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2020 (8) TMI 153 - HC - Income TaxBogus accommodation entry - burden of proof was on the revenue to sustain the addition by leading cogent evidence - Addition by the AO holding the same as part of accommodation entry business of providing bogus long-term/short-term capital loss - Penny Stocks - HELD THAT:- AO asked the assessee to justify the rationale behind investment in these penny stock companies not having financial worth, however, the assessee failed to justify the same. AO provided as why the investment in the shares transacted by the assessee was not justified in view of the comparison of the other shares available. AO also pointed out the price fluctuation in the shares of the companies over a period, dividend history and other financial parameters to substantiate that there was no financial logic for investment in the company except for claim of bogus short-term capital loss against receipt of cash money. AO accordingly concluded that the addition was made on the basis of the material available on record, the surrounding circumstances, the human conduct and preponderance of probabilities. We find that in instant case addition in dispute is not solely on the basis of the statement of the persons and the Assessing Officer has relied on other materials. The statements of the persons who controlled the business of providing accommodation entry have been corroborated with the material, surround circumstances and preponderance of probability. We accordingly uphold the finding of the CIT(A) on that issue in dispute. The relevant grounds of the appeal of the assessee are accordingly rejected.
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