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TMI Blog2022 (11) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... not controverted any of the facts which the assessee has demonstrated before the AO in support of its claim of genuineness of the transactions. In fact, he does not even point out what exact information was there with the AO which he should have used against the assessee. He merely makes general reference to the investigation report of the Department stating to have contained information regarding these shares. With the assessee having sufficiently demonstrated genuineness of the transaction of trading in shares of VIL and also that it was not a mere penny stock traded in, and the ld.Pr.CIT having not pointed out insufficiency in the explanation and the evidence filed by the assessee, and also not specificying what information was there with the AO against the assessee, there could be no finding of error at all in the order of the AO accepting the assessee s claim of the transactions being genuine. The order passed by the Pr.CIT therefore, we hold, is without any basis and is therefore set aside. The grounds of appeal of the assessee are allowed. - ITA No. 147/Ahd/2021 - - - Dated:- 11-11-2022 - SMT. ANNAPURNA GUPTA , ACCOUNTANT MEMBER AND T. R. SENTHIL KUMAR , JUDICIAL MEM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eous causing prejudice to the Revenue on account that the AO had not made proper inquiry and investigation regarding alleged penny stock scrip traded by the assessee during the year despite the AO being in possession of information regarding the same. 4. In the impugned case, reassessment proceedings had been initiated on the assessee on the basis of information that the assessee had traded in scrips of penny stock company viz. M/s. Vas Infrastructure Ltd. ( VIL for short) amounting to Rs.41,78,568/-. Thereafter case of the assessee was reopened and during the assessment proceedings, the assessee filed revised return declaring capital gain on sale of 69,191 shares of VIL which was accepted by the AO. 5. As per the ld.Pr.CIT this act of acceptance of short term capital gain returned by the assessee on shares traded of VIL without making any inquiries and considering the information in the possession of the AO, from the Investigation wing of the department ,that these scrips traded were mere penny stock, tantamounted to the assessment order being erroneous. As per the ld.Pr.CIT the entire amount received on the trading of this scrip of VIL i.e. Rs.71,81,699/- should have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chase:- a) Whether Vas Infrastructure was listed on BSE/NSE on the date of purchase? b) Whether payment of purchase was made by cheque/DD ? If, No. Give reason c) Whether purchase was made through Recognized Stock Exchange ? If No, Give reason (B) In the case of sale:- a) Whether Vas Infrastructure Ltd. was listed on BSE/NSE on the date of sale? b) Whether sale consideration was received by cheque/DD ? If, No. Give reason c) Whether sale was made through Recognized Stock Exchange ? If No, Give reason. (C) Other details: a) Reason for sale of VAS Infrastructure Ltd. share/securities. b) Details of dividend received from VAS Infrastructure Ltd. . c) Respective financial year wise ledger ales, of VAS Infrastructure Ltd. from of purchase to date of sale. You are requested to please furnish the above details along with documentary evidences so as to reach this office on or before 26/09/2018 at 11.00 A.M.to this office. VINODCHANDRA GANESHBHAI SOLANKI WARD 3(2)(8), AHMEDABAD 7. He thereafter drew our attention to the reply filed before the AO in response to the notice under section 142(1) date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed out that subsequently in the month of November, the assessee had purchased shares of VIL at rates of Rs.135.35 and 136.91 per share. He therefore stated before us that it had been adequately demonstrated to the AO that trading in VIL shares was not one off transactions of the assessee in the nature of accommodation entry, since it had been continuously trading in these shares and even holding on to these shares at a very high rate at the end of the year. He therefore contended that the AO was sufficiently convinced that the assessee did not indulge in any accommodation entry vide any alleged penny stocks traded and accordingly allowed claim of the assessee. 9. The ld.DR on the other hand supported the order of the ld.Pr.CIT stating that despite being in know that these shares were penny stocks, on the basis of information received from the Investigation Wing, the AO did not care to make adequate inquiry. In this regard he drew our attention to para 8 to 13 of the order. 10. We have heard contentions of both the parties. We find that the allegations of ld.Pr.CIT is that the AO was in possession of the information that the shares of VIL traded in by the assessee during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the last sale of VIL shares at very high rate of Rs.125/- per share is demonstrated to be genuine by the fact that the assessee subsequently purchased these shares at this very high rate and held on to them. If the assessee was indulging in taking accommodation entry, he would not have subsequently purchased these shares at a very high rate, because, that would have defeated the purpose of introducing his own unaccounted money into his own books of accounts. 11. Based on the evidence that were furnished before the AO, we find that the AO had taken a plausible view that the impugned transaction was not a penny stock trading, but in fact was a genuine trading transactions of VIL shares and accordingly allowed the claim of short term capital gain returned by the assessee. 12. The ld.Pr.CIT has not controverted any of the facts which the assessee has demonstrated before the AO in support of its claim of genuineness of the transactions. In fact, he does not even point out what exact information was there with the AO which he should have used against the assessee. He merely makes general reference to the investigation report of the Department stating to have contained informatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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