TaxTMI 
TaxTMI 
2026 (7) TMI 1716
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....eal Centre (NFAC), Delhi dated 22.9.2025 in Appeal No. NFAC/2012-13/10258626 for Assessment Year 2013-14. Since the appeal filed by the revenue and cross objection filed by the assessee are inter-connected, thus we have heard the same together and disposed of by this common order for the sake of convenience, by dealing firstly with Revenue's appeal. 2. The Revenue has raised the following grounds of appeal:- 1. Whether on the facts of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 81,72,410/- made by the AO u/s. 68 of the Act on account of non-genuine transactions in trading in scrip of JRI Industries & Infrastructure Ltd. and PMC Fincorp Ltd. carried out by the assessee during FY 2012-13 relevant ....
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....y to the facts and circumstances of the case. 4. The brief facts of the case are that the assessee company had not filed its return of income for the AY 2013-14. The AO received information from the insight portal that the assessee company has traded penny scrip of M/s JRI Industries & Infrastructure Ltd. and M/s PMC Fincorp Limited and claimed loss. These two companies do not have business and the market price of shares also not supported by financial fundamentals of the company. The assessee, is one of the beneficiaries, has claimed fictitious and nongenuine loss by trading in those two penny scrips. Based on the above information, notice u/s 148 of the Act was issued on 28.07.2022. Accordingly, the AO had issued various statutory noti....
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....e transactions in trading in scrip of JRI Industries & Infrastructure Ltd. and PMC Fincorp Ltd. carried out by the assessee during FY 2012-13 relevant to AY 2013-14 and also failed to establish the genuineness of its transactions in trading in scrip of JRI Industries and PMC Fincorp. It was further submitted that these two companies do not have financial fundamentals to justify the sharp rise in market price of shares and also ignored the fact that the exit providers do not have creditworthiness. 7. We have heard the rival contentions and perused the records. We find that Ld. CIT(A) has given an elaborate finding on the issue in dispute by observing as under:- "7.2 The appellant, is a company, had not filed its return of income ....
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....ate proceedings, the appellant has filed the written submission along with judicial decisions and the same is perused by the undersigned. The appellant has claimed that the AO has not established the loss claimed is the bogus loss. The AO has held that trading loss on those two penny scrips as the bogus loss and the same is assessed as income of the appellant u/s 68 of the Act. During the course of appellate proceedings, to establish the genuineness of loss claimed by the appellant, the appellant has submitted details of share investment, trading in shares by the appellant on recognized stock exchange, STT paid during the year under consideration, contract notes of purchase of shares of those two penny scrips, bank statement of the appellan....
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.... any of scrupulous activities or directly linked to one of the persons who has involved in manipulation/rigging share prices, entry operator or exit operator. There is no material with the AO to substantiate his findings that the impugned losses are not genuine. In view of the above-mentioned facts and discussions, in the absence of material evidence to disprove the claim of the loss as bogus loss, therefore, the addition made by the AO u/s 68 of the Act is deleted. The appellant has raised the objection on the addition of Rs. 81,72,410/- through ground nos. 5 & 6, therefore, ground nos. 5 & 6 are decided in favour of the appellant." 8. After perusing the aforesaid findings of the Ld. CIT(A), we note that it was the claim of the assessee....
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....ion or reference to the involvement of the assessee company on the issue of rigging the stock prices. Further, no transaction in the name of the assessee has been declared as invalid by any of the statutory authority including SEBI and there is no mention or reference of the involvement of the appellant company. Further, the assessee has established the identity, creditworthiness and genuineness of the transactions to meet all the requirements of ingredients as mentioned in section 68 of the Act. In this case, the AO has made assumption and applied human probabilities and held those two scrips to be a penny scrip without bringing on records how the assessee is involved in any of scrupulous activities or directly linked to one of the persons....