Case Law Details
Hema Ramesh Jain Vs ITO (ITAT Mumbai)
ITAT Mumbai held that addition u/s. 68 of the Income Tax Act by treating transaction of sale of shares of Sunrise Asian as a bogus penny stock unsustainable as material on records supports genuineness of the transactions.
Facts- The case of the assessee was selected for scrutiny. AO observed that the assessee had shown income from Capital Gains & other sources and claimed LTCG on sale of shares of the scrip Sunrise Asian.
According to the AO, the scrip M/s. Sunrise was a penny-stock. AO was of the opinion that the assessee’s LTCG was part of an organized scam/circular trading and by doing so, the assessee was evading tax, launder money by becoming beneficiary of that organized scam. And thus, he was of the opinion that LTCG claim of the assessee to the tune of Rs.23,88,825/- which was claimed as exempt income u/s 10(38) of the Act cannot be allowed. According to AO, entire transaction giving rise to the capital gains are merely fictitious bogus accommodation entries through which unaccounted money of the assessee has been converted into accounted money. Therefore, the entire sales consideration of shares of Rs.25,12,020/- was added by AO as income of the assessee.
CIT(A) dismissed the appeal of the assessee. Being aggrieved, the present appeal is filed.
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