The Assessing Officer disallowed the assessee’s short-term capital loss on the ground that the shares formed part of penny stock scrips allegedly manipulated by entry operators. The Tribunal held that the assessee had produced contract notes, demat statements, bank records and other documentary evidence, which the Assessing Officer neither disproved nor investigated independently. As no incriminating material linked the assessee with the alleged manipulation and the addition was based solely on Investigation Wing reports and statements of third parties, the disallowance of the loss was deleted. (AY. 2013-14).