Suman Poddar Vs ITO (Delhi High Court)
The Delhi High Court dismissed the appeal filed by the assessee against the order of the Income Tax Appellate Tribunal (ITAT) for Assessment Year 2014-15 and upheld the concurrent findings of the Assessing Officer (AO), Commissioner of Income Tax (Appeals) [CIT(A)], and ITAT denying exemption under Section 10(38) of the Income-tax Act, 1961 in respect of Long-Term Capital Gains (LTCG) claimed from the sale of shares. The Court held that no substantial question of law arose since the dispute involved concurrent findings of fact supported by evidence on record.
Also Read SC Judgment in this case: SC Upholds LTCG Addition as Extraordinary Penny Stock Gains Defied Business Logic
The assessee had filed a return declaring income of ₹4,96,650 and claimed exemption under Section 10(38) on LTCG amounting to ₹73,77,806. The claim arose from transactions involving shares of Smartchamps IT and Infra Ltd., which had subsequently merged with Cressanda Solutions Ltd. The AO, after examining the material placed on record and considering the responses submitted by the assessee, denied the exemption and added ₹73,77,806 to the assessee’s income. The AO concluded that the transaction was bogus and that Cressanda Solutions Ltd. was a penny stock company used for generating artificial LTCG claims. The total taxable income was accordingly computed at ₹78,74,456.
