TaxTMI 
TaxTMI 
2024 (5) TMI 1561
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....d on facts and in law confirming the addition made by the Ld. AO of Rs. 9,72,958/- on account of alleged commission. " 3. Brief facts of the case are that the assessee is a private Limited company doing the business of Real Estate, Share and Securities. The return of income was filed by the assessee on 25.11.2014 declaring loss of Rs. 1,849/ -. The case was selected for scrutiny through CASS. Accordingly, a notice u/s 143(2) was issued on 18.09.2015 fixing hearing for 24.09.2025, which was duly served on the assessee. Notice u/s 142(1) along with questionnaire were issued on various dates the ld. AR of the assessee, attended the proceedings, and filed written replies and documents which have been placed on record; produced supporting details in respect of ROI filed which are test checked and the facts of the case were discussed by the ld. AO. 3.1 On account of the searches conducted on account of the searches conducted by the Investigation Wing of the Department at various places throughout the country. During the searches & as per the information made public by the SEBI, it is discovered that various syndicates have arranged accommodation entry of bogus LTCG, Bogus STCG, Bog....
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....as disallowed the loss of Rs. 1,62,15,971/-, claimed by the assessee out of these purported share transactions during the financial year 2013-14 (AY 2014-15). It is also unearthed during the course of investigation by the Wing that the beneficiaries have paid commission @ 6% or more on acquiring accommodation entries for bogus short term loss. Therefore, 6% commission paid i.e. Rs. 9,72,958/- (6% of Rs. 1,62,15,971/-) is treated as undisclosed expenditure for acquiring accommodation entry as discussed above. 4. Aggrieved from the order of the assessing officer, assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds of the appeal so raised by the assessee, the relevant finding of the ld. CIT(A) is reiterated here in below :- "4.5 I have considered the submission of Ld. A/R and carefully gone through the material available on record. The Assessing Officer disallowed the bogus loss claimed of Rs. 1,62,15,971/- by the appellant and also made addition of commission of Rs. 9,72,958/- paid for acquiring accommodation entry. The AO mentioned following reasons for making the addition- a. The investigation wing of income tax department conducted searc....
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....ty commission is also charged by these operators from the beneficiaries of these accommodation entries. j. The share prices and sale purchase transactions are not genuine but planned to provide entries of fictitious gains and losses to the beneficiaries by these operators. k. The appellant failed to justify purchase and sale of these shares. l. The appellant has not given name of the person who recommended purchase of these shares to the appellant m. The appellant is not even aware about the person after talking with whom the order to purchase these shares were placed. n. These transactions undertaken by the appellant are sham transactions and colorable device to evade tax. o. The AO has applied test of human probabilities and genuineness and relying on the judgment of Hon'ble Supreme Court in the case of Sumati Dayal Vs CIT (214 ITR 801) and other decisions the AO held that transactions undertaken by the appellant are not genuine. p. The appellant failed to prove that there was no such scheme as identified by the Income Tax Department, q. The appellant failed to prove that no benefit derived by it from suc....
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....is no tax liability for him .. On the facts of this case the decision of hon'ble High Court of Calcutta in the case of Commissioner of Income Tax Vs Swati Bajaj (2022) 446 ITR 56 (Calcutta) is applicable. Hon'ble High Court held as under----------- In this case also the appellant has not specifically indicated as to how he was prejudiced by not providing of cross examination. Unless and until the appellant shows and proves that she/he was prejudiced on account of such report/statement mere mentioning that non- furnishing of the report or non-availability of the person for cross examination cannot vitiate the proceedings. The assessees have miserably failed to prove the test of prejudice or that the test of fair hearing has not been satisfied in their individual cases. It is well settled principle of law as declared by the Hon'ble Supreme Court in the case of Sumati Dayal Vs. CIT (214 ITR 801) (SC) that the true nature of transaction have to be ascertained in the light of surrounding circumstances. It needs to be emphasized that standard of proof beyond reasonable doubt has no applicability in determination of matters under taxing statutes. In ....
