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2019 (6) TMI 1385 - AT - Income TaxDisallowance of short term capital loss - assessment order u/s 144 - HELD THAT:- The report of the investigation wing of the Income tax Department can be a starting point for investigation into the affairs of the assessee but cannot be the whole and sole basis on which an addition can be made. Copy of the report is neither furnished to the assessee nor is placed before us for my consideration. When a copy of the report is not brought on record, the question of relying on the same to make an addition to the income, does not arise. The assessee has purchased and sold shares through brokers. Copies of Contract notes, copies of payment through banks and other evidences were filed in support of the genuineness of the transactions. The Assessing Officer relies on the statement of the brokers and that of the entry operators but, none of these statements have been brought on record. The contents of the so called statements are not known. SIT report relied upon by the Assessing Officer does not help the case of the revenue as it is a general report. None of the above referred reports can be the basis of additions. A statement has been made that SEBI has suspended the transactions in the scrip but contrary evidence has been brought on record by the assessee to demonstrate that the scrip is being traded even today. Thus, the basis on which the Assessing Officer has made the disallowance, cannot be upheld. Disallowance of Interest deduction u/s 57(iii) - The claim of he assessee is upheld for the simple reason that the ld. CIT(A) agreed with the contentions of the assessee and the only ground on which he upheld the disallowance was that the loss claimed as short term capital loss was suspicious and bogus. As we have held that the assessee’s claim on the short term capital loss has to be allowed, this objection of the ld. CIT(A) cannot be sustained. Hence we allow this ground of the assessee.
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