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2021 (6) TMI 752 - AT - Income TaxRevision u/s 263 - short term capital loss from the scrips claim - HELD THAT:- No exceptional circumstances in respect of the action of AO while enquiring into the issue of short term capital loss were cited by the Ld. PCIT in his impugned order or the Ld. DR. So, we presume the fact that AO was aware of the contents of the circular of CBDT regarding penny stock and thereafter had issued notice u/s. 142(1) - Thus invoking Explanation 2(c) of section 263 of the Act is not correct in the facts and circumstances of the case. PCIT has not bothered to refer to any cogent material on the basis it can be said that these three scrips in question are penny stock. The assumption of Ld. PCIT is based on surmises and conjectures and it is settled principle of law that suspicion howsoever strong cannot take the place of evidence/proof. Considering the enquiry made by AO on the issue, we presume that the AO has performed his task of an investigator on the issue of short term capital loss on the scrips in question after taking note of CBDT circular No. 287/30/2014-IT(inv.II)- Vol-III dated 16.03.2016 on penny stock and thereafter conducted the enquiry. And after perusal of the reply of the assessee to the specific queries and details called for and after perusal of the supporting materials, the AO being satisfied has accepted the claim of assessee in respect of loss on these scrips. Therefore the AO’s action of accepting short term capital loss on the three (3) scrips cannot be termed as a case of no-enquiry on the part of the AO as well as discussed supra the Ld. PCIT’s opinion that Explanation 2(c) u/s. 263 is attracted in this case is incorrect in the light of the facts and circumstances as aforestated - condition precedent to invoke revisional jurisdiction u/s 263 of the Act is absent - Decided in favour of assessee.
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