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....inating information/ evidence available with AO. In the case of Sumati Dayal V. CIT (1995) 80 Taxman 89 (SC), the Hon'ble Supreme Court has dealt with the relevance of human conduct, preponderance of probabilities and surrounding circumstance, burden of proof and its shifting on the Department in cases of suspicious Circumstances, by following observations: " ..... It is, no doubt, true that in all cases in which a receipt is sought to be taxed as income, the burden lies on the department to prove that it is within the taxing provision and if a receipt is in the nature of income, the burden of proving that it is not taxable because it falls within exemption provided by the Act lies upon the assessee, But in view of section 68, where any sum is found credited in the books of the assessee for any previous year, the same may be charged to income-tax as the income of the assessee of that previous year if the explanation offered by the assessee about the nature and source thereof is, in the opinion of the Assessing Officer, not satisfactory. In such case there is prima facie eYid-lice against the assessee, vtz, the receipt of money, and if he falls to rebut the same, the sa....
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....ticular case. (5) The circumstantial evidence can, with equal facility, be restored to in proof of a fact in issue which arises in proceedings for the assessment of taxes both direct and indirect, circumstantial evidence can be made use of in order to prove or disprove a fact alleged or in issue. In fact, in whatever proceedings or context inferences are required to be drawn from the evidence or materials available or lacking, circumstantial evidence has its place to assist the process of arriving at the truth. It will also be worthwhile to consider the nature of burden of proof on the AO for proving a fact or circumstances in the income tax proceedings. The questions raised about the tax liability by the AO are to be answered by the assessee by furnishing reasonable and plausible explanations. If assessee is not forthcoming with proper or complete facts or his statement or explanation is contradictory, drawing of suitable inferences and estimation of facts is inevitable. In view of the above discussion, the arguments raised by the appellant are found to be not acceptable and the addition made by AO with regard to disallowance of bogus loss and unexplained expendi....
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....aring in the Ld. AO order page no. 33 to 36. The point wise query and submission on 15.12.2016 made placed on record during the assessment proceeding is as under :- A. INVOLVED IN BOGUS ACCOMMODATION ENTRIES Hon'ble Sir, the Ld. AO mentioned that Director of Income Tax (Inv) Kolkata conducted a survey u/s 133A on various share brokers and as per their enquiry a huge syndicate of entry operators, share brokers, money lenders involved in bogus accommodation entries were unearthed. In reply the assessee requested to provide the details of such enquiries a/w evidences the assessee may analyzed that how & in which reference the assessee company's name was found in the above enquiry. The assessee also made the request to provide the details in reference to assessee Company. B. UNACCOUNTED CASH IS UTILIZED TO PURCHASE SHARE AT A VERY ARTIFICIALLY INFLATE PRICE The Ld. AO mentioned that large scale manipulations has been done in the market price of share of certain companies listed in the BSE. It was also stated that the unaccounted cash of such persons (beneficiaries) is utilized to purchase share of such companies at a very artificiall....
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....oss of Rs. 1,62,15,971/- is bogus though it carried from audited books of accounts. F. CLAIM NO ADVERSE INFERENCE ON SUBMISSION OF THE ASSESSEE The assessee submitted as under :- 1) We also submit that all above transactions of sale and purchase of shares are done through online in Bombay Stock Exchange which is a Govt. Controlled Agency. 2) All the transactions are mentioned in assessee's demat a/c. 3) Contract notes for all the above transactions have already been submitted vide our letter dated 06.12.2016. 4) We are submitting copy of Demat account as available with the assessee; however detailed copy may also be called from the broker by your honour. 5) All payments for above transactions are reflected in J&K bank a/c of the assessee co. 6) The assessee purchased shares of all companies having high net worth of more than Rs. 25 crore and listed on BSE. Therefore, these companies cannot be called penny stock companies. 7) All shares are purchased in expectation of earning profit at the market price. 8) The assessee have to sold shares at low price because the share index was going down ....
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....e Pennystocks. 3) The Ld. AO stated that no justification has been furnished for the purchase of shares of Turbotech, Global Infratech, Indian Infotech and SRK Ind whereas the fact is that assessee stated that all shares are purchased in expectation of earning profit at the market price. The assessee purchased shares of all companies having high net worth of more than Rs. 25 crore and listed on BSE. 4) The assesses had failed to tell the name of the person who had recommended the purchase of these shares whereas the fact is that assessee stated that all shares are purchased in expectation of earning profit at the market price. Further your honour it was the trade decision for which the assessee is always free to take the decision. 5) The assessee is not even able to tell the details of the person with whom he had spoken/instructed for placing orders for purchase of shares of Turbotech, Global Infratech, Indian Infotech and SRK Ind. Whereas the assessee clearly stated that the all above transactions of sale and purchase of shares are done through online in Bombay Stock Exchange which is a Govt. Controlled Agency. 6) Without considering the submiss....
