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2016 (11) TMI 436 - ITAT MUMBAIPenalty levied u/s 271(1)(c) - LTCG on sale of shares - Held that:- AO could not examine the details of purchase transactions as directed by the Tribunal, since the concerned broker did not co-operate. Further, we notice that the AO did not make any attempt to collect details from the return of income filed by M/s G.R Pandya Share broking Ltd. On the contrary, the assessee has furnished confirmation letter and an affidavit in support of the purchase transactions. We have noticed earlier that M/s G.R Pandya Share broking Ltd has denied the transactions out of air, i.e., without bringing any material. The broking firm could not have also brought any material against the assessee, since they have claimed that their records have been destroyed. Under these set of facts, we are of the view that the AO was not justified in taking adverse view in the matter. We have earlier noticed that the assessee has sold the shares through another broker by dematerializing the same. The dematerialization of shares would not happen without physical shares. We have noticed that the Tribunal has already given finding that the genuineness of shares cannot be doubted. The only dispute, in our view, was with regard to the mode and time of purchase of shares and the claim of the assessee in this regard could not be proved by the AO as wrong. Under these set of facts, we are of the view that the Ld CIT(A) was justified in reversing the order passed by the AO and directing the AO to accept the long term capital gain declared by the assessee. Hence the estimated addition made towards expenses was also rightly deleted by Ld CIT(A). Accordingly we uphold the order passed by Ld CIT(A). We have upheld the order passed by Ld CIT(A) in cancelling the additions made by the AO. We notice that the Ld CIT(A) has deleted the penalty on the ground that the additions made by the AO stood deleted. We notice that the Ld CIT(A) has deleted the penalty on correct reasoning and hence order does not call for any interference. - Decided against revenue
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