidences in relation to transa....