Manjula H. Vira Vs ACIT (ITAT Mumbai)
ITAT Mumbai held that the long term capital gains declared by assessee cannot be considered to be bogus since AO didn’t established assessee’s involvement in price rigging. Accordingly, addition not sustainable.
Facts- During the year under consideration, the assessee had declared long term capital gains of Rs.3.21 crores on sale of shares of M/s. Greencrest Financial Services Limited (earlier known as Marigold Glass Industries Ltd.) and claimed the same as exempt u/s 10(38) of the Act. The Investigation Wing had carried out investigation with regard to the price manipulations and generation of bogus long term capital gains in number of stocks, classified as penny stocks. AO noticed that the shares of the above said company was also identified as one of the penny stocks. AO took the view that the long term capital gain declared by the assessee on sale of shares of above mentioned company was pre-arranged method employed by the assessee with the connivance of the operators in order to generate bogus long term capital gains. Accordingly, he took the view that the long term capital gain declared by the assessee is a bogus one and accordingly assessed the entire sale consideration of Rs.3.27 crores u/s 68 of the Act. CIT(A) confirmed additions and hence, the assessee has filed this appeal.
