No Independent Verification, No Addition: ITAT Upholds Relief in Penny Stock Case

ITO Vs Prithvi Raj Kandoi (HUF) (ITAT Delhi) AO reopened the assessment u/s 148 based on information from Investigation Wing & treated Rs.8,05,127/- (investment in Global Capital Markets Ltd.) as bogus u/s 68, further adding Rs.24,153/- u/s 69C as commission expenditure (3% of trade value). AO concluded that transactions were only accommodation entries for routing unaccounted money. CIT(A) deleted both additions. Before Tribunal, Dept argued that these were sham penny stock transactions & CIT(A) erred in granting relief. Assessee countered that purchases were through recognized stock e...