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....own cash which he received back through some clandestine deals. It is also just assumption. 12) The Ld. AO further stated that this entire edifice through which the assessee claimed to have earned huge bogus loss within a very short span of time fails the tests of both genuineness and human probabilities. In the case of Sumati Dayal Vs CIT (214 ITR 801) the apex court propounded the principle of human probabilities and applying it in that case held that whether apparent is real is to be decided on the basis of incriminating circumstances. The supreme court even took note of the scheme of converting black money Into white through the route of lottery winnings etc by stating that "In this context it would be relevant to mention that In order to give effect to the recommendations of the Direct Taxes Enquiry Committee (under the Chairmanship of Justice K N. Wanchoo, retired Chief Justice of India) the definition of 'income' in section 2(24) of the Act was amended with effect from April 1,1972 by the Finance Act, 1972 so as to include within its ambit, winnings from lotteries, cross word puzzles, races including horse races, card games and other games of any sort or fro....
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....a mere colourable device, devised with the aforementioned objectives. 14) The Ld. AO hold that the detailed analysis of evidences available on record and the case laws quoted above provide enough support against the argument of the assessee regarding assessment being based on mere suspicion or presumption That there was a scheme is not in doubt and that the assessee is a beneficiary is also an admitted fact. The onus was therefore, on the assessee to prove that either there was no such scheme and even if there was one, the benefit to the assessee was as a result of genuine transaction The assessee has failed to discharge this onus and therefore, the only Inescapable conclusion is that the assessee has taken entry of bogus loss. 15) And accordingly, the Ld. AO disallow the loss of Rs. 1,62,15,971/-, claimed by the assessee out of these purported share transactions during the financial year 2013-14 (AY 2014-15). 4.4. Being aggrieved the assessee filed an appeal before the Ld. CIT (Appeals) and submitted as appearing in Ld. CIT (Appeals) Order page no. 04-14. The relevant portion is as under :- 1) Your honour the assessee is a Pvt. Ltd. company doin....
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....eals) that Ld. AO on the basis of assumption, presumptions surmises and conjectures made the disallowance of claim made by the assessee. Ld. Assessing Officer made the disallowance by relying on the following .- a) SEBI has suspended trading in 26 scripts and almost 84 listed companies are being used for providing accommodation entries and are penny stock companies. b) On the date of transaction the trading in the shares of Turbotech engineers Pvt. Ltd, Global Infratech Ltd, SRK Ind Ltd and Indian Infotech Ltd were active. Ld. Assessing Officer has not stated the date of suspension of trading in the shares of above referred companies Ld. AO has not mentioned that how these companies are penny stock companies. Penny stock companies have not been defined in the Act. It is also submitted that these companies whether penny stock company or not were permitted for trading in the stock exchanges by SEBI. The transaction made by the assessee is genuine. c) Statement of Sh. Sanjay Vora looking after the office of Ms Anand rathi Shares & Stock Brokers limited were taken during a survey operation on 8th April 2015 and as per Ld Assessing Officer he accepted that he ....
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....case of the assessee. Rather, LD A.O. has not discharged his burden to prove the transactions made by the assessee not real and not genuine. We place our reliance on the following case Laws :- 1. Hon'ble ITAT Mumbai Bench Mumbai in the case of ITO v/s Arvind Kumar Jain HUFITA No. 4862/Mum/2014. 2. Hon'ble Raj. High Court in the case of CIT v/s Smt. Pooja Agarwal, Jaipur. 3. Smt. Bharti Arvind Jain v/s ITO (ITA No 6102/Mum/2016)- ITAT SMC Bench, Mumbai. 4. ITO v/s Mis Indravadan Jain HUF (ITA No. 4861/Mum/2014)- ITAT ' Bench, Mumbai 5. Chandrakant babulal Shah vs The Assessing Officer, ward-16 (2)(4) (ITA No.6108/Mum/2009)- ITAT 'C' Bench, Mumbai 6. Mayur M. Shah (HUF) vIs ITO (ITA No. 2390/Mum/2013)-ITAT 'SMC' Bench, Mumbai. 7. Asst.Commissioner of LT. 14(3) vs Shri Ravindrakumar Toshniwal (ITA No.5302/Mum/2008)-ITAT 'D' Bench, Mumbai. 8. Smt. Durgadevi Mundra vs. ITO (ITA No. I 1 75/Mum/2012)- ITAT 'SMC' Bench, Mumbai. 9. Dalpat Singh Choudhary vs. Asstt. CIT 2012 Taxpub (DT) 0923 (Jod Trib): (2012) 143 TTJ 0500: (2012) 065 DTR 0148 10. Mr.....
