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2019 (7) TMI 180 - AT - Income TaxRevision u/s 263 - 'Penny Stock' addition - as per CIT AO did not enquire into the claim of short term capital loss or that the assessment order suffered from ‘lack of enquiry’ - non consideration of CBDT Instruction No.287/30/2014-IT(Inv II)Vol. III - HELD THAT:- On perusal of the above Instruction, it is noted that the CBDT had only informed the field officers that a button 'Penny Stock' has been added on their Individual Transaction Screen to display information related to penny stock, including the investigation report of the Kolkata Investigation Directorate. Upon being enquired as to whether the CBDT has laid down any specific guidelines for the field officers, pursuant to the above Instruction for investigation into the suspicious transactions in shares, the Ld. CIT, DR was unable to bring to our notice the so-called specific line of enquiry which the CBDT had mandated the AOs to abide by. We therefore find that very premise viz., violation of the directions contained in CBDT Instruction No.287/30/2014-IT(Inv II)Vol. III, based on which the Pr.CIT initiated the proceedings u/s 263 for alleged lack of enquiry by the AO into the appellant’s claim of short term capital loss, is found to be factually untenable. On examination of the material placed before him by the appellant, the AO was satisfied that the short term capital loss was incurred by the appellant on sale of shares listed on the Bombay Stock Exchange. The appellant had filed before the AO the relevant details and also produced the time stamped contract notes issued by its broker. All the transactions were made through registered share broker at rates prevailing on the stock exchange on the relevant dates. The payment for acquisition of shares and the subsequent sale proceeds were also transacted through the appellant’s regular bank account. It is noted that the listed shares were sold within a period of one year from the date of acquisition and therefore the gain/loss was short term in nature. We find that the AO had discharged his duties as an investigator as well as that of an adjudicator and applied his mind on the issue before him and taking into consideration the explanation rendered by the appellant, had taken a reasonable and plausible decision to allow the claim of short term capital loss as made by the appellant in the return of income. While passing the assessment order the AO did not follow a view which can be said to be ‘unsustainable in law’. In the circumstances therefore, the jurisdictional facts for usurping the jurisdiction, being absent, we hold that the action of Ld. Pr. CIT was without jurisdiction and all subsequent actions are 'null' in the eyes of law. We therefore quash the order impugned before us. - Decided in favour of assessee.
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