| COURT: | ITAT Pune |
| CORAM: | D. Karunakara Rao (AM) |
| SECTION(S): | 10(38) |
| GENRE: | Domestic Tax |
| CATCH WORDS: | bogus capital gains, Penny Stocks |
| COUNSEL: | Deepa Khare |
| DATE: | March 1, 2019 (Date of pronouncement) |
| DATE: | March 9, 2019 (Date of publication) |
| AY: | 2015-16 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 10(38) Bogus Capital Gains from Penny Stocks: Though the AO did not find any mistake in the documentation furnished by the assessee, there is need for finding of fact on (i) the nature of the shares transactions; (ii) make-believe nature of paper work; (iii) Camouflage the bogus nature; and, (iv) the relevance of human probabilities etc (NDR Promoters 410 ITR 379 (Del) referred) | |
In the present case, it is beyond preponderance of probability that the fantastic sale price of a little known share i.e. Mishka Finance & Trading Ltd. without economic or financial basis, would increase from Rs.0.37/- to Rs.45/- per share. If one considers the fact that the assessee got 24,000/- shares against original 300 shares, the price increase is 120 times within 24 months which is evident from the fact that by investing Rs.9000/-, the assessee has got Rs.10,19,050/- (in respect of 22,500/- shares only) in a span of 24 months. There is no doubt that the capital gain was manipulated and bogus and was done only to claim exemption U/s 10(38). Once the entire transaction is viewed from the perspective of human probabilities, it definitely fails on all counts
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