The Chandigarh Bench of the Income Tax Appellate Tribunal ( ITAT ) has held that the revisionary order entirely on presumptions, conjectures and surmises is not valid.
The Assessing Officer made an addition of Rs.2,15,847/- to the returned income of Shri Trivikram Singh Toor, the assessee vide order dated 21.11.2017 passed u/s 143(3) r.w. Section 147. The said addition was made by way of disallowing the loss from derivatives and adding it back to the income of the assessee. This order was subjected to the Revisionary Powers of the PCIT u/s 263 by the order dated 21.03.2021.
The PCIT set aside the order holding that in the facts and circumstances of the case, the failure of the Assessing Officer make enquiries/verification to arrive at the correct and complete facts and to apply the correct law makes the assessment order erroneous in so far as prejudicial to the interest of revenue.
Mr M.R.Sharma appearing on behalf of the assessee submitted that the AO has passed a reasoned order after enquiring in detail on all these issues. Referring to the record, it was submitted that the AO was conscious of the scam in penny stock company cases and passed the order after making all possible enquiries from all sources on the issues and none of this evidence in the impugned order is shown to be incorrect.
The assessee in the facts of the present case has sold the shares of M/s CCL International Ltd. which were acquired as a result of the amalgamation of M/s CCL International Ltd. with M/s AAR Infrastructure wherein the assessee had originally invested a certain amount.
there is no allegation of any Regulatory Authority to show that trading in this specific Stock was barred or the company was delisted. We find that suspicions entertained by the Revenue cannot be the basis of unsettling the valid order.
For the sake of removing doubts, it is being clarified that the observations are made to the transaction of buy/sale through the D-Mat account on the Stock Exchange in listed companies.
On a careful consideration of the entire facts, and circumstances and considering the evidence which was filed before the AO and the PCIT, the ITAT bench comprise of Smt Diva Singh, judicial member & Shri Vikram Singh Yadav, accountant member observed that the Revisionary order in the peculiar facts and circumstances proceeds entirely on presumptions, conjectures and surmises. The impugned order was quashed by the ITAT and the appeal of the assessee was allowed.
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