INCOME TAX OFFICER-24(3)(1), MUMBAI, PIRAMAL CHAMBER, MUMBAI vs. NILESH MALSHI SAVLA HUF, ANDHERI, EAST MUMBAI

In the instant case, on the basis of investigation carried out by DDIT, Mumbai with regard to the penny stock scrips including M/s. VAS Infrastructure Ltd. and M/s. VMS Industries Ltd. the case of the Assessee was reopened and ultimately vide assessment order dated 24.12.2019 u/s 143(3) r.w.s. 147 of the Act, an addition of Rs.2,86,751/- was made as unexplained cash credit u/s 68 of the Act by rejecting the trade value of Rs.1,46,401/- & Rs.1,40,350/- respectively traded in penny stock scrip of M/s. VAS Infrastructure Ltd. and M/s. VMS Industries Ltd. 2.1 The Assessee, being aggrieved, challenged the aforesaid additions before the Ld. Commissioner who by considering the peculiar facts and circumstances of the case to the effect that the Assessee had stated that he had no idea of shares he had transacted, were penny stocks. Further, he had transacted through BSE only and had no intention of claiming any bogus Long Term Capital Gains (LTCG) rather in all scrips (penny stock as per the AO) the Assessee had not earned even a single penny but suffered minor losses of Rs.90 and Rs.22.40 from such shares.

We have given thoughtful considerations to the peculiar facts and circumstances of the case and are in the concurrence with the findings of the Ld. Commissioner as the Assessee has not claimed any alleged bogus LTCG from trading of penny stock but in fact incurred losses and therefore the addition made by the AO is not correct. We even otherwise do not find any reason and/or material to contradict the findings of the Ld. Commissioner, hence the order under challenge does not require any interference, being not suffered from any perversity, impropriety and/or illegality.

In the result, the appeal filed by the Revenue Department stands dismissed.