PCIT Vs Sanjaykumar Damjibhai Gangani (Gujarat High Court)
Gujarat High Court held that addition under section 68 of the Income Tax Act towards bogus Long Term Capital Gains [LTCG] from sale of penny stock cannot be sustained since genuineness of the stock proved with evidence. Accordingly, appeal of revenue dismissed.
Facts- The present petition has been filed by the petitioner mainly contesting that ITAT was not justified in deleting the addition of bogus long term capital gain claimed as exempted u/s 10(38) of the Act of Rs.46,96,881/- made by the Assessing Officer arising out of sale of shares of Sunrise Asian Ltd., a penny stock and without appreciating the findings of the Assessing Officer that the price movement of the company were not supported by financial fundamentals of the company.
Read also SC Judgment in thie case:-
SC Allowed LTCG Exemption as Revenue Failed to Prove Penny Stock Manipulation
SC Dismisses Revenue SLP Against Deletion of Section 68 Penny Stock Addition
Conclusion- Held that the presumption drawn by the Assessing Officer was not corroborated by any evidence to establish the alleged non-genuine transaction by the assessee. It was, therefore, rightly held by the Tribunal that the claim of the assessee for exemption of Long Term Capital Gains under Section 10(38) of the Act cannot be held to be bogus on the basis of presumption in absence of any evidence brought on record by the assessee with regard to shares of Sunrise Asian Ltd, which is not even found to be rigged by the SEBI also.
