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2023 (4) TMI 359 - ITAT PUNERevision u/s 263 - assessment order erroneous and prejudicial to the interests of the Revenue - Peney stoch transactions - As per CIT there was no query from the AO as to the genuineness of the claim for exemption u/s 10(38) under the head “long term capital gains” - As argued by assessee case was selected for limited scrutiny, therefore, the question of examination of issue of genuineness of claim for exemption u/s 10(38) does not arise - HELD THAT:- On mere perusal of the said notice, it would be clear that there was no query from the Assessing Officer as to the genuineness of the claim for exemption u/s 10(38) under the head “long term capital gains”. The appellant cannot be blow hot and cold one hand say that the case was selected for limited scrutiny and on the other hand the issue was examined by the Ao. Thus, the contentions made in this behalf by the appellant are devoid of any merit. It can be safely concluded that the AO had failed to examine the genuineness of claim for exemption u/s 10(38) of the Act. As no reasonable opportunity was given by the ld. PCIT during the course of proceedings before him - As the appellant could not demonstrate before us that the notice was received after expiry of the date of hearing of the proceedings u/s 263 - As established the fact that the shares of M/s. NCL Research & Financial Services Ltd. were reported as penny stock by the Investigation Wing of the Income Tax Department, Kolkata, the transactions of purchase and sale of shares in M/s. NCL Research & Financial Services Ltd. are part of the fraud played by the operators involved in the penny stock. PCIT was not clear in his finding, therefore, the order should be declared null and void - It cannot be accepted for the reason that the ld. PCIT has only set-aside the assessment to re-do the assessment after giving an opportunity of hearing to the appellant, since this issue was not examined by the AO during the course of assessment proceedings. We also make it clear that even the information received after the completion of assessment constitutes a part of the record for initiation of proceedings u/s 263 of the Act In the case of PCIT vs. Swati Bajaj [2022 (6) TMI 670 - CALCUTTA HIGH COURT] is squarely applicable, wherein, it has held that failure of the AO taking into the report of the Investigation Wing of the Income Tax Department and accepted the claim for exemptions on account of long term capital gains and the exemption arisen from transaction with penny stock, renders the assessment erroneous and prejudicial to the interests of the Revenue - Appeal filed by the assessee stands dismissed.
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