SUMAN PODDAR vs. INCOME TAX OFFICER
HIGH COURT OF DELHI
ITA 841/2019
Sep 17, 2019
Section 10(38), 68
Asst. Year 2014-15
Penny stock—Assessee had filed return of income which was selected for scrutiny—During assessment proceeding, AO noted that assessee had booked LTCG and sought exemption u/s
10(38)—AO completed assessment after making addition by denying exemption claimed u/s 10(38) on account of LTCG—AO found that transaction pertaining to purchase of shares by assessee of M/s S, which was merged with M/s C, to be a bogus transaction by holding that M/s C was a penny stock—Both CIT(A) and ITAT dismissed assessee’s appeal—Held, ITAT had in depth analyzed balance sheets and P&L a/c of M/s. C which shows that astronomical increase in share price of said company which led to returns of 491% for assessee, was completely unjustified—EPS of said company was Rs. 0.01/- as in March 2016, it was Rs. - 0.01/- as in March 2015 and -0.48/- as in March 2014—Similarly, other financial parameters of said company could not justify price in excess of Rs. 500/- at which assessee claimed to have sold said shares to obtain LTCG—It was not explained as to why anyone would purchase said shares at such high price—M/s. C was in fact identified by BSE as a penny stock being used for obtaining bogus LTCG—No evidence of actual sale except contract notes issued by share broker were produced by assessee—Assessee’s appeal dismissed.
HIGH COURT OF DELHI
ITA 841/2019
Sep 17, 2019
Section 10(38), 68
Asst. Year 2014-15
Penny stock—Assessee had filed return of income which was selected for scrutiny—During assessment proceeding, AO noted that assessee had booked LTCG and sought exemption u/s
10(38)—AO completed assessment after making addition by denying exemption claimed u/s 10(38) on account of LTCG—AO found that transaction pertaining to purchase of shares by assessee of M/s S, which was merged with M/s C, to be a bogus transaction by holding that M/s C was a penny stock—Both CIT(A) and ITAT dismissed assessee’s appeal—Held, ITAT had in depth analyzed balance sheets and P&L a/c of M/s. C which shows that astronomical increase in share price of said company which led to returns of 491% for assessee, was completely unjustified—EPS of said company was Rs. 0.01/- as in March 2016, it was Rs. - 0.01/- as in March 2015 and -0.48/- as in March 2014—Similarly, other financial parameters of said company could not justify price in excess of Rs. 500/- at which assessee claimed to have sold said shares to obtain LTCG—It was not explained as to why anyone would purchase said shares at such high price—M/s. C was in fact identified by BSE as a penny stock being used for obtaining bogus LTCG—No evidence of actual sale except contract notes issued by share broker were produced by assessee—Assessee’s appeal dismissed.
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