Smt. Preeti Gupta Vs DCIT (ITAT Hyderabad)
The Hyderabad ITAT deleted additions made under Section 69A in alleged penny stock transactions, holding that genuine, documented transactions cannot be disregarded based on general investigation reports and suspicion.
The assessee had declared capital gains from sale of shares of Vandana Knitwear Ltd., supported by demat statements, contract notes, bank records, and SEBI-registered broker details. However, the AO treated the transactions as bogus based on investigation reports on penny stocks and added the entire sale proceeds as unexplained income.
The Tribunal observed that , no discrepancy was found in the documentary evidence, and no material was brought on record to establish involvement of the assessee in price rigging or accommodation entries. It emphasized that mere abnormal price fluctuations or general reports cannot justify addition without specific evidence against the assessee.
Accordingly, the ITAT held the transactions to be genuine, directed deletion of additions, and allowed capital gains treatment (including exemption in the second year), thereby allowing both appeals in favour of the assessee
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
These two appeals are filed by Smt. Preeti Gupta (“the assessee”), feeling aggrieved by the separate orders passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”) dated 14.05.2025 & 16.05.2025 for the A.Ys.2013-14 & 2014-15 respectively. Since identical issues are raised by the assessee in both these appeals, for the sake of convenience, these were heard together and are being disposed of by this common and consolidated order.
