2022 (7) TMI 1340 - HC - Income Tax

Addition u/s 68 - penny stock purchases - ITAT deleted the addition - HELD THAT - While allowing relief to the assessee, the ld. CIT(A) has specifically held that there is no adverse comment in the forrn of general and specific statement by the Pr. Officer of stock exchange or by the company whose shares were involved in these transactions and he held that Assessing Officer only quoted facts pertaining to various completely unrelated persons whose statement were recorded and on the basis of unfounded presumptions. He further held that the name of the appellants were neither quoted by any of such persons nor any material relating to the assessee was found at any place where investigation was done by the investigation Wing. The ld. CIT(A) relying on various orders of Lucknow Benches and other Benches has allowed relief to the assessee - No substantial question of law is involved in the present appeal. The matter is concluded by findings of fact.

Summary

Issues:
Challenge to order of Income Tax Appellate Tribunal regarding deletion of amount added by Assessing Officer on penny stock allegation.

Analysis:
The appeal before the Allahabad High Court under Section 260 A of the Income Tax Act, 1961 challenged the order of the Income Tax Appellate Tribunal, Lucknow Bench, related to the deletion of an amount added by the Assessing Officer on the basis of penny stock allegation for the assessment year 2014-15. The key issue in this appeal was the deletion of the said amount by the authorities.

The respondent-assessee's appeal was allowed by the Commissioner of Income Tax (Appeal), and subsequently, the Revenue filed an Income Tax Appeal against this decision which was dismissed by the ITAT. The ITAT, after thorough examination, recorded findings of fact that supported the decision of the CIT (A). The ITAT highlighted that the Assessing Officer's additions were based on unfounded presumptions and lacked concrete evidence linking the appellants to the alleged transactions involving penny stocks.

The ITAT emphasized that there were no adverse comments from the stock exchange principal officer or the company whose shares were part of the transactions. Additionally, the ITAT noted that the appellants' names were not mentioned by any individuals involved in the investigation, and no material related to the assessee was found during the investigation. The CIT (A) relied on evidence submitted by the assessee and previous judgments to grant relief, which was consistent with decisions from other benches.

Both the CIT (A) and the ITAT had concurred on the findings of fact, leading to the conclusion that no substantial question of law was involved in the appeal. The High Court, after considering the detailed discussions and findings, found no valid reason to entertain the appeal and subsequently dismissed it. The judgment highlighted the importance of factual findings and the lack of substantial legal issues warranting further consideration in this case.