S. 69 : Unexplained investments-Long term capital gains-Penny stock-Denial of exemption is not valid. [S. 10(38), 45, 131, 133A]
The AO assessed the consideration received on sale of shares as penny stock and denied the exemption on the basis of information received from the Investigation wing pertaining to survey action conducted in the case of company i.e. First Financial Services Ltd in whose shares the asseee had transacted, statements recorded of other beneficiaries, finding of the Securities Exchange Board of India ( SEBI) vide interim orders in case of First Financial Services Ltd., statement of assessee recorded pursuant summons issued u/s. 131 of the Act, came to the conclusion that the proce received by the assessee as accommodation entry, which has been laundered in the form of bogus profit on sale of shares. Accordingly the consideration received was assessed as unexplained investments. The disallowance was affirmed by the CIT(A). On appeal the Tribunal held that the interim order of the SEBI was revoked and shares of First Financial Services Ltd. was not treated as penny stock. Accordingly the addition was deleted. (ITA No. 143/M/2022 dt. 13-10-2022) (AY. 2013-14)
Sunita Chaudhry (Smt.) v. ITO (Mum.)(Trib.) www.itatonline.org
[Coram : Hon’ble Shri Prashant Maharishi, AM and Hon’ble Shri Sandeep Singh Karhail, J.M.]