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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
आदेश / O R D E R Per Amarjit Singh (AM): This appeal filed by the revenue is directed against the order passed by the ld. CIT(A)-48, Mumbai dated 25.04.2023 for A.Y. 2011- 12. The revenue has raised the following grounds before us: “Whether on the facts and circumstances of the case and in law, the ld. CIT(A) erred in allowing the appeal of the assessee without going into the merits on additions as it was evident that assessee had taken accommodation entry in the form of penalty stock.”
2. Fact in brief is that assesse filed return of income on 14.7.2011 and declared total income of Rs.880,080/-. Subsequently, the assessing officer received information from the DDIT, Thane, that assessee has P a g e | 2 DCIT, CC-2(1) Vs. Mr. Bhupesh Harishchandra Rathod traded in the penny stock scripts of M/s KCL Infra Project Ltd.(KCLIPL) of RS.568, 331/- to the tune of Rs.255,695/-. On the basis of information the case was reopened u/s 147 of the Act. The assessing office passed order u/s 143(3) r.w.s 147 of the Act on 22.12.2018 by making addition of Rs.184,895/- (comprising total loss of Rs.114,555/- and total profit of Rs.70,340/-) to the total income of the assesse u/s 68 of the Act.
The assesse filed the appeal before the ld. CIT(A). The ld. CIT(A) has partly allowed the appeal of the assesse by directing the assessing officer to verify all the detail in respect of trading in penny stock script traded by the assessee for the financial year 2010-11 and calculate net profit/loss derived by the assesse from the same. The AO was directed to restrict the addition to the extent of net profit/loss derived by the assessee only.
Heard the ld. D.R and perused the material on record. During the course of assessment the assessing officer observed that assessee has booked both loss/profit by trading in penny stock script as under: