Sec.68 and penny stock

Assessee is individual and regularly doing investment in share. He has invested share of few co. He has purchase the shares of two co through authorised stock broker and paid the amount by account payee cheques .  After 4 years of holding the said shares He sold the shares again through authorise stock brokers and received money as per settlement of stock exchange. During the course of assessment proceedings , AO has given show cause as to why sale proceeds of shares should not be added U/Sec. 68 on the ground that the shares of these co are penny stock…

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