Suresh Kantilal Thakkar. v. PCIT (2024) 208 ITD 395/232 TTJ 659 (Ahd) (Trib.)

S. 263 : Commissioner-Revision of orders prejudicial to revenue-Capital gains-Penny stock-Failure to make enquires-Revision is held to be valid.[S. 45, 147, 148]

The assessment was  reopened under Section 147 and assessment was finalized, by accepting returned income.  PCIT held  that assessee undertook transaction of trading in shares of ECL, a penny stock and modus operandi of whole business was to facilitate introduction of unaccounted income in form of exempt capital gain or short term capital loss, over years. PCIT held  that Assessing Officer failed to analyze documents to verify genuineness of transaction and set-aside assessment order as being erroneous and prejudicial to interest of Revenue. Tribunal held  that   since assessee had dealt in shares relating to penny stock companies and it had neither declared Long Term Capital Losses on sale of shares of ECL nor declared LTCG on sale of shares of Saya assessee had not filed it’s return of income correctly. Since Assessing Officer failed to enquire into these important aspects which were both not reflecting in return of income, assessment order passed by Assessing Officer is  erroneous in so far as prejudicial to interest of Revenue. (AY. 2016-17)

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