Jayaben Hetalkumar Patel Vs ITO (ITAT Ahmedabad)
Penny Stock Suspicion Cannot Skip the Evidence: ITAT Orders Fresh Assessment
Documentary Evidence Requires Examination
The Ahmedabad ITAT restored a dispute concerning a ₹12,16,738 addition under Section 68 to the Assessing Officer for fresh adjudication. The addition arose from share transactions in a company identified in the order as Hemo Organics Limited, earlier known as Dinesh Hargola, which the Investigation Wing had linked to accommodation entries.
The Tribunal found that the assessee had furnished additional evidence before the CIT(A), including ledger accounts, bank records and contract notes, but the appellate order made no reference to those documents.
Considering both the disruption caused by the COVID pandemic during assessment proceedings and the failure to examine the additional evidence, the Tribunal directed a fresh assessment. It expressly left the merits of the addition undecided.
Share Investment Ended in a Loss
The assessee filed her return for AY 2013-14 on 1 August 2013, declaring total income of ₹2,62,772 and a short-term capital loss of ₹17,672.
She maintained that she regularly invested in shares, conducted transactions through a registered broker on a recognised stock exchange, and made and received payments through banking channels.
According to her explanation recorded in the order, she invested ₹11,44,393 in shares of the company. After holding them for approximately three to four months, she noticed that their prices were continuously declining. She therefore sold the shares for ₹6,21,966, booking a loss of ₹5,22,427.
