ITAT Mumbai Rejects LTCG Exemption Claim on Penny Stocks

Smt. Chitra Avdhesh Mehta Vs ITO (ITAT Mumbai) The case before the Income Tax Appellate Tribunal (ITAT) Mumbai in Smt. Chitra Avdhesh Mehta vs. ITO concerned the tax treatment of long-term capital gains (LTCG) claimed as exempt under Section 10(38) of the Income Tax Act, 1961, arising from the sale of shares alleged to be “penny stocks.” BackgroundThe assessee, an individual, filed her return of income for Assessment Year (AY) 2014-15 declaring ₹4,54,940 as total income, along with an exemption claim of ₹84,79,100 under Section 10(38) for LTCG on listed securities. The case was selecte...