TaxTMI 
TaxTMI 
2024 (4) TMI 199
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.... Income Tax Act, 1961 ['the Act' for short] the appellant-Revenue has proposed the following questions of law arising out of the order dated 24.04.2023 passed by the Income Tax Appellate Tribunal [for short 'the Tribunal'] in ITA No. 593/AHD/2020 for A.Y. 2015-16: "a. Whether in the facts and circumstances of the case and in law, the learned ITAT has erred in restricting the disallowance u/s. 14A of the Income Tax Act read with Rule 8D(iii) of the Income Tax Rules, to the extent of exemption income, which is contrary to circular 5/2014 issued by CBDT? b. Whether the impugned order of the learned ITAT restricting the disallowance u/s. 14A of the I.T. Act upto the exempt income earned by the assessee during the year under consideration i....
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....enuineness of such transaction before the Assessing officer. 5. It was submitted that the assessee claimed the loss on account of the low market value in case of Kappac Pharma Ltd as the same was shown as stock-in-trade and therefore, the loss could not have been allowed as held by the Assessing Officer. 6. It appears that the CIT(A) while considering the ground of appeal filed by the assessee on addition of Rs. 73,12,905/- on sale of shares of Alang Industries Gas Ltd and loss on account of low market price in case of Kappac Pharma Ltd has held as under: "5.3 It was gathered by the Deptt/the Assessing Officer that during the year under consideration the appellant had dealt in some penny stocks namely share of M/s. Alang Industries Gase....
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....nt) had unearthed large number of penny stocks companies whose shares prices were artificially raised in the stock exchanges in order to book bogus claims of long term capital gains or short term capital losses by various beneficiaries. The AO noted that the appellant had shown purchase of scripts of Alang Industrial Gases Ltd @ Rs. 110 per share and sold the same @ Rs. 10.25 per share. Similarly shares of Kappac Pharma was purchased in November, 2014 at the rate of Rs. 252.71 per share and the book value on 31.03.2015 was taken at Rs. 112.85 per share. It is the case of the AO that no valid explanation was furnished in the matter except claiming that the transactions were made through recognized stock exchanges. The AO disallowed loss amou....
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....ss loss of Rs. 53,02,455/- though the shares are not sold. The difference is only because the valuation of shares which is as per the Accounting standard and the share of Kappack Pharma are still forming part of closing stock of the assessee company as on 31.03.2019. Thus, we have no hesitation in deleting the disallowance made by the AO which was correctly deleted by the Ld. CIT(A). Thus the grounds raised by the Revenue is without any basis and the same is liable to be rejected. The remaining ground Nos. 4 to 6 are general in nature, which does not require specific adjudication." 8. We have considered the concurrent findings of fact arrived at by the CIT(A) and Tribunal and are in complete agreement with such findings to the effect that....