TaxTMI 
TaxTMI 
2025 (4) TMI 1259
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....cting in penny stocks namely M/s VAS Infrastructures Ltd and M/s Neha International Ltd. On the facts and circumstances of the case and in law, the La.CIT(A) erred in deleting the addition made of Rs. 1,27,358/- on account of unexplained expenditure u/s 69C of the IT. Act, 1961 by the AO in respect of cash commission paid to get accommodation entry in the form of penny stocks by the assessee to the share brokers and promoters. On the facts and in the circumstances of the case, the Hon'ble ITAT is requested to entertain this appeal, though, the tax effect is below the monetary limit prescribed in the CBDT Circular no. 05/2024 dated 15.03.2024, however, the case falls under the exception as laid down in Para 3.1(h) of the Circular. 4. The appellant craves leave to amend or alter or add a new ground which may be necessary." 3. Brief facts from the records are that assessee filed his return on 30.09.2013, reporting total income at Rs. 6,81,860/-. Subsequently, return was revised on 31.10.2013, with revised total income reported at Rs. 23,51,190/-. In the instant case, ld. AO observed based on information received from DDIT(Inv.), Unit-5(1), Mumbai, tha....
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....in several scrip. In this respect, for the year under consideration itself, it was submitted that assessee had reported short term capital gain u/s 111A of Rs. 20,17,307/- which was arrived at after setting off short term capital loss in certain scrips. In this respect, the details as furnished and forming part of the Paper Book are extracted below: 4.2. Further, out of the above tabulated details, assessee extracted the transactions pertaining to the two scrips in which ld. AO had taken an adverse view i.e. Neha International and VAS Infrastructure in which assessee incurred short term capital loss, viz. Rs. 23,58,781/- for Neha International and Rs. 1,05,24,693/- for Vas Infrastructure, totaling to Rs. 1,28,72,474/-. The same are also extracted below for ready reference: 5. Ld. CIT(A) objectively considered the submissions made by the assessee, duly corroborated by documentary evidence and came to factual conclusion to delete the additions so made by the ld. AO. His observations and findings in this respect are extracted below: "In this ground, the assessee contested the addition made on account of short term capital loss as unexplained cash credits. I hav....
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....ck movement is very much commensurating with the performance of the company and it has decreased from Rs. 106 to Rs. 33.79 which is only decrease of about 02 times which is quite common in the stock market and is not very unusual fall. Thus, none of the AO's findings justify the circumstances which may imply that the assessee was indulged in manipulation of stock prices. Moreover, in the stock market, purchasers and sellers are totally unknown to each other and it was only handled by the brokers through Bombay Stock. Exchange. Therefore, there is no scope for any manipulation and the AO has also not brought any specific adverse material against the assessee to prove that the stocks are manipulated. Accordingly, the AO's addition is not justified ii) Neha International Ltd.: In this case also verification of financials shows that for the AY 2011-12 profit was at 17.99 lakhs profit before tax and for AY 2012-13 it is at Rs. 6.52 lakhs and for AY 2013-14 it is loss of Rs. 1.5 crores. Thus, the assessee's financials proves that performance of the company was decreasing. Accordingly, stock prices were decreased from Rs. 104 to Rs. 57 which is fall of only 100% ....
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....ny cogent material on record. It is also a fact on record that assessee is a regular investor, transacting and holding shares in several scrips. The finding arrived at by the ld. Assessing Officer is thus purely an assumption based on conjectures and surmises. In our thoughtful considerations to the facts and circumstances of the case, it is not in controversy that assessee has discharged his burden by submitting the relevant documents, details of which are already noted above, forming part of the paper book. 6.2. Reliance placed by the ld. Assessing Officer on the report of investigation wing without further corroboration based on cogent material does not justify the conclusion that the impugned transaction is bogus, sham and part of racket of accommodation entries. It does not prove that the assessee has carried out the impugned transactions of purchase and sale of shares in connivance with the people who were involved in the alleged rigging of share prices. In absence of any such material, enquiry and examination, the addition made pertaining to receipt of sale consideration of the impugned transaction cannot be sustained. In our considered view, ld. Assessing Officer has not....
