Section 68 Addition Fails Without Proof of Actual Penny Stock Trades: ITAT Mumbai

ACIT Vs Rajen Kirtilal Shah (ITAT Mumbai) The Mumbai Bench of the Income Tax Appellate Tribunal dismissed the Revenue’s appeal for AY 2013–14 in the case of Rajen Kirtilal Shah, affirming the CIT(A)’s order deleting an addition of ₹2.48 crore under Section 68 that had been made on the allegation of bogus long-term capital gains from penny stock transactions in the scrip of Bakra Pratisthan Ltd. The Tribunal noted that the reassessment was initiated solely on the basis of generic information from the Investigation Wing alleging that Bakra Pratisthan Ltd. was a penny stock used to provid...