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2023 (1) TMI 855 - ITAT DELHIReopening of assessment u/s 147 - Additions u/s 68 - penny stocks - information which was received from the Investigation Wing and refers to the 10 penny stocks, and from which in one Konarak Commerce Industries Limited, assessee has invested and claimed LTCG - HELD THAT:- In the reasons there is not iota of words of assessee having transactions with Kayan brothers. There is no discussion as to how the investment of assessee in the scrip has resulted into escaping income. Apparently the Ld. AO has merely expressed reason to suspect and not cited reason to believe that income chargeable to tax has escaped assessment. AO has no power to review; he has the power to re-assess. The part of reasons reproduced above show that there was merely an attempt to review on basis of view that ‘financial position of assessee is not very sound’. This, however, was not a valid ground for invoking the provisions of section 147. Information received from the investigation wing as reproduced in the reasons had no substance qua the assessee and there was non application of mind by Ld. AO, away and apart from the information. The bench is of considered view that tax authorities below have fallen in error as Ld. AO recorded reasons without applying mind independently but based on surmises and conjectures out of financial status of the assessee. While Ld. CIT(A) and Ld. AO have both ignored the factual aspects of purchase of shares five years prior to the sale for substantial amount and have tried to paint its findings based on modus operandi of tainted Kayan brothers, with whom actually there was no dealing by the assessee. Assessee appeal allowed.
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