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| The Tax Publishers2019 TaxPub(DT) 6635 (Mum-Trib) INCOME TAX ACT, 1961
Section 68
Enormous jump in no time of share price of little-known company without any economic or financial justification was a classic case of penny stock transaction and such conversion of unaccounted money through dubious method was not permissible, accordingly, AO was justified in making addition under section 68.
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Income from undisclosed sources - Addition under section 68 - Sale proceeds of shares - Enormous jump in no time of share price of little-known company without any economic or financial justification
Assessee declared long-term capital gain (LTCG) on sale of shares of little-known company as exempt under section 10(38). AO noticed that share price of the company had jumped 3,800% in no time and accordingly, AO holding LTCG as bogus, subjected sale proceeds of shares to addition under section 68.Held: Enormous jump in no time of share price of little-known without any economic or financial justification was a classic case of penny stock transaction and such conversion of unaccounted money through dubious method was not permissible, accordingly, AO was justified in making addition under section 68.
Relied:CIT v. Durga Prasad More (1971) 82 ITR 540 (SC) : 1971 TaxPub(DT) 375 (SC) and Sumati Dayal v. CIT 1995 SCC Supl. (2) 453 : 1995 TaxPub(DT) 1173 (SC) vide Order, dt. 28-3-1995.
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2014-15
IN THE ITAT, MUMBAI BENCH
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