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2024 (4) TMI 1070 - ITAT MUMBAIAddition u/s 68 r.w.s. 115BBE - Bogus LTCG - sale of equity shares alleged to be penny stocks - assessee during the impugned assessment year had declared these scrips and transactions in the return of income and generated loss - HELD THAT:- The assessee had made the transactions and generated loss through the transaction of scripts ACI and Tilak. The assessee’s holding was more than 2 years. There is no such direct communication reflected in the order of the Ld.AO that the entire transaction was made a sham transaction. In the observation of recorded reasons, the Ld. AO mentioned that the transactions are undisclosed whereas during the assessment and appellate stages before the authorities were unable to substantiate that the entire transaction was not disclosed in the return. In recorded reason the ld. AO specifically mentioned that the transacted amount is not reflected in capital gain column of return filed U/s 139 of the Act. Whereas, the assessee declared the transaction as business transaction in return, not as capital gain. Respectfully, we rely on the order of Arvind Sahdeo Gupta [2023 (8) TMI 522 - BOMBAY HIGH COURT] for quashing of assessment order for wrong observation of the ld. AO. The Hon’ble Bombay High Court in the case of PCIT vs. Ziauddin A Siddique [2022 (3) TMI 1437 - BOMBAY HIGH COURT] held that where (a) the transaction of purchase and sale of shares which is alleged to be a penny stock is done through Stock Exchange or through registered broker, the payments have been made through banking channel, STT is paid and the ld. Assessing officers has not criticised the documents and (b) assessee is not involved in price rigging, the transaction is genuine. - CIT(A) had made the enhancement u/s 68 - AR only challenged the addition of CIT(A). Though the addition of the Ld.AO is duly quashed, so the enhancement by the CIT(A) has no leg to stand, so the amount is duly deleted. DR was not able to produce any contrary orders against the submission of the AR. So, the appeal order is duly set aside. The addition made by the AO and enhancement by the CIT(A) are deleted. Decided in favour of assessee.
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