Rambilash Rajaram Jajoo Vs ITO (ITAT Surat)
ITAT Surat held that addition under section 68 of the Income Tax Act treating transaction as bogus merely on the basis of suspicion, presumptions and probability is not sustainable in law. Accordingly, appeal of assessee allowed.
Facts- Present appeal is preferred by the appellant mainly contesting re-opening of assessment under section 147 of the Income Tax Act. Appellant has also contested addition towards unexplained cash credit under section 68 of the Income Tax Act and addition towards unexplained expenditure under section 69C of the Income Tax Act.
Conclusion- Hon`ble Jurisdictional High Court of Gujarat in the case of Jag at Pravin Bhai Sarabhai, [2022] 142 com 247, held that where Assessing Officer noted that assessee had indulged in scrip of shell company and had claimed long term capital gain on sale of shares and made addition under section 68 holding that entire transaction was bogus and in the nature of penny stock, however, since genuineness of investment in shares by assessee was substantiated by him by producing copy of transaction statement for period from 1-6-2001 to 1-10-2010 and shares were retained for more than ten years and were sold after such long time, hence investment was not bogus therefore it cannot be treated that investment was made in penny stock.
