Bogus Capital Gain

Fetters on Principle of Natural Justice in Penny Stock Cases

Income Tax - Introduction: The assessee has been taking a common argument against the addition on account of penny stock. The said argument revolves around the violation of the principle of natural justice. The assessee pleads that: a) The investigation wing report and other documents which is the basis of treating the transaction as bogus by the depa...

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Judgments in Favour of Revenue in Penny Stock Cases

Income Tax - The provision for exemption of long term capital gains from shares requiring payment of securities transaction tax has been taken advantage by unscrupulous tax evaders. An organised tax evasion involving the brokers of stock exchanges, taxpayers and their consultants, entry operators and exist operators was in action for quite some time....

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Human Probability Scores over Evidence

Income Tax - It is a very well-known fact that High court only entertains question of law and Income tax Appellate Tribunal (ITAT) is the last fact-finding authority. Thus, finding of fact as given by the ITAT would be basis for deciding the matter by High Court or Supreme Court. If, however findings given by the ITAT is […]...

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AO cannot treat LTCG as Bogus merely on SEBI investigation report

M. Kiran Kumar Vs ACIT (ITAT Chennai) - Kiran Kumar Vs ACIT (ITAT Chennai) The AO disallowed the exemption claimed u/s.10(38) solely based on the investigation report by SEBI pertaining to certain cases based from Kolkatta wherein share prices rigged substantially over a period of time. Merely on suspicion and surmises, this disallowance ...

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AO cannot treat LTCG as Bogus by treating a company as penny stock company without any evidence

ITO Vs Shivani Gupta (ITAT Delhi) - ITO Vs Shivani Gupta (ITAT Delhi) The A.O. in this case noted that assessee has sold the shares of Shilpi Cable Technologies Ltd., and claimed exempt under section 10(38) of the I.T. Act of the impugned amount. The A.O. merely declared this company to be penny stock company without bringing any evid...

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LTCG cannot be treated as Unexplained Cash Credits merely for astronomical increase in price of shares

Sh. Mukesh Mittal Vs ITO (ITAT Delhi) - Sh. Mukesh Mittal Vs ITO (ITAT Delhi) The assessment order clearly shows that the AO has merely reproduced the modus operandi of the entry providers who booked bogus long term capital gains through penny stock companies. The show cause notice dated 2.12.2016 issued by the AO during the assessment pr...

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Profit on Sale of penny stock/Shares- ITAT Deletes Addition

DCIT Vs Jainam Investments (ITAT Mumbai) - DCIT Vs Jainam Investments (ITAT MUMBAI) Under this issue the revenue has challenged the deletion of disallowance of Rs.4,71,19,785/- on of sale shares of M/s. Mahavir Advanced Remedies. The Ld. Representative of the revenue has argued that the CIT(A) has wrongly deleted the disallowance of Rs.4,71,...

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Penny Stocks – No addition on mere surmises, suspicion & conjectures

Nishant kantilal Patel  Vs ITO (ITAT Surat) - In the absence of any link between the assessee and the alleged admissions of the directors and brokers, human probability is being used as a vague and convenient medium for the department’s conjectures. No addition can be made on the basis of surmises, suspicion and conjectures. The burden of pro...

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Bogus Capital Gain’s Popular Posts

Recent Posts in "Bogus Capital Gain"

AO cannot treat LTCG as Bogus merely on SEBI investigation report

M. Kiran Kumar Vs ACIT (ITAT Chennai)

Kiran Kumar Vs ACIT (ITAT Chennai) The AO disallowed the exemption claimed u/s.10(38) solely based on the investigation report by SEBI pertaining to certain cases based from Kolkatta wherein share prices rigged substantially over a period of time. Merely on suspicion and surmises, this disallowance was made without any corroborative evide...