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.... Finance Ltd. what evidences were available with him? 12) The Ld AO has mentioned in the assessment order that M/s East India Securities Ltd., M/s Fort Share Broking Pvt. Ltd. & the key persons, M/s Manu Stock Broking Pvt. Ltd; M/s Madhya Pradesh Stock Exchange Ltd and their sub broker Mr. Bhagwan Das Agarwal and Pawan Kumar Purohit, M/s Nakamichi Securities Ltd; M/s Intellect Stock Broking Ltd., M/s SMC Global Securities Ltd and their sub broker Pawan Kumar Kayan were surveyed. As per Ld AO they have admitted that they have dealt in providing entries in Global Infratech and SRK Ind. In this respect the assessee submitted before Ld. CIT (Appeals) that the assessee does not know these persons. No transaction of sale or purchase of shares or any business has been done by the assessee with these persons. It has not been stated by Ld AO that the assessee has done any business with the persons. Assessee is not aware about the locus standi of these persons in respect of transactions made by the assessee. Penny Stock Company has not been defined in the act. There was no ban in purchasing and selling of Global Infratech and SRK Ind. at the time when the assessee entered into purch....
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....es were received through banking channel. Books of accounts of the assessee company are duly audited and all the transactions are duly recorded therein. No defect whatsoever was pointed out by Ld A.O. No ingenuineness of transaction was proved. Simply on the assumptions, presumptions, surmises and conjectures loss claimed by the assessee company has been disallowed. 14) Yourhonour it was submitted before Ld A.O. that all the purchases and sales of shares were made online on the portal of stock exchange through the broker M/s Master Capital services Ltd. All the contract notes of purchases and sales were submitted before Ld A.O. Copy of D Mat account was also submitted to Ld A.O. 15) Payment of all the purchases were made through cheque /RTGS, all the payments of sales were received through banking channel. All of these evidences were found correct by Ld A.O. as nothing was brought on record to prove these wrong. 16) YourhonourLd A.O. did not make any enquiry from the Bombay Stock Exchange or from the broker M/s Master Capital Services Ltd. The addition has been made simply on the basis of assumptions, presumptions, sunnises and conjectures. 17) T....
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.... tips of purchases and sales are received online from unknown persons also and the order of purchases and sales were given to the broker M/s Master Capital Service Ltd. It is not material that in the office of the broker who was looking after the work. 21) The another assumptions and presumptions taken by Ld A.O. that the assessee hold the shares for a very short period, is also irrelevant because when the assessee company found that there are continue fosses and the company is loosing entire capital, the company took the decision of exit. 22) The other assumptions and presumptions taken by Ld A.O. are without any material and have no relevance with the transactions made by the assessee. 23) Your honour Ld A.O. has referred the decisions of Hon'ble Apex court in the case of Sumati Dayal v/s CIT 214/ITR/801, the case of Durga Prasad More v/s CIT and the case of MacDowell v/s CTO. In this respect it is submitted that facts of these cases are different as it is not the case to convert black money into white as the assessee company lost his capital. The transactions made by assessee are real and genuine and the entire additions have been made without maki....
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....e and fall in prices of these shares which are not related to the fundamentals or any projections made by these companies. D. The rise and fall were disproportionate to real financial position of the companies.Steep decline in the shares purchased by the appellant was also not related to financials of the companies. The pattern of chart of share price of these companies is bell shaped typical to these types of manipulated stocks where the price rises without any reason and falls without any reason. The prices were clearly manipulated by the operators. The share prices and sale purchase transactions are not genuine but planned to provide entries of fictitious gains and losses to the beneficiaries by these operators. E. The appellant failed to justify purchase and sale of these shares. F. The appellant has not given name of the person who recommended purchase of these shares to the appellant. G. The appellant is not even aware about the person after talking with whom the order to purchase these shares were placed. The appellant failed to prove that there was no such scheme as identified by the Income Tax Department. H. The appellant failed....
