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2022 (11) TMI 311 - AT - Income TaxAddition u/s 68 - penny stock purchases - Bogus LTCG - Conversion of unaccounted income into genuine long term capital gains - HELD THAT:- Except stating that the assessee is one of the beneficiary of alleged bogus long term capital gains transaction of these two companies, but nothing was brought on record to link the transaction of the assessee with investigation report as well as any other evidences which suggest that the assessee is also part of that group of people who were involved in alleged scam. At the same time, although, the assessee claims to have purchased and sold shares of two companies through recognized stock exchange, but that itself is not a ground to accept arguments of the assessee when other evidences clearly prove that these shares were used to provide accommodation entries to various beneficiaries. Therefore, we are of the considered view that neither assessee nor the AO has conclusively proved their case with necessary evidences. Hence, we deem it appropriate to set aside the issue to the file of the AO and direct the AO to provide necessary information used against assessee to take an adverse view on capital gain derived from sale of shares of two companies and further provide an opportunity of hearing to the assessee to refute allegations made by the Department and also if necessary to cross-examine the persons who gave statement on the issue. AO is directed to follow the principles of natural justice while dealing with the issue and also decide the issue in accordance with law. Appeal filed by the assessee is allowed for statistical purposes.
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