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AO cannot treat LTCG as Bogus by treating a company as penny stock company without any evidence

ITO Vs Shivani Gupta (ITAT Delhi)

ITO Vs Shivani Gupta (ITAT Delhi) The A.O. in this case noted that assessee has sold the shares of Shilpi Cable Technologies Ltd., and claimed exempt under section 10(38) of the I.T. Act of the impugned amount. The A.O. merely declared this company to be penny stock company without bringing any evidence on record. Though […]...

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LTCG cannot be treated as Unexplained Cash Credits merely for astronomical increase in price of shares

Sh. Mukesh Mittal Vs ITO (ITAT Delhi)

Sh. Mukesh Mittal Vs ITO (ITAT Delhi) The assessment order clearly shows that the AO has merely reproduced the modus operandi of the entry providers who booked bogus long term capital gains through penny stock companies. The show cause notice dated 2.12.2016 issued by the AO during the assessment proceedings and the findings of the [&hell...

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Profit on Sale of penny stock/Shares- ITAT Deletes Addition

DCIT Vs Jainam Investments (ITAT Mumbai)

DCIT Vs Jainam Investments (ITAT MUMBAI) Under this issue the revenue has challenged the deletion of disallowance of Rs.4,71,19,785/- on of sale shares of M/s. Mahavir Advanced Remedies. The Ld. Representative of the revenue has argued that the CIT(A) has wrongly deleted the disallowance of Rs.4,71,19,785/-, therefore, the finding of the ...

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Penny Stocks – No addition on mere surmises, suspicion & conjectures

Nishant kantilal Patel  Vs ITO (ITAT Surat)

In the absence of any link between the assessee and the alleged admissions of the directors and brokers, human probability is being used as a vague and convenient medium for the department’s conjectures. No addition can be made on the basis of surmises, suspicion and conjectures. The burden of proving a transaction to be bogus has to be...

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ITAT Lucknow deletes addition for alleged Bogus Capital Gains from Penny Stocks

Achal Gupta Vs ITO (ITAT Lucknow)

Achal Gupta Vs ITO (ITAT Lucknow) Documents clearly demonstrates that assessee had purchased shares through Brokers for which the payment was made through banking channels. The assessee had sold shares through authorized stock broker and payment was received through baking channels after deduction of STT. On Page 16 which is a copy of Ban...

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Addition for LTCG merely based on 3rd Party statement without any corroborative material is not sustainable

Kalpana Mukesh Ruia Vs DCIT (ITAT Mumbai)

Kalpana Mukesh Ruia Vs DCIT (ITAT Mumbai) As regards the issue of additions on merits for the bogus long-term capital gain (LTCG), we note that the same is based upon the modus operandi of earning bogus long-term capital gain in general mentioned by the assessing officer. It is further more based upon the statements obtained […]...

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Penny Shares: Delhi HC deletes addition of alleged bogus LTCG

PCIT Vs Krishna Devi (Delhi High Court)

In the instant case, the AO had proceeded predominantly on the basis of the analysis of the financials of M/s Gold Line International Finvest Limited. His conclusion and findings against the Respondent are chiefly on the strength of the astounding 4849.2% jump in share prices of the aforesaid company within a span of two years, which is n...

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Capital Loss cannot be treated as Bogus merely for unusual rise/ fall in price of Shares

DCIT Vs M/s. Ganesh Plantation Ltd. (ITAT Ahmadabad)

DCIT Vs Ganesh Plantation Ltd. (ITAT Ahmadabad) AO on one hand has recorded his finding with respect to the shares of certain companies that its face value stands at ₹10 but the assessee has purchased the same at a higher value. The basis of arriving at the conclusion that the assessee has purchased the shares […]...

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Section 263 order based on ‘cut & paste’ reasoning was Invalid: ITAT Kolkata

Ritin Lakhmani Vs PCIT (ITAT Kolkata)

Ritin Lakhmani Vs PCIT (ITAT Kolkata) In this case The ld. Pr. CIT has simply cut and pasted para 5 to para 5.12.3 and also para 6 from the orders he had passed u/s 263 of the Act from the order of the Pr. CIT passed u/s 263 of the Act in the case of […]...

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