Smt. Bhawna Kapoor Vs ACIT (ITAT Delhi)
In this case, the assessee filed her return of income for Assessment Year 2014-15 and claimed exemption under Section 10(38) of the Income Tax Act on long-term capital gains (LTCG) amounting to ₹33,97,009 arising from the sale of shares of M/s Cressanda Solutions Limited. During scrutiny assessment, the Assessing Officer (AO) relied upon information from the Directorate of Investigation, Kolkata, which had identified several listed penny stock companies allegedly used for generating bogus LTCG. The AO treated the assessee as a beneficiary of such transactions and added ₹33,97,009 to her income. The Commissioner of Income Tax (Appeals) [CIT(A)] upheld the addition.
The assessee filed an appeal before the Income Tax Appellate Tribunal (ITAT) with a delay of 349 days. The Tribunal condoned the delay after accepting the explanation that it occurred due to lack of knowledge regarding the appellate order and coordination issues with the professional handling the matter. The Tribunal observed that the explanation did not indicate mala fide intent and that the assessee had not gained any benefit by delaying the appeal.
Before the Tribunal, the assessee argued that the LTCG arose from genuine share transactions executed through a recognized stock exchange, with consideration received through banking channels. It was contended that there was no evidence linking the assessee to any price rigging, manipulation, entry operators, or any alleged bogus LTCG scheme. The assessee also submitted that merely because a scrip was categorized as a penny stock, all transactions in that scrip could not automatically be treated as bogus. Reliance was placed on various judicial precedents where additions were deleted when transactions were supported by documentary evidence and banking records.
