TaxTMI 
TaxTMI 
2024 (8) TMI 1539
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.... erred in upholding the action of the AO in reopening the case off appellant without appreciating that the AO erred in not providing a copy of the necessary sanction under section 151 of the Act to reopen the case of the Appellant. The CIT(A)/AO failed to appreciate that assuming that the necessary sanction has been obtained, the same appears to be mechanical as no prudent person duly instructed in law based on the reasons recorded could sanction such invalid reopening proceedings; 1.3 The CIT(A)/AO failed to appreciate that it is incumbent to first dispose off the objections to reopening and wait for a period of 4 weeks thereafter before proceedings to begin reassessment proceedings. The CIT(A)/AO failed to appreciate that the notice under section 143(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") dated 28.09.2020 and the draft order dated 26.09.2021 passed prior to disposal of objections vide order dated 29.09.2021 are bad in law. Consequently, the assessment order under section 147 r.w.s 144B of the Act dated 30.09.2021 (hereinafter referred to as "the impugned assessment order') is liable to be quashed; 2. Addition of Rs. 1,32,65,571/- u....
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....nny stock after giving the benefit of purchase cost of such equity shares. 6. The above grounds/sub grounds of appeal are without prejudice to each other" 3. The brief facts of the case are that the assessee is engaged in the business of trading and investment in shares. For the year under consideration, the assessee filed its return of income on 30/09/2013 declaring a total loss of Rs. 54,269. The return filed by the assessee was selected for scrutiny, and vide order dated 30/03/2016 passed under section 143(3) of the Act total income of the assessee was assessed at Rs. Nil. Subsequently, on the basis of the information received from DDIT (Inv.), Unit-8(2), Mumbai that scrips of NYSSA Corporation Ltd and M/s ACI Infocom Ltd were used by a syndicate of persons for providing accommodation entries of bogus long-term capital gains/bogus short-term capital loss/bogus business loss of entries to various beneficiaries, and the assessee is one of the beneficiary, who has received sales value of Rs. 1,03,29,744 from the sale of scrip of NYSSA Corporation Ltd and Rs. 29,66,102 from the sale of scrip of M/s ACI Infocom Ltd., proceedings under section 147 of the Act were initiated....
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....es. 4. As per the list of beneficiary forwarded along with the information, the assessee is the beneficiary of such accommodation entry in the scrip of NYSSA Corporation Ltd and has received sale value of Rs. 1.03,29,744/-during the FY 2012-13. 5. Information has also been received from Dy. Director of Income-tax (Investigation), Unit 8(2), Mumbai vide email dated 07/07/2019. As per this information, the investigation wing of the income tax department conducted enquiries in the scrip of penny stock, M/s ACI Infocom-Ltd-and-found that the scrip of M/s ACI Infocom Ltd is a penny stock, listed in BSE and this company has been used to facilitate introduction of unaccounted income of members of beneficiaries in the form of exempt capital gain or short term capital loss in the their books of account. It is also informed that share price of M/s ACI Infocom Ltd. rose from Rs. 2.63/- in 24.08.2011 and peaked to Rs 21.90 in 21.02.2013 Subsequently the share price was dropped to Rs. 2:93 in 20.08.2013. 6. The assessee is beneficiary of share transactions of M/s. ACI Infocom Ltd during year. In this regard, the Dy. Director of Income-tax (Investigation), Unit 8(2), M....
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....es and perused the material available on record. As per the assessee, it is a trader in shares, and for the year under consideration sold part of the opening stock of shares of M/s ACI Infocom Ltd for a consideration of Rs. 15,92,503, resulting in a profit of Rs. 9,57,269. Further, during the year, the assessee again sold shares of M/s ACI Infocom Ltd for a consideration of Rs. 13,69,150, which resulted in a profit of Rs. 7952. As per the assessee, the proceeds of the sale of shares of M/s ACI Infocom Ltd were credited to the profit and loss account and duly offered for tax as business income. Further, during the year, the assessee sold the entire opening stock of 84,000 shares of NYSSA Corporation Ltd for a consideration of Rs. 1,03,03,918, which resulted in a profit of Rs. 5,43,118. Similarly, the assessee credited the sales consideration on the sale of shares of NYSSA Corporation Ltd to the profit and loss account and offered the same to tax as business income. Therefore, it is the plea of the assessee that from the sale of shares of NYSSA Corporation Ltd and M/s ACI Infocom Ltd, during the year under consideration, it has earned profit which was offered to tax as business incom....