AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1069
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...., for the Assessment Year 2016-17. 2. The assessee has raised the following grounds of appeal: 1. That, Ld. PCIT Ahmedabad, Ward (5)(3)(2) erred in assuming jurisdiction under Section 263 of the Act and in setting aside order dated 16/03/2022 passed by the Assessing Officer in the case of assessee even when none of the jurisdictional conditions requisite for invoking section 263 were grossly missing. 2. The Ld. PCIT erred in holding that the AO has not verified the issue of accommodation entry in the form of exempt Long Term Capital Gain u/s 10 (38) of the Act, amounting to Rs. 25,98,752/- in a penny stock scrip Toyam Industries Ltd., even when complete verification of the transaction was done by the Assessing Officer w....
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....posing to revise the assessment on the ground that the order dated 16.03.2022 passed by the Assessing Officer was erroneous in so far as it was prejudicial to the interests of the Revenue. Accordingly, the Ld. PCIT set aside the said assessment order. 5. Being aggrieved by the order of the Ld. PCIT, the assessee is in appeal before us. 6. The Ld. Counsel for the assessee before us submitted a detailed written submission in support of her claim, along with supporting documentary evidence, which were also furnished before the Assessing Officer during the course of assessment proceedings, as under: a. That, the increase in the quantity of sold stock as compared to purchased stock is attributable to the sub-division [stock-splitt....
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.... payment of purchase consideration from the bank account of assessee; v. Bank Statement evidencing receipt of sale consideration into the bank account of assessee; vi. Contract Note evidencing purchase of stock through registered broker i.e. M/s Kamalakshi Finance Corporation Ltd. vii. Copy of Income Tax Return; viii. Computation of Income; ix. P&L Account of Shares; x. Capital Account; and xi. Balance Sheet. xii. Copy of Board Resolution, Minutes of Meeting, Newspaper publication etc. evidencing change of name of company from M/s Ojas Asset Reconstruction Company Ltd. to M/s Toyam Industries Ltd. 6. We have carefully considered the rival submissions and perused the ....
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....refore, the amounts needed to be added back to the total income. The Ld. PCIT further held that since the above issues were not verified while finalizing the assessment, the assessment order passed was erroneous and prejudicial to the interest of the Revenue. 8. We find that the assessee has replied vide letter dated 26.02.2022 about the scrip and the details of purchase and sale. During the year, the assessee sold 98501 shares out of 2,00,000 shares and the balance 101,499 shares are reflected in the balance sheet as closing balance. The assessee has paid an amount of Rs. 2 lakhs by cheque No. 252709 on 30.05.2014. The Assessing Officer has issued notices to the assessee during the assessment proceedings and called for entire details an....
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....un-sustained and unexplained. Thus, it was concluded that Toyam Industries Ltd. is paper entity with no genuine business activity and its scrip is nothing but penny stock which has been used to provide bogus profit/loss to the beneficiaries. In view of the above, it is evident that the assessee has earned bogus long term capital gain of Rs. 25,98,752/- during the yar through manipulative trading of penny stock for claiming exemption u/s 10(38) of the Act. The Assessing Officer should have added the assessee bogus transaction as such credits u/s 68 of the Act. Therefore, the order of the A.O. is erroneous which caused loss of revenue." 10. On going through the reasons recorded by the Assessing Officer, the show-cause notice issue....
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....Assessing Officer has taken one, the order cannot be termed erroneous merely because the Ld. PCIT prefers another view. Similarly, the Hon'ble Bombay High Court in Gabriel India Ltd. v. CIT (1993) 203 ITR 108 (Bom) held that once the Assessing Officer has made due enquiries and taken a conscious decision, the order cannot be branded as erroneous merely because it is not elaborate or detailed in its reasoning. In the present case, the record clearly demonstrates that the Assessing Officer conducted adequate enquiry, examined all relevant aspects, and took a plausible view based on evidence; therefore, the assumption of jurisdiction under section 263 is legally untenable. 12. The reliance placed by the Ld. PCIT on the decision of the Hon'b....