| COURT: | ITAT Lucknow |
| CORAM: | A. D. Jain (JM), T. S. Kapoor (AM) |
| SECTION(S): | 10(38), 45, 48 |
| GENRE: | Domestic Tax |
| CATCH WORDS: | bogus capital gains, Penny Stocks |
| COUNSEL: | Rakesh Garg |
| DATE: | December 16, 2020 (Date of pronouncement) |
| DATE: | January 27, 2021 (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: The documents demonstrates that the assessee had purchased shares through Brokers for which the payment was made through banking channels. The assessee had sold shares through an authorized stock broker and payment was received through baking channels after deduction of STT. The AO has not doubted any of the documents. The only objection raised is that the script from which the assessee had earned Long Term Capital Gain has been held by the Investigation Wing of the Revenue to be a paper entity and that this scrip was being used for creating artificial capital gain. The objection is not acceptable (Udit Kalra (Delhi High Court) distinguished) | |
On going through the aforesaid judgment, we find that no question of law was formulated by Hon’ble High Court of Delhi in the said case and there is only dismissal of appeal in limine and the Hon’ble High Court found that the issue involved is a question of fact as held by Hon’ble Apex Court in Kunhayyammed vs State of Kerala reported in 245 ITR 360 and also in CIT vs. Rashtradoot (HUF) reported in 412 ITR 17. Even on merits and facts, the said judgment in the case of Udit Kalra vs ITO (supra) is distinguishable as in that case the scrips of the company were delisted on stock exchange, whereas, in the instant case, the interim order of SEBI in the cases of M/s Esteem Bio and M/s Turbotech have been cooled down by subsequent order of SEBI placed by assessees in its paper book. Thus, the case of Udit Kalra vs ITO relied by ld. DR is clearly distinguishable on facts and is not applicable to the facts of assessee. Thus, we hold that the case of assessee is factually and materially distinguishable from the facts of the case of Udit Kalra vs ITO so relied by ld DR
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