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Facts
The Revenue challenged the CIT(A)'s decision to delete an addition of Rs. 1,42,200/- for Assessment Year 2012-13, which was made on account of the assessee's alleged investment in penny stock of M/s. VMS Industries Limited. The CIT(A) had deleted this addition, prompting the Revenue's appeal.
Held
The Income Tax Appellate Tribunal upheld the CIT(A)'s decision to delete the addition. The Tribunal ruled that the Revenue failed to produce any evidence demonstrating that the assessee actually purchased, sold, or received any money from the alleged penny stock transactions, hence no addition could be sustained.
Key Issues
Whether the CIT(A) was correct in deleting an addition related to penny stock investment, given the Revenue's failure to provide any evidence to substantiate the transaction.
Sections Cited
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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-Ms SUCHITRA KAMBLE
O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
The captioned appeal has been filed by the Revenue against the order passed by the Ld. Commissioner of Income Tax (Appeals)-10, Mumbai, vide order dated 07.03.2025 relevant to the Assessment Year 2012-13. 2. The Revenue has raised the following grounds of appeal:
(1) The Ld.CIT(A) has erred in law and on facts in deleting the addition of Rs.1,42,200/- considering the investment in Penny Stock namely M/s.VMS Industries Limited. Asst. Year : 2012-13 - 2– (2) The Appellant craves leave to add, later and/or to amend all any the ground before the final hearing of the appeal.
3. The Revenue made an addition of Rs.1,42,200/- on account of the profit and out of Penny Stock. However, the Revenue absolutely failed to bring on record any iota of evidence that the assessee has indeed purchased and sold stock and received monies in his account. In the absence of any cogent evidence to prove that the assessee has received monies or engaged in the sale of stock, no addition can be made in this case.
In the result, the appeal of the Revenue is dismissed.