2023 (3) TMI 360 - AT - Income Tax

Unexplained credit - Penny stock purchases - report of Dy. Director (Inv.), Kolkata, observed that M/s. S.S. Securities is carrying out huge bank transactions vide RTGS and high value cheques and based on the pattern of the transactions, location of business, source of funds and further utilization of funds by these group of entities including M/s. S.S. Securities - HELD THAT:- When the enquiry was conducted by ld. AO during FY 2017-18, M/s. S.S. Securities had already surrendered the registration and not carrying out business activity. It is also not the case of the Revenue that the purchases of the assessee are bogus or non-genuine.

Assessee made legitimate purchases in the preceding year and the said purchases were held as investments and their genuineness is not doubted by the Revenue authorities and during the year under consideration some of the investments have been sold through a broker registered with the Guwahati Stock Exchange Ltd. and the said transaction has been carried out through stock exchange and sale consideration has been received through banking channel via registered broker and, therefore, we do not find any reason to dispute the genuineness, identity and creditworthiness of the share broker at the point of time when transaction was carried out. Thus, no infirmity is called for in the finding of ld. CIT(A) deleting the alleged addition made u/s 68 of the Act. Therefore, all the grounds raised by the Revenue are dismissed.