TMI Blog2022 (11) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration rather received the gain of Rs.1,655/- which cannot be considered as accommodation entry of gain of penny stock transaction. Therefore, direct the Assessing Officer to delete the entire addition. So far as objection raised by Ld. Sr-DR for the Revenue that assessee has made cash deposit in his bank account, find that assessee has shown such deposit as income from other sources . Therefore, the submission raised by Ld. Sr-DR for the Revenue is mis-placed. Assessee s appeal is allowed. - ITA Nos.22/SRT/2022 - - - Dated:- 18-10-2022 - Shri Pawan Singh, Judicial Member For the Assessee : Shri Rushin Patel, AR For the Revenue : Shri J.K.Chandnani, Sr-DR ORDER UNDER SECTION 254(1) OF INCOME TAX ACT 1. This appeal by assessee is directed against the order of National Faceless Appeal Centre [for short to as NFAC ]/Ld. CIT(A) dated 24.11.2021 for the assessment year 2012-13, which in turn arises out of assessment order passed under section 143(3) r.w.s. 147 of Income-Tax Act,1961 (hereinafter referred to as the Act ) dated 20.11.2019. The assessee has raised the following grounds of appeal: 1. The Learned CIT(A) has erred in law and on facts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly on such transaction. The assessee furnished bifurcation of share, cost of acquisition and date of sale in the following manner: Jainam Page No. Date of purchase Share Cost of acquisition Date of sale Share Copy of sale Gain orloss 4 12.7.2011 40 78982 12.7.2011 400 82648 3666 5 13.7.2011 450 85444 13.7.2011 450 85914 470 6 19.7.2011 100 18604 19.7.2011 100 19090 486 6 21.7.2011 400 72338 21.7.2011 200 38960 2791 7 22.7.2011 200 29517 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer reopened case on borrowed satisfaction. He has not made any independent investigation before recording reasons. The reopening on borrowed satisfaction is not valid. 6. The NFAC/CIT(A) after considering the submissions of the assessee held that investigation was conducted by Department of Mumbai, wherein the department reveals that trading in the said penny stock was a manipulated affair to generate bogus long term entities facilitating tax evasion. The assessee was one of beneficiary who has taken accommodation entry of long term gain through trading in penny stock company. In this case, the assessee claimed to have made a deal was identified as penny share by the Investigation Wing. The rate of shares was not based on business results but was fluctuated from insider s trading from negligible value to very high price and vice versa without any reason or basis solely to accommodate or generate bogus capital gain or loss and upheld the addition made by the Assessing Officer. 7. Further aggrieved the assessee has filed present appeal before the Tribunal. 8. On perusal of record, it shows that present appeal is barred by eight days of the prescribed period of limitation f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee furnished his bank account and current account of The Surat Peoples Co-Op. Bank Ltd. and submitted that he had purchased 1350 share of Scan Steel Ltd. and sold on the same days without accepting the delivery and earned profit of Rs.1,655/-only and such transaction was entered with the BSE. The assessee has clearly stated that he has not made any payment for the purchase of share to his broker or any one else nor received any payment or sale of above shares and received only Rs. 1,655/- as profit. The profit of Rs.1,655/- cannot be treated as bogus entry. The lower authorities have not verified the details in the bank account of assessee and made addition or aggregate of sale amount. In fact, no such amount was received by assessee. The Ld. AR for the assessee submits that assessee has placed on record his ledger account of assessee with his broker Jainam Share Consultants Pvt. Ltd, and the copies of his pass book, wherein only the profit of Rs.1,655/- was recorded in the account of assessee. 12. In alternative and in without prejudice submissions, the Ld. AR for the assessee submits that once the NFAC/CIT(A) accepted the investment, the entire sale consideration cannot be add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levance or parity in facts of this case and upheld the addition made by Assessing Officer without verified the facts. 16. In my view, when the Assessing Officer passed his assessment order for want of reply or evidence and it is the case of assessee that he has furnished complete details regarding such transaction before CIT(A). In my opinion, the NFAC/CIT(A) was duty bound to verify the fact and such evidence, either of his own or by seeking remand report from the assessing officer. On careful analysis of such evidence, I find that the assessee has successfully prove that he has entered into intra-day transaction share of Scan Steel Ltd. The assessee has not paid the purchase cost nor received the entire sale consideration rather received the gain of Rs.1,655/- which cannot be considered as accommodation entry of gain of penny stock transaction. Therefore, I direct the Assessing Officer to delete the entire addition. 17. So far as objection raised by Ld. Sr-DR for the Revenue that assessee has made cash deposit of Rs. 67,500/- in his bank account, I find that assessee has shown such deposit as income from other sources . Therefore, the submission raised by Ld. Sr-DR for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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