TMI Blog2022 (11) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... . Merely on conjecture and surmises, the Assessing Officer cannot made disallowance. In fact, the assessee has not claim the benefit of Section 10(38) in the present assessment year or earlier assessment year or in subsequent assessment years. CIT(A) has totally ignored the evidences such as Audited accounts and Tax Audit report for F.Y. 2011-12, copy of demat statements for F.Y. 2011-12, F O Segment yearly summary sheet, Audited Accounts for F.Y. 2011-12, Statement of Script wise purchase and sales for F.Y. 2011-12, stock summary of M/s VAS Infrastructure Ltd., copy of assessee s ledger in broker s books and copy of broker s ledger in books of assessee for F.Y. 2011-12 along with bank statements and bank book for F.Y. 2011-12 which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re Pvt. Ltd. and total sale value for A.Y. 2011-12 is Rs. 39,08,227/-. The Assessing Officer further observed that M/s. VAS Infrastructure Pvt. Ltd. is penny stock company, which has been used by beneficiaries (sell of share) to launder money in the garb of Long Term Capital Gain (LTCG) while claiming tax exemption under Section 10(38) of the Income Tax Act, 1961. Thus, the Assessing Officer assessed the total income of the assessee at Rs. 2,70,191/- and made disallowance of loss of Rs. 18,57,032/-. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that the assessee company is doing the business of trading in shares and secu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25,15,988) and script wise total shares sale of Rs. 1,30,71,37,518/- (1,30,96,43,951 25,06,434) shown in Audited Accounts after deducting purchase amount of Rs. 25,15,988/- and sale amount of Rs. 25,06,434/- of F O Segment whose yearly summary sheet was also submitted before the Assessing Officer. The assessee also submitted Stock summary of VAS Infrastructure Ltd. which shows sale of shares of Rs. 3,91,88,824/- which almost tallies with sale consideration of Rs. 3,91,53,964/- shown by the Assessing Officer in reason of re-opening of assessment of the company for F.Y. 2011-12. Thus, there is no escapement of any income by the assessee as envisaged by the Assessing Officer while re-opening of the assessment for A.Y. 2012-13 which was alr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se purchase / sales submitted before the Assessing Officer. The Ld. AR further submitted that the trading in such script is hardly 3% of overall turnover of the assessee being purchase of Rs. 378.46 lakhs out of total purchase of Rs. 13065.78 lakhs and sale of Rs. 391.89 lakhs out of total sales of Rs. 13096.44 lakhs as per Audited Accounts. The loss incurred by the assessee in trading of shares of VAS Infrastructure Ltd. is a genuine business loss and not a created / artificial loss and therefore should be allowed as per Profit Loss A/c. The Ld. AR further submitted that it can be seen from audited accounts, the assessee had only business income and that too resulted in loss of Rs. 15,86,963/- which was assessed by ITO, Ward 4(1) for Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. were manipulated to generate bogus gains/loss and the assessee was also one of the beneficiaries in accordance with the report of investigation wing of the department. As regards to Assessment Year 2011-12, the Assessing Officer therein did not point out all the facts leading to non-addition on account of sales/purchase of VASIL shares, thus, the CIT(A) is not bound by the said view. The Ld. DR further submitted that the issue of reopening, the same is not mentioned/set out in the grounds of appeal by the assessee herein. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). 7. Heard both the parties and perused all the relevant material available on record. As regards the reopening issue, the same though argued b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact, the report of investigation wing is much later than the dates of purchase /sale of shares and the order of the SEBI is also much later than the date of transactions and the order of the SEBI nowhere stated that the transaction at earlier dates as void. The Assessing Officer has not given any description as to why the script at particular juncture was at lowest or highest price at the time of trading due to assessee company s interference, when the entire transaction of purchase and sale of the scripts was through National Stock Exchange or Bombay Stock Exchange and that also through the authorised brokers. In fact, the Revenue has also not pointed out as to whether any of the broker during the said period was black listed or prevente ..... X X X X Extracts X X X X X X X X Extracts X X X X
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