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2022 (11) TMI 1114 - ITAT MUMBAIReopening of assessment u/s 147 - penny stock Purchases - assessee has taken accommodation entry of LTCG by selling shares of “Naresh Manakchand Jain” at the Stock Exchange and proceeds from sale of such shares was booked as long term capital gain - HELD THAT:- First of all, the Assessee has not undertaken any transaction of purchase sale and shares of Naresh Manakchand Jain nor has declared any long term capital gain. The Assessee had undertaken transaction in the script of Nyssa Corporation Ltd. in which it has incurred loss of Rs.7,36,47,328/- and has shown sale of Rs. 1,19,60,611/- as against the purchase value of Rs. 8,55,63939/-. As stated above, the Assessee has neither set-off this net long term capital loss against any income during the year nor has adjusted this loss to be carry forwarded to subsequent years. There was no tax benefit as such to the Assessee from this transaction as has been falsely tried to be implicated by the AO. Thus, there is no co-relation between the material discussed in the reasons recorded and the material on record as well as the addition made in the assessment order. If the Assessment has been completed u/s 143(3) after detail scrutiny and enquiry on a particular issue, then re-opening u/s 147 on same very issue cannot be made without any tangible material coming on record having live link nexus with the income escaping assessment. The entire substratum and premise of the AO was wrong and the material and information as discussed in the reasons recorded have no link with assessee and has nothing to do with the any transaction undertaken by the Assessee. This shows complete lack of application of mind by the AO. There is not even whisper in the reasons recorded about dealing in shares of Nyssa Corporation Ltd. or the Assessee had taken any accommodation entry on this script. AO is referring to altogether different script which has not been under taken by the Assessee at all. Now, with the clarification by the DR from the records, it is seen that there are no other reasons recorded and AO has wrongly assumed Jurisdiction on a wrong assumption of facts. Accordingly, the aforesaid observation and finding of the CIT (A) is correct and the same is affirmed and we hold that the reasons recorded by the AO are not in accordance with the law and therefore the entire proceedings u/s has rightly been quashed by the Ld. CIT (A). - Revenue Appeal is dismissed.
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