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2018 (10) TMI 1396 - AT - Income TaxAssessment framed u/s 147 - penny stock - assessee has made transactions through M/s. AINPL which was not a registered broker - Treatment of Long Term Capital Gains as undisclosed income - Held that:- If the shares were of some fictitious company which was not listed in the Bombay Stock Exchange/National Stock Exchange, the shares could never have been transferred to demat account. Shri Mukesh Choksi may have been providing accommodation entries to various persons but so far as the facts of the case in hand suggest that the transactions were genuine and therefore, no adverse inference should be drawn. Identical facts and circumstances in the case of Shri Pratik Suryakant Shah vs ITO [2017 (2) TMI 463 - ITAT AHMEDABAD] the claim of the assessee cannot be denied on the basis of presumption and surmises in respect of penny stock by disregarding the direct evidences on record relating to the sale/purchase transactions in shares supported by broker’s contract notes, confirmation of receipt of sale proceeds through regular banking channels and the demat account. AO is directed to treat the surplus as Long Term Capital Gains and allow the exemption as claimed by the assessee. The re-assessment proceedings initiated u/s 147 of the Act is not sustainable. Accordingly, we quash the order framed u/s 147 of the Act. Decided in favour of assessee.
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