Minimal Control Over Penny Stock Companies Does Not Invalidate Income Source

DCIT Vs Nishit Capinvest Pvt Ltd (ITAT Delhi) Introduction: In a significant ruling on January 4, 2024, the Income Tax Appellate Tribunal (ITAT) Delhi in the case of DCIT Vs Nishit Capinvest Pvt Ltd, addressed the contentious issue of the legitimacy of the source of income derived from transactions in penny stocks. The Revenue challenged the Commissioner of Income Tax (Appeals)-26, New Delhi’s decision, which favored the assessee, Nishit Capinvest Pvt Ltd, a company engaged in investment business, for the assessment year 2016-17. Detailed Analysis The crux of the Revenue’s appeal w...