Case Law Details
ACIT Vs Priyanka Ankit Miglani (ITAT Mumbai)
Introduction: The ITAT Mumbai ruling in the case of ACIT Vs Priyanka Ankit Miglani delves into the intricate matters surrounding long-term capital gains (LTCG) derived from the sale of shares and the application of Section 10(38) of the Income Tax Act. The appeal arises from the assessment order passed by the Deputy Commissioner of Income Tax, Central Circle 5(4), Mumbai, against the decision of the Commissioner of Income Tax (Appeals)-53, Mumbai.
Detailed Analysis: The crux of the matter revolves around whether the long-term capital gains claimed as exempt under Section 10(38) were rightfully denied by the Commissioner of Income Tax (Appeals) and the subsequent justification of deleting the addition made by the assessing officer. The case presents a scenario where the Revenue challenges the authenticity of the long-term capital gains arising from the sale of shares of Pine Animation Ltd.
The assessing officer contended that the shares in question were categorized as penny stocks and the gains derived from their sale were therefore considered as bogus. This assertion was supported by references to third-party statements and an interim order by SEBI highlighting price manipulation in the shares of Pine Animation Ltd. However, the appellant provided substantial documentary evidence, including purchase and sale details, demat statements, and compliance with tax regulations, to support the genuineness of the transactions.
The ITAT Mumbai meticulously analyzed the evidence presented by both parties. It highlighted the lack of conclusive evidence linking the appellant to any fraudulent activities or price manipulation schemes. Moreover, the final order by SEBI, absolving the appellant of any wrongdoing, significantly influenced the tribunal’s decision.
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