AI Drafter 
TaxTMI 
TaxTMI 
2022 (11) TMI 724
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....of natural justice. 1.2 The Ld. Pr.CIT A'bad-3 has grievously erred in law and or on facts in exercising the powers u/s 263 since the assessment made by AO was neither erroneous nor prejudicial to interest of Revenue nor satisfied other conditions of Sec 263 of the Act, so that the entire action on part of Pr, CIT was illegal and unlawful. 2.1 The Ld. Pr. CIT has grievously erred in law and on facts in holding that the order of assessment passed u/s 143(3) r.w.s. 147 On 20-11-2018 by AO was erroneous and prejudicial to interest of Revenue in as much as the AO had failed to correctly observe facts on record or refer to DDIT report etc in relation to the transaction of share of VAS Infrastructure Ltd. 2.2 That in the facts and circumstances of the case as well as in law, the Ld. Pr. CIT has grievously erred in law and on facts in holding that the order of assessment passed u/s 143(3) r.w.s. 147 On 20-11-2018 by AO was erroneous and prejudicial to interest of Revenue. 2.3 That in the facts and circumstances of the case as well as in law, the Ld. Pr.CIT has grievously erred in holding that the transaction of VAS Infrastructure Ltd shares was penn....
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....uery relating to these shares for determining their genuineness; that due reply was also filed by the assessee and adequately substantiated with evidences, thus enabling the AO to be satisfied with the explanation of the assessee and for taking plausible view that it was not transactions relating to the penny stock, but was genuine short term capital gain transaction entered into by the assessee. In this regard, he drew our attention to the notice issued by the AO during the assessment proceedings under section 142(1) of the Act dated 19.9.2018 raising specific queries with regard to the trading in scrip of VIL reproduced at paper book page no.12 and 13 as under: "1) Details of all bank account with copy of bank-pass book/ bank statement for the period from 01/04/2010 to 31/03/2011 i.e. F. Y. 2010- 11, relevant to A.Y. 2011-12. 2) Copy of all bill pertains to "Short Term Capital Gain" and "Long Term Capital Gain". 3) Ledger a/c. of profit from sale of share Rs. 3,29,111/91. 4) Details of exempted LTCG on share/securities u/s. 10(38) for Rs. 8,31,362/- in the following format:- Sr. No Script |Qty. (Purchase [Sale [Holding period (Capital ....
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....E Capial Markets Ltd. for the assessee i.e. Mohsin Zulfikar Koradia for the impugned financial year i.e. 1.4.2010 to 31.3.2011 placed at page no.32 and * corresponding invoices issued by the BSE with regard to the said transaction placed at page no.32 to 39. * Bank statement of the assessee through which payments were made for the impugned transaction was also placed before us at page no.40 to 48. 8. Referring to the above, the ld.counsel for the assessee pointed out that before the AO, the assessee had adequately shown that 69,191 shares of VIL had been purchased and sold during the year itself. Purchases being made from 1.4.2010 to 1.11.2010 including purchases made in the months of May, July, August, September, October and November 2010. Corresponding sales also being made in various months of year i.e. April, May, October and November; that it was not case of any single transaction of the assessee, but it had been demonstrated to the AO that multiple transactions had taken place. It had also been demonstrated that there was no long term capital gain earned by the assessee, and entire scrip had been traded during the year itself, within a period of 12 months....
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....re sold for Rs.41,72,231/- i.e. almost at a rate of Rs.125/- per share; while these shares were purchased during the year at rate varying from Rs.41.15 as at the beginning of the year to Rs.91.81 per share as on 1.11.2010. The sale of 33,353 shares took place on 23.11.2010. Subsequently also on 25.11.2011 and 26.11.2011, the assessee has purchased shares of this very same company at the rate of 135.35 and Rs.136.91 per shares. All these facts lead to a reasonable conclusion that the assessee's act of trading in shares of VIL did not fit into modus operandi adopted by for taking accommodation entries through trading in penny stock. As per the Pr.CIT also modus operandi adopted by the assessee was by one of trade/transaction in the penny stock scrip, returning long term capital gain thereon and claiming the same as exempt. But in the present case, it is not that the assessee has returned long term capital gain claimed as exempt u/s 10(38) of the Act,but on contrary has returned short term capital gain and paid taxes thereon. Further, it is not case where purchases had been made at a very small price and sale made at a very large price, thus enabling unaccounted money from being intro....