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....ons 143(2) and 142(1) they have been directed to furnish the documents, the assessee have complied with the directions, appeared before the Assessing Officer and in many cases represented by Advocates/Chartered Accountants, elaborate legal submissions have been made both oral and in writing and thereafter the assessments have been completed. Nothing prevented the assessee from mentioning that unless and until the report is furnished and the statements are provided, they would not in a position to take part in the inquiry which is being conducted by the Assessing Officer in scrutiny assessment under section 143(3). The assessee were conscious of the fact that they have not been named in the report, therefore made a vague and bold statement that the non-furnishing of report would vitiate the proceedings. Therefore, merely by mentioning that statements have not been furnished can in no manner advance the case of the assessee. If the report was available in the public domain as has been downloaded and produced by the revenue, nothing prevented the assessees who are ably defended by the Chartered Accountants and Advocates to download such reports and examine the same and thereafter put ....
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....erson. Thus, this principle could be attracted to a set of circumstances that satisfies its conditions and was applicable to taxing proceedings. M. The Ld. CIT Appeals was in agreement with the AO that the transactions relating to the claim of loss come within the ambit of "suspicious transactions", and therefore the rules of suspicious transactions would apply to the case. Payment through Banks, performance through stock exchange and other such features are only apparent features. The real features are the manipulated and abnormal price of off load and the sudden dip thereafter. Therefore, the Ld. CIT Appeals stated that he has to reach the inevitable conclusion that the transactions as discussed by the AO fall in the realm of "suspicious" and "dubious" transactions. The AO has therefore necessarily to consider the surrounding circumstances, which he indeed hasdone in a very meticulous and careful manner. N. The Ld. CIT Appeals hold that the tax liability in the cases of suspicious transactions, is to be assessed on the basis of the material available on record, surrounding circumstances, human conduct, preponderance of probabilities and nature of incriminating i....
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....ist of evidence afforded by the bearing on the fact to be proved, of other and subsidiary facts, which are relied on as inconsistent with any result other than the truth of the principal fact. It is evidence of various facts, other than the truth of thetime to time are - (1) the circumstances alleged must be established by such evidence, as in the case of other evidence. (2) the circumstances proved must be of a conclusive nature and not totally inconsistent with the circumstances or contradictory to other evidence. (3) although there should be no missing links in the case, yet it is not essential that every one of the links must appear on the surface of the evidence adduced; some of these links may have to inferred from the proved facts; (4) in drawing those inferences or presumptions, the Authorities must have regarded to the common course of natural events, to human conduct and their relation to the facts of the particular case. (5) The circumstantial evidence can, with equal facility, be restored to in proof of a fact in issue which arises in proceedings for the assessment of taxes both direct and indirect, circumstantial evidence can be made use of in order to prove or disprov....
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.... 3. Copies of bank account to prove the receipts and payment. 4. Address and contact No. of brokers. 5. Copies of DMat A/c 6. Copies of latest Master Data of all the companies 7. Payment of consideration for the purchases and receipts of consideration on sales were made received through banking channel. D. Your honour, the assessee submitted before Ld. CIT (Appeals) that from the above facts, it is clear that the above mentioned transactions of sale & purchase are genuine. E. Purchases were made from identifiable person. F. Payment of purchases were made through a/c payee cheque. G. Transaction in the shares have been recorded in the books of accounts. H. Sale of shares was made through registered broker of Stock Exchange. The broker issued contact notes to the assessee. I. The shares were sold and purchased on the price of Stock Exchange of the particular date & particular time. J. Scrutiny transaction tax, service tax, turnover tax etc were paid on every transaction and the assessee lawfully claimed the business loss .. K. Payments of sales were received through banking cha....
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....s vs. ACIT (supra) had the occasion to consider the addition made by the AO on the basis of suspicion and surmises and observed in par 46 as under :- ..................... Q. Therefore, when the Ld. AO has not brought any material on record to show that the assessee has paid over and above the purchase consideration as claimed and evident from the bank account then, in the absence of any evidence it cannot be held that the assessee has got bogus short term capital loss. The Hon'ble Jurisdiction High Court in case of CIT vs. Smt. Pooja Agrawal (supra) has upheld the finding of the Tribunal on this issue in para 12 as under :- ..................... R. In view of the above facts and circumstances of the case, the assessee request that the disallowance made by the AO is based on mere suspicion and surmises without any cogent material to show that the assessee has taken bogus loss. On the other hand, the assessee has brought all the relevant material to substantiate its claim that transactions of the purchase and sale of shares are genuine. Even otherwise the holding of the shares by the assessee is not in doubt, therefore, the transaction cannot ....
