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2019 (3) TMI 697 - AT - Income TaxBogus Short Term Capital Loss on sale of shares - Penny Socks - colorable devise to evade tax - HELD THAT:- AO mentions about the role of brokers in allowing entry operators to register their bogus companies as their client and also certain admission made by some brokers about their involvement in so called Jama kharchi companies. In the said para some names of few brokers and Jama Kharchi operators have been mentioned. However, we note that the name of assessee’s broker, M/s. Guiness Securities Ltd., through whom the assessee sold his shares, does not appear at all in that report. We note that M/s Guiness Securities Ltd was not named in the assessment order / D.I. report as a broker who was involved in price rigging of penny stocks. On the other hand, we note that M/s. Guiness Securities Ltd is a SEBI registered stock broking company having registration no. INB 011146033 and also is a member of Bombay Stock Exchange having membership no. 3027; Neither during the time of execution of the contract in FY 2013-14 nor even today, this stock-broking company was suspended by SEBI or BSE on any charge of irregularities like price rigging etc as alleged by the AO. We note that AO failed to bring on record any material to connect the assessee to any of the alleged entry operators/ brokers who are a part of this so called price rigging group or LTCG Generator Group. We note that in an identical/similar case, wherein the AO made addition of the LTCG claim made on sale of M/s. KAFL scrips on similar reasoning based on the SEBI interim report, investigation report of the Wing of the Department and certain statements recorded by the Department in the case of Sanjiv Shroff Vs. ACIT [2019 (1) TMI 213 - ITAT KOLKATA] and and particularly the Hon’ble jurisdictional High Court decision in the case of M/s. Blb Cables And Conductors [2018 (8) TMI 525 - CALCUTTA HIGH COURT] we, therefore, respectfully following the same, allow the claim of loss as claimed by the assessee - Appeal of the assessee is allowed
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