Addition Deleted Because Suspicion Cannot Substitute Proof in Penny-Stock Cases: ITAT Mumbai

DCIT Vs Varun Vimlesh Mehta (ITAT Mumbai)

Suspicion Cannot Replace Proof — ITAT Rejects Penny-Stock Theory, Deletes ₹3.94 Cr Addition

The Mumbai ITAT dismissed the Revenue’s appeal and upheld the CIT(A)’s deletion of a ₹3.94 crore addition made under Section 69A by treating the assessee’s LTCG on Banas Finance Ltd as bogus. The Tribunal noted that the assessee’s case was supported by end-to-end documentary proof: preferential allotment, ₹20 lakh payment through banking channels, dematerialisation, share split (1:10), and eventual sale of 10 l

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