Case Law Details
Uttam M Jain Vs Addl./Joint/Deputy/ACIT/ITO/National E-Assessment Centre (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT) Mumbai recently issued a landmark order in the case of Uttam M Jain vs. ACIT, wherein it overturned the additions made by the Assessing Officer (AO) related to alleged bogus long-term capital gains (LTCG) from penny stocks. The appeal was filed against the order dated 10/05/2023 passed by the National Faceless Appeal Centre (NFAC) Delhi.
Background of the Case:
The Assessee had declared an income of Rs.15,53,430/- for the Assessment Year 2012-13, which was processed under section 143(1) of the Income-tax Act, 1961. Subsequently, based on information received from the DDIT(Inv) Unit-VIII(3), Mumbai, an investigation revealed alleged manipulation in the scrip of M/s Nivya Infrastructure & Telecom Services Ltd. The AO issued a notice under section 148 of the Act, contending that income to the extent of Rs.33,68,750/- had escaped assessment.
The AO treated this amount as deemed income of the Assessee under section 68 of the Act and added Rs.1,68,437/- as a commission allegedly paid to the penny stock holder/provider as LTCG under section 69C of the Act.
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