Bogus penny stock capital gains: Claim of the assessee cannot be denied on the basis of presumption and surmises in respect of penny stock by disregarding the direct evidences on record relating to the sale/purchase transactions in shares supported by broker’s contract notes, confirmation of receipt of sale proceeds through regular banking channels and the demat account.
Section 251(2) provides that the Commissioner (Appeal) shall not embark on enhancement of an assessment unless the assessee has been granted a reasonable opportunity of showing cause against such We find no reference to the issuance of enhancement notice in the appellate order of the CIT(A).
It is a fairly settled law that forfeiture of share application money which has been duly received by the appellant in terms of prospect and credited to capital reserve account was a capital receipt.
Revenue is believed to prove that the activities undertaken by the alleged company are not meeting commercial prudence and the working of this company is merely to provide accommodation entries.
It is correct that the terms of partnership provided payment of interest at the rate of 12 per cent on capital of partners as well as remuneration to the working partners. The assesses, however, did not make payment thereof to the partners nor made any provision of liability in the books of account
There is hardly any dispute about the settled law that quantum and penalty proceedings are altogether different and each and every disallowance/addition made in the course of former proceedings does not ipso facto attract the latter penal action as per hon’ble apex decision in CIT vs. Reliance Petroproducts Pvt. Ltd. 322 ITR 158 (SC).
AO bound to demonstrate that the assessee has failed to disclose material facts fully and truly which has resulted in escapement of income. If he fails to demonstrate this aspect, then, in the case where scrutiny assessment has been made and four years have expired, he cannot take action under section 147 of the Income Tax Act.
This appeal of Revenue for Asst. Year 2009-10 is directed against the order of ld. CIT(A)-XV, Ahmedabad, dated 2nd July, 2012 vide appeal No.CIT(A)-XV/406/ITO-9(1 )/1 1-12 arising out of the order u/s 143(3) of the IT Act, 1961 (in short the Act), framed on 23/12/2011 by ITO, 9(1), Ahmedabad. Following grounds have been raised by the Revenue
First ground of the assessee for claiming the deduction under section 80IB was that it had started production in Asstt.Year 2004-05. Asstt.Year 2006-07 is the third year. Deduction under section 80IB was granted in Asstt.Year 2005-06 in a scrutiny assessment.
CBDT itself has accepted the proposition that the share income from the firm received by the partners is exempt u/s 10(2A) of the Act and under no circumstances can be taxed in the hands of the partners.
