ITAT Ahmedabad Deletes Penny Stock Addition for Lack of Evidence- Suspicion Cannot Replace Proof

ITO Vs Legal Heir of Arvindkumar Sevantilal Shah (ITAT Ahmedabad) Revenue filed an appeal against the order of the CIT(A) challenging deletion of an addition of ₹1,42,200 made on account of alleged penny stock transactions in the scrip of M/s VMS Industries Ltd. AO had treated the profit from the sale of shares as bogus, presuming the transaction to be part of a penny stock accommodation entry scheme. AO alleged that Assessee had made investments and booked long-term capital gains from manipulative trading in the said scrip. Tribunal’s Observations/Decision Tribunal noted that the Revenue ...