TaxTMI 
TaxTMI 
TaxTMI 
2022 (5) TMI 1625
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....x Act, 1961 (hereinafter 'the Act') vide order dated 29.12.2016. 2. The only issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of AO in making addition of unexplained profit on sale of shares of NCL Research & Financial Services Ltd., as unexplained credit u/s. 68 of the Act and rejected the claim of exemption u/s. 10(38) of the Act by holding the sale of shares as penny stocks. For this, assessee has raised various grounds, which we need not to reproduce. 3. Brief facts are that the assessee purchased 11000 shares of NCL Research & Financial Services Ltd., for a sum of Rs.16,10,046/- (Rs.146.36 per share) and sold the same for a sum of Rs.1,77,56,565/- within one year and claimed profit of R....
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....e instant case, the relevant facts and circumstantial evidences clearly proved that the impugned transaction was sham in nature. The appellant had also failed to discharge the subsequent onus cast on her to substantiate the genuineness of the transaction. 24. The appellant cannot escape the consequences of law merely by relying on the documents and papers so prepared and arranged to manipulate the transaction to suit her vested interest. In this regard, the reliance can be placed on the decision of the Hon'ble Supreme Court in the case of CIT vs. Panipat Woollen & Gen Mills Co Ltd, 103 ITR 66. It is also pertinent to mention here that the manner in which entries are made in the books of accounts is not determinative of the question that ....
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....he addition made by the AO is confirmed." 4. At the outset, it is noticed that in the case of penny stock, we are consistently taking a view, where the SEBI report and the report of the Investigation Wing of Kolkata & Delhi or any other report was not confronted to the assessee, the matter is being restored back to the file of the AO for confronting the material gathered and used against the assessee. Similar view in the cases of Smt. Vandana Jain in ITA Nos.1903 & 1904/Chny/2019, Shri Raj Kumar Jain in ITA Nos.1905 & 1906/Chny/2019 & Raj Kumar Jain HUF in ITA Nos.1907/Chny/2019, Smt. Mithu Kumari Ranka in ITA No.1970/Chny/2018 vide common order dated 31.03.2022 wherein (one of us Mahavir Singh, VP is a party) directed as under:- 12. We....
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....ction 142(3) is a mandatory statutory requirement in completing the assessment proceedings failing which may vitiate the entire assessment itself since this sub-section uses the word 'shall'. 13. Per contra, the Ld. Counsel referred to another decision of Co-ordinate Bench, ITAT Bangalore in ITA No. 650/Bang/2019 for A.Y. 2015-16 in the case of Shri Suresh J. Kothari (HUF) v. ITO, Ward 2(2)(1), Bengaluru, dated 31.07.2019 which in turn has followed the directions issued in the case of Chandra Devi Kothari (supra) by Hon'ble High Court of Karnataka. Relevant portion of the said order of co-ordiante Bench of ITAT Bangalore is reproduced herein below for the sake of clarity and ease of reference: "3. The learned Authorised Representative s....
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....ires to be re-considered by the respondent by providing fair and reasonable opportunity of hearing to the petitioner and by furnishing the details / copy of the statement based on which the impugned assessment order has been passed." [emphasis supplied by us] 4.3.2 From the above Para 8 of the judgment of Hon'ble Kanataka High Court in the case of Chandra Devi Kothari (supra) it is seen that matter was restored back to the file of the AO for fresh decision after providing copy of the statement and other related details relied upon by the AO); in this case copy of the Report of Kolkata Investigation Directorate and other attendant details. As per the facts noted by the High Court in the earlier paras of judgment (supra) and as per the ....
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....vation made by the Hon'ble Madras High Court in Para 27 in the case of Mrs. Manish D. Jain (HUF) (supra) on the availability of material to the assessee. Further, respectfully following the directions given in Para 8 in the judgment of Hon'ble Karnataka High Court in the case of Chandra Devi Kothari (supra) and the order of co-ordinate bench of ITAT, Bangalore in the case of Shri Suresh J. Kothari (HUF) (supra), we set aside the impugned order passed by Ld. CIT(A) and Ld. AO and restore the matter back to the file of the Ld. AO with the direction to comply with the mandatory statutory requirements of section 142(3) of the Act failing which may vitiate the assessment itself. We are of the considered view that the Ld. AO has to reconsider the....