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“bogus LTCG”

Cash Credits & Unexplained ItemsSection 68Section 68806 judgments

The decision most relied on for bogus LTCG is PCIT v. Swati Bajaj (139 Taxmann.com 352), cited in 443 judgments on BharatTax.

Leading authorities on bogus LTCG

PCIT v. Swati Bajaj
139 Taxmann.com 352 · 2022 · High Court
443
citing judgments

Tax authorities are entitled to examine surrounding circumstances and apply the test of human probabilities to determine the genuineness of long-term capital gains arising from the sale of manipulated penny stock, even if prima facie documents appear to support the transaction.

ITO, 19(3) (4) Mumbai v. Shamim M Bharwani
69 Taxmann.com 65 · 2016 · Reported
142
citing judgments

Long Term Capital Gains (LTCG) from penny stock transactions are liable to be treated as bogus and added back under Section 68 as unexplained cash credits, especially when evidence suggests the involvement of entry operators providing accommodation entries.

Mukesh R.Marolia v. Addl. CIT
6 SOT 247 · 2006 · ITAT
139
citing judgments

The department must substantiate its allegations of a bogus long term capital gain scheme; if not substantiated, the addition made by the Assessing Officer for purported bogus LTCG derived from the purchase/sale of shares cannot be sustained. An assessee's claim for long term capital gains exemption on share transactions should be allowed where documentation supports the transactions.

5. PCIT v. Paramount Communication (P.) Ltd. Delhi High Court
392 ITR 444 · 2017 · High Court
111
citing judgments

For valid initiation of reassessment proceedings, the Assessing Officer must possess tangible material and apply independent mind to form a 'reason to believe' that income has escaped assessment. Reassessment cannot be based on mere borrowed satisfaction or unverified information without proper scrutiny.

Suman Poddar v. ITO
423 ITR 480 · 2020 · High Court
84
citing judgments

The Assessing Officer's detailed findings regarding bogus long-term capital gains from penny stock transactions, established through objective examination of facts and circumstantial evidence, should not be overturned by appellate authorities without a thorough investigation or fresh inquiry.

CIT-I v. Maheshchandra G. Vakil
40 Taxmann.com 326 · 2013 · High Court
69
citing judgments

An Assessing Officer is not justified in treating capital gain from the sale of shares as unexplained cash credit when the assessee proves the genuineness of share transactions with contract notes, broker's bank statements, DMAT accounts, and stock exchange abstracts.

6. CIT v. Jasvinder Kaur
54 Taxmann.com 10 · 2015 · High Court
57
citing judgments

The Assessing Officer must provide the assessee with contrary material if they dispute the genuineness of long-term capital gains claimed under section 10(38). The onus is on the revenue to prove the transaction is a colourable device.

PCIT v. Parasben Kasturchand Kochar
130 Taxmann.com 177 · 2021 · Supreme Court
56
citing judgments

An assessment or reassessment order is considered bad in law and without legal sanction if its completion is not in accordance with prescribed legal procedures or timelines.

Judgments citing bogus LTCG

Heaven Mahendra Shah, Vile Parle (West) vs. Asst. CIT - 33(1), Mumbai, Bandra (East)

In the result, the appeal of the assessee bearing ITA No

ITA 6361/MUM/2024[2015-16]Status: DisposedITAT Mumbai21 Jul 2025AY 2015-16

Bench: Shri Anikesh Banerjee & Smt.Renu Jauhriheaven Mahendra Shah Vs Asst. Cit-33(1), Mumbai C-12, 7Th Floor, Pratyaksha Kar 501/502, Cosmos, N.M. Road, Vile Parle (West), Mumbai-400 Bhavan, Bkc, Bandra (East), 056 Mumbai-400 051 Pan: Aagps3148F Appellant Respondent

For Appellant: Shri Ashok Bansal, CA a/w Shri Ajay Daga, CAFor Respondent: Shri Hemanshu Joshi - SR DR
Section 10Section 10(38)Section 139(1)Section 143(2)Section 143(3)Section 250Section 68

fictitious long-term capital gains (LTCG) and claim bogus exemption under section 10(38), such exemption denied by Assessing Officer by way of treating bogus LTCG in penny stock under purview of unexplained cash under section 68 and unexplained expenditure u/s 69C was justified’. 4.12 Therefore, basis the discussions ... that the investment made by the appellant is nothing but a sham transaction in a penny stock company mainly with the intention of claiming bogus LTCG which is an exempt income and hence, going by the AO’s findings and as held by various courts as discussed in the above

Pritam Kumar, Delhi vs. DCIT, Circle 19(1), Delhi

In the result the appeal of the assessee is allowed

ITA 1131/DEL/2025[2015-16]Status: DisposedITAT Delhi18 Jul 2025AY 2015-16

Bench: SHRI MANISH AGARWAL (Accountant Member)

Section 142(1)Section 147Section 148Section 148ASection 149Section 151Section 151ASection 69

erred both on facts and in law in confirming the addition of Rs.50,49,975/- u/s. 69 of the Act by treating the alleged bogus LTCG concealed income of the appellant. (ii) That the addition has been confirmed despite the transaction having been done through proper banking channel ... filed the return of income by declaring income of Rs. 25,29,444/- on 28-08-2015. Subsequently information received that the assessee claimed Bogus LTCG through reputed stocks by issuing ante dated forged notes to the tune of Rs. 50,49,975/-. Notice u/s 142(1) was issued