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....tware Ltd. 005-007 3 Copy of Master Data of SRK industries Ltd. 008-010 4 Copy of Master Date of Global Infratech & Finance Ltd. 011-014 5 Copy of Reply dated 25/12/2016 015-018 6 Copy of Account of Agrasen Premises Pvt. Ltd. In the books of Master Capital Service Ltd. 019-020 7 Copy of Contract Notes 021-039 8 Copy of account of Sale and Purchase of shares in the books of assessee. 040-041 9 Copy of order ITA No. 4862/MUM/2014 in the case of ITO v/s Arvind Kumar Jain HUF dated 18/09/2017 042-046 10 Copy of Order ITA No. 4861/MUM/2014 in the case of ITO v/s M/s Indravadan Jain HUF and ITA No. 5168/MUM/2014 in the case of ACIT v/s M/s Indravadan Jain HUF dated 27/05/2016 047-062 12 Copy of Order ITA No. 2799/MUM/2015 in the case of Mr. Arvind Asmal Mehta v/s ITO dated 29/02/2016 063-071 13 Copy of case law in the case of Dalpat Singh Choudhary v/s CIT 2012 TaxPub (DT) 0923 (Job-trib, (2012) 143 TTJ 0500 and 065 DTR0 148 072-084 14 Copy of order in the Rajasthan High Court ITA No. 385/2011 in the case of CIT v/s Smt. Pooja Agarwal dated 29/02/2016 085-090 15 Copy of order IN TH....
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....price to save the company from further loss sold the shares for which the amount invested. All the records produced and placed on record are correct and have not been disbelieved by the lower authority. All the purchase and sales are routed through the online mode neither the sale nor the purchase is on offline mode which is the modus oprendi discussed in the investigation report relied upon by the revenue. The ld. AO has not examined the broker from where the assessee made purchase and sale transactions the statement relied upon by the ld. AO are recorded behind the back of the assessee. In the statement so relied upon by the revenue there is no reference or name of the assessee having indulged into the evasion of the legitimate tax by the assessee and therefore, those statement cannot bind the assessee. All the transactions are done at the online platform and all the details related to those transactions were placed on record the ld. AO did not examine those transaction with that platform provider which are recognized. 7. Per contra, the ld. DR relied upon the orders of the lower authority wherein the detailed finding is recorded giving reasoned finding that the loss claimed b....
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....order of the learned ITAT restricting the disllallowance u/s. 14A of the I.T.Act upto the exempt income earned by the assessee during the year under consideration is contrary to the clarificatory amendment by way of Explanation to Section 14A inserted by the Finance Act, 2022? c. Whether Explanation to Section 14A of the I.T.Act inserted by the Finance Act,2022 being clarificatory in nature has retrospective effect? d. Whether in the facts and circumstances of the case in law, the learned ITAT has erred in deleting the addition of Rs. 73,12,905/- made by the AO on account of disallowance of losses booked in pennystocks namely "Kappac Pharma" and "Alang Industries Gases Ltd"?" 3. Learned advocate Mr. Patel for the appellant-Revenue submitted that Questions a,b and c of the proposed questions would be taken care of by the questions which are already admitted by this Court in Tax Appeal No. 312 and 321 of 2022 in case of the respondent. Accordingly, the following question is admitted: "Whether in the facts and in the circumstances of the case and in law the Appellate Tribunal has erred in holding that disallowance under section 14A of the Act cannot....
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....and the last trading price was of Rs. 112.85 and that those scripts were still held by the appellant as stock in trade in the books of accounts. However, the AO ignored the submissions based on the premises that the transactions were incurred to reduce the profit earned and on the information that the SEBI had barred various entities for using the exchange platform for tax evasion and for allegedly engaging in fraudulent and manipulative trades in shares of BSE listed firms and that Kolkata Investigation Directorate (of the Income Tax Department) had unearthed large number of pennystocks 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 KappacPharma 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 claimin....