Assessee's appeal dismissed as PCIT correctly invoked section 263 for inadequate inquiry on penny stock LTCG exemption claims

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....HC dismissed the assessee's appeal challenging PCIT's revision order under section 263. The assessee claimed LTCG exemption under section 10(38) on penny stock transactions. PCIT invoked Explanation 2(a) to section 263, finding the assessment order erroneous and prejudicial to revenue interest due to AO's failure to conduct adequate inquiry despite receiving investigation report identifying the company as penny stock operator. Tribunal upheld PCIT's direction for fresh assessment with proper verification. HC rejected assessee's contentions regarding availability of two views and breach of natural justice, holding concurrent findings justified as AO failed to make necessary inquiries regarding penny stock transactions before allowing LTCG exemption.....