9911796707
TMI Blog2024 (4) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in holding that disallowance under section 14A of the Act cannot exceed the exempt income earned by the assessees? Disallowance of losses booked in penny stocks - there was a price fluctuation in the stock exchange - whether CIT(A) and the Tribunal have committed an error by setting aside the addition made by the AO as the assessee failed to prove the genuineness of such transaction before the AO? - HELD THAT:- As considered the concurrent findings of fact arrived at by the CIT(A) and Tribunal and are in complete agreement with such findings to the effect that the assesse has proved the genuineness of the transactions and established on online trading platforms that it had no control whatsoever on share prices and thus, incurred losses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned ITAT restricting the disallowance u/s. 14A of the I.T. Act upto the exempt income earned by the assessee during the year under consideration is contrary to the clarificatory amendment by way of Explanation to Section 14A inserted by the Finance Act, 2022? c. Whether Explanation to Section 14A of the I.T. Act inserted by the Finance Act, 2022 being clarificatory in nature has retrospective effect? d. Whether in the facts and circumstances of the case in law, the learned ITAT has erred in deleting the addition of Rs. 73,12,905/- made by the AO on account of disallowance of losses booked in penny stocks namely Kappac Pharma and Alang Industries Gases Ltd ? 3. Learned advocate Mr. Patel for the appellant-Revenue submitted that Questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that during the year under consideration the appellant had dealt in some penny stocks namely share of M/s. Alang Industries Gases Ltd and M/s. Kappac Pharmaceuticals Ltd., that it had purchased these stocks in AY 2014-15 at high manipulated rate and sold them at very low rate to book business losses and to set off the profits earned in commodities transaction on NMCE platforms. The details are as under: Alang Industries Gases Ltd Date QTY Rate Value Date QTY Rate Value 12.04.2013 15,000 110.74 1661150 08.12.2015 20,000 10.25 2,05,000 15.04.2013 5,000 110.86 Total 20,000 2215450 Total 20,000 2,05,000 PROFIT/LOSS Rs. 20,10,450/- KAPPAC PHARMA Date QTY Rate Value Date QTY Rate Value 25.11.2014 37,912 252.71 95,80,824 37,912 112.85 42,78,369 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med in the said penny stocks. 7. Being aggrieved, the Revenue has preferred appeal before the Tribunal and the Tribunal has held as under: 9. The 3rd ground namely losses booked under penny stocks of Rs. 73,12,905/- on sale of Alang Industrial Gases Ltd. Shares. The assessee has proved the genuineness of the transactions beyond doubt by furnishing contract notes, ledger accounts, bank transactions from books of brokers whereas the AO without any material evidence disallowed the losses of in scripts of Alang Industrial Gases ltd. And the valuation of the closing stock in Kappac Pharma just bases on the SEBI general information and Investigation Wing, Kolkatta. The AO made the disallowance without documentary proof whereas the assessee proved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the transactions and established on online trading platforms that it had no control whatsoever on share prices and thus, incurred losses in shares of Alang Industries Gas Ltd. It was also found by both the authorities that the assessee sold only the part of the shares and remaining shares have been held by the assessee in the subsequent assessment year also. With regard to shares of Kappac Pharma Ltd., it was rightly held by the Tribunal that since the market rate was lower, the assessee had incurred business loss though the shares are not sold. 9. In view of the above concurrent findings of fact, no questions of law much less any substantial question of law would arise and accordingly, the appeal, being devoid of any merits, is dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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