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.