Penny Stocks Bogus Capital Gain – Calcutta HC upheld Additions

Calcutta High Court order on Penny stock in which  Department’s appeal in penny stock case has been allowed. The Orders of AO and CIT(A) have been restored. Reversed the order of ITAT.

The Court Held that :

1. The assessees cannot take shelter under the opinion given by the experts as it is not the expert who has indulged in the transaction but it is the assessee.

2. the High Court and this Court have always the ‘jurisdiction to intervene if it appears that either the Tribunal has misunderstood the statutory language, because the proper construction of the statutory language is a matter of law, or it has arrived at a finding based on no evidence or where the finding is inconsistent with the evidence or contradictory of it, or it has acted on material partly irrelevant or where the tribunal draws upon its own imagination imports facts and circumstances not apparent from the record of bases its conclusions or mere conjectures or surmises or where no person judicially acting and properly instructed as to the relevant law could have come to the determination reached.

3. we have no hesitation to hold that the orders passed by the CIT(A) affirming the orders passed by the Assessing Officers as well as the orders passed by CIT under Section 263 of the Act were proper and legal and the Tribunal committed a serious error in reversing such decisions.

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