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| The Tax Publishers2020 TaxPub(DT) 0393 (Pune-Trib) : (2020) 204 TTJ 0261 INCOME TAX ACT, 1961
Section 10(38)
Where assessee obtained only accommodation entries in the garb of long term capital gain from transfer of its shares, for which an appropriate addition has rightly been made and upheld by authorities and assessee had indulged in a dubious share transaction meant to account for undisclosed income in the garb of long-term capital gain, therefore gain was held to be rightly assessed as undisclosed income.
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Exemption under section 10(38) - Bogus LTCG - Penny stock - Eligibility of
Assessee's case was selected for scrutiny on the ground, inter alia, of 'Suspicious sale transaction in shares. AO made disallowance of exemption claimed under section 10(38) amounting to Rs. 19,32,538 in respect of long term capital gain earned on sale of equity shares of M/s P. Held: M/s. P was a penny stock company and assessee obtained only accommodation entries in garb of long term capital gain from transfer of its shares, for which an appropriate addition has rightly been made and upheld by authorities. The fantastic sale price was not at all possible as there was no economic or financial basis to justify the price rise. It was held that assessee had indulged in a dubious share transaction meant to account for undisclosed income in the garb of long term capital gain. Gain was accordingly held to be rightly assessed as undisclosed income.
REFERRED : Sumati Dayal v. CIT (1995) 214 ITR 801 (SC) : 1995 TaxPub(DT) 1173 (SC) CIT v. Durga Prasad More (1971) 82 ITR 540 (SC) : 1971 TaxPub(DT) 0375 (SC) Suman Poddar v. ITO ITA 841/2019 : 2019 TaxPub(DT) 6695 (Del-HC) Sanjay Bimalchand Jain v. Pr. CIT & Anr. ITA 18/2017 : 2017 TaxPub(DT) 5257 (Bom-HC)
FAVOUR : Against the assessee
A.Y. :
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