TaxTMI 
TaxTMI 
2025 (7) TMI 889
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....information was received by the Assessing Officer that the assessee is one of the beneficiaries who had entered into suspicious transaction and traded in the scrip of M/s. JRI Industries & Infrastructure Ltd., a penny stock company during the Financial Year (FY) 2012-13. The assessee had made total transaction of Rs. 102,55,113/- in this penny stock company and, according to the Assessing Officer, he had not offered income resulting from the said transaction. Therefore, the case was reopened under Section 147 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') after recording reason and a notice under Section 148 of the Act was issued. The assessment was completed under Section 147 read with section 144B of the Act on 31.03.2022 at a total income of Rs. 1,04,52,603/- wherein addition of Rs. 88,45,598/- was made on account of unaccounted income in non-genuine share transactions and loss of Rs. 14,09,515/- claimed by the assessee in such transaction was also disallowed and added to the income of the assessee. 5. Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was decided by the Ld. CIT(A)....
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....otice under Section 148 of the Act was not proper. Further that there was no escapement of income as all the transactions were duly disclosed in the return of income filed by the assessee. 9. We have carefully considered the rival submissions and gone through the material brought on record. The finding given by the Ld. CIT(A) on the reopening of the case is found to be as under: - Decision : I have carefully considered the above submission of the appellant and gone through the AO's observation & decision in assessment order and find that this issue had arisen also in A.Y- 2014-15. I find from the assessment order that the AO as per information in possession, after analysing the data pertaining to the appellant has found that the appellant has made transaction of penny stock amount to Rs. 1,02,55,113/- and the appellant has not offered income resulting for the said transaction and to verify the same the case was reopened by issuance of notice u/s 148 of the I.T Act. While reopening the case vide notice u/s 148 dated 30.03.2021 for the A.Y 2013-14, I find no approval is mentioned in the assessment order to be taken by the AO from the Competent Authority before initiation ....
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....hat the assessee did not offer income resulting from the transaction in the above penny stock and that the transaction was unexplained and there was failure on the part of the assessee to disclose the details of these transactions. 11. It is found that the reason as recorded by the Assessing Officer was self-contradictory. When the assessee had disclosed the loss of Rs. 85,29,272/- incurred in the penny stock transactions in the return of income, the transactions were duly disclosed in the return and there was no escapement of income. There was no discussion in the reason as to how and why this loss was bogus. Therefore, the basic condition to initiate the proceeding under Section 147 of the Act that there was an escapement of income is found missing in the reason as recorded by the Assessing Officer. The fact recorded by the Assessing Officer in his reason that the assessee did not offer income resulting from the transactions in the penny stock, is itself incorrect as the assessee had disclosed loss of Rs. 85,29,272/- incurred in the penny stock transactions in the return of income. In view of this fact the finding of the AO that "it is established that the assess has not offer....
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....Kolkata that the shares of M/s. Shree Shaleen Textiles Limited is one of the penny scripts which has been utilised with the sole objective of providing accommodation entry of LTCG/STCL and assessee has claimed bogus loss of Rs. 31,58,863/- on trading in such shares and claimed as set off from the LTCG from sale of house property. (ii) The assessee was unable to furnish sufficient proof for purchase of shares of M/s. Shree Shaleen Textiles Limited. (iii) The financial results of the Penny Stock used for the purpose clearly indicate that its quoted price at the peak was the result of rigging. (iv) The above facts have been independently also been confirmed by SEBI. 16. Shri Hargovind Singh, Ld. Sr. DR submitted that the assessee had purchased 70500 shares of Shree Shaleen Textiles Limited through broker Centrum Broking Limited at a cost of Rs. 43,37,968/- which was sold after few months for a meagre amount of Rs. 11,79,781/-. He submitted that the reason for such huge loss within a short period of time was not explained by the assessee and that such behaviour was against the principle of human probability which proved that the transaction was bogus. He, ....