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....3 Naha International Ltd 1063 25-Aug-11 12-Apr-12 61.201 61,201 1,12,374 -51,173 Amar Raja Bat 25000 03-Jan-13 16-Jan-13 77,23,672 77,23,672 6471955.26 12,51.716 Hind Mills 15000 30-Jan-13 13-Feb-13 50,56,174 50,56,174 4394413.77 6,61,761 Berger Paints 50000 10-Jan-13 15-Feb-13 91,90,097 91,90,097 7631017.93 15,59,079 50000 22-Jan-13 20-Feb-13 78,78,295 78,78,295 6159948.14 17,18,346 ACC Ltd 7500 25-Feb-13 08-Mar-13 95,01,837 95,01,837 9728984.01 -2.27,147 Ajanta Pharma 23250 18-Jan-13 05-Feb-13 1,39,69,072 1,39,69,072 9628991.35 43,40,080 La opala RG 30000 22-Feb-13 13-Mar-13 1,22,70,088 1,22,70,088 8570798.47 36,99,290 Canara Bank 15000 01-Jan-13 14-Jan-13 81,16,963 81,16,963 7509974 6,06,989 Bambind Agro 40000 09-Jan-13 21-Jan-13 37,86,653 37,86,653 2495984.88 12,90,668 Vas Infrastructure Itd 5000 16-Jun-11: 03-Apr-12 1.96,550 1,96,550 5,34,578 -3,38,028 Vas Infrastructure Itd 4000 16-Jun-11. 04-Apr-12 1,85,720 1,85,720 4,27.662 -2,61,942 Vas Infrastructure ltd 3000 16-Jun-11 04-Apr-12 1,30,440 1,30,440 3,20,747 -1,90,307 Vas Infrastructure ltd 7000 16-Jun-11 09-Apr-12 3,19,410 3,19,410 7.48,409 -4,28,999 Vas Infrastruc....
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....ECURITIES LIMITED 25/08/2011 551,703 (254,077) 12/04/2012 NEHA INTERNATIONAL LTD 1083 / 25 61,201 ALACRITY SECURITIES LIMITED 25/08/2011 112,374 (51,173) 12/04/2012 NEHA INTERNATIONAL LTD 100/ 26. 5,803 ALACRITY SECURITIES UMITED 25/08/2011 10,376 (4,573) 13/04/2012 NEHA INTERNATIONAL LTD 38500 __ 7 2,239,197 ALACRITY SECURITIES LIMITED 25/08/2011 4,029,094 (1,789,897] 50329 2,897,715 5,256,496 [2,358,781] 500 329 23) 5317 / 100/ DATE OF SALE NAME OF SCRIPT QTY SOLD SALE VALUE BROKER DATE OF PURCHASE QTY PURCHASED PURCHASE VALUE STCG/STCL 03/04/2012 VAS INFRASTRUCTURE LTD 5000, 196,550 ALACRITY SECURITIES LIMITED 16/06/2011 534,578 (338,028) 04/04/2012 VAS INFRASTRUCTURE LTD 30002) 130,440 ALACRITY SECURITIES LIMITEID 16/06/2011 320,747 (190,307) 04/04/2012 VAS INFRASTRUCTURE LTD 4000 : > 31 165,720 ALACRITY SECURITIES LIMITED 16/06/2011 427,662 (261,942) 07/04/2012 VAS INFRASTRUCTURE LTD 7000 4 319,410 ALACRITY SECURITIES LIMITED 16/06/2011 748,409 (428,999) 10/04/2012 VAS INFRASTRUCTURE LTD 7000 335,090 ALACRITY SECURITIES LIMITED 16/06/2011 748,409 (413,319) 16/04/2012 VAS INFRASTRUCTURE LTD 8000 323,605 ALACR....