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2018 (5) TMI 580 - AT - Income TaxGenuineness of transactions for sale and purchase of shares on which exemption u/s. 54F claimed - Held that:- It is evident from the records that the assessee has failed to furnish any documentary evidence in support of sale and purchase of shares of FTE. The assessee has merely given the name of broker M/s. Vijay Bhagwandas & Co. in support his contentions. During the course of inquiry by Assessing Officer from aforesaid broker it transpired that none of the bills as mentioned by the assessee for purchase and sale of shares of FTE were issued by the broker in favour of the assessee. The assessee has miserably failed to substantiate genuineness of transactions for sale and purchase of shares on which exemption u/s. 54F of the Act has been claimed. The assessee has also failed to justify phenomenal increase in the value of share from ₹ 1.16 per share to ₹ 70.18 per share within a short span of one year. Addition on account of alleged commission paid to broker - Held that:- Since, the assessee has failed to substantiate the transaction of sale and purchase of shares, there is no question of payment of commission and hence, the said claim of assessee has been rightly rejected by authorities below. Levy of penalty u/s. 271(1)(c) - non specification of charge - Held that:- The charge for levy of penalty u/s. 271(1)(c) has to be specifically conveyed to the assessee at the time of recording satisfaction, otherwise, the principles of natural justice are offended. The assessee should know the charge which he has to meet while defending levy of penalty. Thus, in view of the defect in recording satisfaction for levy of penalty, the impugned order is set aside and penalty in both the assessment years 2005-06 and 2006-07 is deleted.
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