Delhi ITAT Deletes Penny Stock Addition Over Lack of Inquiry & Cross-Examination

ITO Vs Arti Arora (ITAT Delhi) Delhi ITAT Tears Apart “Penny Stock” Addition: No Cross-Examination, No Inquiry, No 69A Addition on Mere Investigation Reports In a major relief in an alleged penny stock case, the Delhi ITAT upheld deletion of an addition of ₹1.56 crore made u/s 69A towards alleged bogus Long Term Capital Gain arising from sale of shares of Life Line Drugs & Pharma Ltd. (LDPL). The Assessing Officer had reopened the assessment alleging that the exempt LTCG claimed u/s 10(38) was accommodation entry income routed through penny stock transactions. The Tribunal noted that...