TaxTMI 
TaxTMI 
2026 (2) TMI 870
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....ome Tax, Appeal, ADDL/JCIT (A)-4, Bengaluru ("CITA") is passed without rejecting the documentary evidence / submissions made and by merely relying on the decision of Apex Court is bad in law and is against the principal of natural justice and is liable to be quashed. 2. CITA has erred in dismissing the appeal of Your Appellant and confirming the reopening of the assessment u/s. 147 of the Act which was without following the due process of the law. 3. CITA has erred in dismissing the appeal of Your Appellant by confirming the reopening of the assessment even though Learned AO has not provided copy of the report based on which reopening was made u/s. 148 of the Act. 4. CITA has erred in confirming the disallowance o....
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....dered to be a penny stock involved in providing bogus accommodation entries of long-term capital gain/short-term capital loss/business loss. The Investigation Wing observed that the value of the shares of the said penny stock was negligible and beneficiaries had been provided accommodation entries after introduction of cash by the broker as per the advice of the entry operator. Accordingly, the assessment was reopened u/s 147 by issuing notice after recording reasons for escapement of income vide notice dated 31/03/2018. In response to the notice, the representative of the Assessee appeared before the Ld. AO and filed objections to the reopening of the assessment. The Ld. AO disposed of the objections raised by the Assessee vide letter date....
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....n the form of sale price of shares to the beneficiaries of the accommodation entry. The value of sale consideration claimed is Rs. 6,15,496/- whereas the cost of purchase shown by the assessee is Rs. 77,486/- which is given by cheque to show the purchases as genuine purchases. The sale price received as accommodation entry is nothing but the return of amount in lieu of cash that the assessee would have paid to hawala operators over and above Rs. 77,486/- paid by the assessee by cheque at the time of purchase of penny stock in F.Y.2007-08. Therefore the entire sale consideration of Rs. 6,15,496/- shown to have been received by the assessee would represent the value of cash which has been laundered in the form of bogus profit on sale of share....
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....ferred an appeal before the Ld.CIT(A). 3. Before the Ld.CIT(A), the assessee submitted that all details regarding the purchase and sale of shares were filed during the assessment proceedings. It was submitted that the said shares were purchased through the market and that contract notes, depository receipts, bank statements and broker confirmations were available with the Ld. AO. It was further submitted that the assessee had sold the shares after a period of more than three years and had nothing to do with the scrip being considered a penny stock, as the assessee was a genuine investor. The assessee submitted that during the assessment proceedings, the Ld. AO did not rely on any evidence which could lead to the conclusion that either th....
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.... presence of supporting documents alone could not prove genuineness when the surrounding circumstances clearly suggested otherwise, it is held that the transactions were not genuine investment activity but part of a pre-arranged scheme to convert unaccounted money into exempt LTCG. In view of the facts mentioned above, the addition made by the AO is hereby sustained. Hence, the appeal on Grounds 1 to 6 is dismissed. Aggrieved by the order of the Ld.CIT(A), the Assessee is in appeal before the Tribunal." 4. The Ld. AR submitted that, Assessee had purchased the shares of SVC Resources Limited through the market and had sold the shares after paying the necessary STT through banking channels. It was submitted that merely because the scrip wa....
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....stock companies for converting unaccounted cash. However, the Ld. AO failed to record any specific finding incriminating the Assessee so as to establish involvement in rigging the prices of the shares. On the contrary, the Assessee established, by way of documentary evidence, the genuineness of the transactions, which has not been controverted by the authorities below. It is further noted that no specific defect or deficiency has been pointed out by the Ld. AO in respect of the evidence furnished by the Assessee. 5.1. It is a settled position of law that suspicion, however strong, cannot take the place of proof. Mere inclusion of a scrip in an investigation report as a penny stock, in the absence of any material demonstrating the Assesse....