TaxTMI 
TaxTMI 
2024 (9) TMI 83
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.... the same is to be done by Ld. AO while passing the order based on inquiry made by him while implementing the order passed Ld. PCIT. 3. The Ld. Principal Commissioner has erred in directing the invocation of 69A as the assessee is not found to be owner of money & source of the same has remained unexplained. 4. The Ld. PCIT out to have been appreciated that the investment in shares was in F.Y. 2013-14. 5. The Ld. PCIT has erred in hurriedly passing the order by giving short notice of hearing notice at the last movement which is against the principles of natural justice. 6. The appellant craves leave to add, alter or amend all the above grounds of appeals at or during the course of hearing." 3. The brief facts of the case are that the assessee is an individual and has filed return of income for A.Y. 2016-17 declaring total income at Rs. 2,87,000/-. The case of the assessee was reopened under Section 147 of the Act on information received from DDIT (Inv.) and the assessment under Section 147 of the Act was finalized on 29.03.2022, by accepting the returned income. Thereafter, the PCIT, Ahmedabad-3 (hereinafter referred to as "PCIT") observed that....
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....he Revenue. The first argument of the Counsel for the assessee is that the 263 proceedings have been initiated on an incorrect premise that the order passed is prejudicial to the interest of the Revenue. The Counsel for the assessee submitted that in order to initiate proceedings under Section 263 of the Act, one of the essential prerequisite condition is that some Revenue loss should have been caused of the Revenue. However, in this case, no loss has been caused to the Revenue so as to initiate proceedings under Section 263 of the Act. The Counsel for the assessee drew our attention to the Pages 136 - 137 of the 263 notice, wherein the PCIT initiated 263 proceedings on the ground that the assessee has claimed the bogus Long Term Capital Loss (LTCL) of Rs. 3,75,14,478/- and set off this LTCL against Long Term Capital Gains (LTCG) of Rs. 18,77,191/- from the sale of shares of Saya. However, the Counsel for the assessee drew our attention to return of income filed by the assessee and submitted that during the impugned year under consideration, the assessee had only earned Short Term Capital Gains (STCG) of Rs. 18,582/- on sale of shares of stock called Anaar industries on which due t....
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....e Assessing Officer had made due enquiries during the course of assessment proceedings on this issue and thereafter, after taking the assessee's submission on record, Assessing Officer had made no additions with respect to this issue. Hence, it is not a case where there was any lack of enquiries by the Assessing Officer and the Assessing Officer, after considering the submissions filed by the assessee, had taken a legally correct view. 7. In response, the Ld. D.R. relied on the observations made by the Ld. PCIT in the 263 order. The Ld. D.R. submitted that the assessee is engaged in trading in a penny stock by the name of ECL. The operation of this stock was suspended on the stock exchange due to certain non-compliance and subsequently, the stock was also delisted from the stock exchange. Therefore, since the assessee has been actively engaged in purchase and sale of penny stocks and hence the order of PCIT is liable to be upheld for this reason as well. 8. We have heard the rival contentions and perused the material on record. On going through the facts of the instant case at the outset, we observe that the 263 proceedings have apparently been initiated by Ld. PCIT on a inco....
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....ed by the assessee in it's return of income. It is not clear as to why such sale of shares these companies for substantial sums of money had not been reflected by the assessee in it's return of income. There seems to have no justifiable reason as to why the assessee had not declared details regarding profit / loss on sale of shares of Saya and ECL respectively in the returns of income filed by the assessee for the impugned assessment year under consideration before us. From the facts placed on record it is not coming out clearly whether the assessee had effectively set off the Long Term Capital Losses on sale of shares of ECL against Long Term Capital Gains on sale of shares of Saya and therefore, did not declare the details of sale of shares of these two alleged penny stocks in it's return of income. Therefore, on perusal of the case records, evidently, the assessee has not filed the correct return of income and has only declared part details regarding sale of shares in it's return of income and hence the return filed by the assessee for the impugned year under consideration lacks for certain apparent inaccuracies. However, the Assessing Officer, in our considered view, has failed....