Santosh Kanwar, Jaipur vs. ITO 6(4 ) Jaipur, Jaipur

ITA 937/JPR/2024[2015-2016]Status: DisposedITAT Jaipur17 Jul 2025AY 2015-2016

Bench: BEFORE: SHRI GAGAN GOYAL (Accountant Member), SHRI NARINDER KUMAR (Judicial Member)

For Appellant: NoneFor Respondent: Shri Gautam Singh Choudhary, JCIT-DR
Section 10(38)Section 115BSection 142(1)Section 143(3)Section 234ASection 274Section 288Section 68Section 69C

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Jh xxu xks;y

Income Tax Officer, Ward-1, Jalna vs. Ashish Omprakash Mantri, Jalna

In the result, all the appeals filed by the Revenue are dismissed

ITA 148/PUN/2024[2012]Status: DisposedITAT Pune17 Jul 2025

Bench: Shri R. K. Panda & Ms Astha Chandra

For Appellant: Shri Kishor B PhadkeFor Respondent: Shri Amol Khairnar, CIT-DR
Section 10(38)Section 132Section 143(2)Section 143(3)Section 147Section 148Section 151

assessee wherein the assessee was requested to give explanation regarding trading of the scrip of penny stock company wherein he has earned bogus LTCG. In response to the show cause notice, the assessee filed the requisite details. However, the Assessing Officer was not satisfied with the submissions made ... Paper- Book. Perusal of these statements reveal that, nowhere, assessee has been named by these three brokers as any beneficiary of the alleged bogus LTCG. Yet, the I-T department has relied upon these statements for taxing the exempt LTCG as bogus LTCG. Assessee has even requested for CROSS examination

Income Tax Officer, Ward 1, Jalna vs. Ashish Omprakash Mantri, Jalna

ITA 147/PUN/2024[2011]Status: DisposedITAT Pune17 Jul 2025

Bench: Shri R. K. Panda & Ms Astha Chandra

Section 10(38)Section 132Section 143(2)Section 143(3)Section 147Section 148Section 151

assessee wherein the assessee was requested to give explanation regarding trading of the scrip of penny stock company wherein he has earned bogus LTCG. In response to the show cause notice, the assessee filed the requisite details. However, the Assessing Officer was not satisfied with the submissions made

Income Tax Officer, Ward -1, Jalna vs. Pramila Omprakash Mantri, Jalna

In the result, all the appeals filed by the Revenue are dismissed

ITA 146/PUN/2024[2012]Status: DisposedITAT Pune17 Jul 2025

Bench: Shri R. K. Panda & Ms Astha Chandra

For Appellant: Shri Kishor B PhadkeFor Respondent: Shri Amol Khairnar, CIT-DR
Section 10(38)Section 132Section 143(2)Section 143(3)Section 147Section 148Section 151

assessee wherein the assessee was requested to give explanation regarding trading of the scrip of penny stock company wherein he has earned bogus LTCG. In response to the show cause notice, the assessee filed the requisite details. However, the Assessing Officer was not satisfied with the submissions made ... Paper- Book. Perusal of these statements reveal that, nowhere, assessee has been named by these three brokers as any beneficiary of the alleged bogus LTCG. Yet, the I-T department has relied upon these statements for taxing the exempt LTCG as bogus LTCG. Assessee has even requested for CROSS examination

Income Tax Officer, Ward-1, Jalna vs. Pramila Omprakash Mantri, Jalna

In the result, all the appeals filed by the Revenue are dismissed

ITA 145/PUN/2024[2011]Status: DisposedITAT Pune17 Jul 2025

Bench: Shri R. K. Panda & Ms Astha Chandra

For Appellant: Shri Kishor B PhadkeFor Respondent: Shri Amol Khairnar, CIT-DR
Section 10(38)Section 132Section 143(2)Section 143(3)Section 147Section 148Section 151

assessee wherein the assessee was requested to give explanation regarding trading of the scrip of penny stock company wherein he has earned bogus LTCG. In response to the show cause notice, the assessee filed the requisite details. However, the Assessing Officer was not satisfied with the submissions made ... Paper- Book. Perusal of these statements reveal that, nowhere, assessee has been named by these three brokers as any beneficiary of the alleged bogus LTCG. Yet, the I-T department has relied upon these statements for taxing the exempt LTCG as bogus LTCG. Assessee has even requested for CROSS examination

Income Tax Officer, Ward-1, Jalna vs. Atul Omprakash Mantri, Jalna

In the result, all the appeals filed by the Revenue are dismissed

ITA 143/PUN/2024[2012]Status: DisposedITAT Pune17 Jul 2025

Bench: Shri R. K. Panda & Ms Astha Chandra

For Appellant: Shri Kishor B PhadkeFor Respondent: Shri Amol Khairnar, CIT-DR
Section 10(38)Section 132Section 143(2)Section 143(3)Section 147Section 148Section 151

assessee wherein the assessee was requested to give explanation regarding trading of the scrip of penny stock company wherein he has earned bogus LTCG. In response to the show cause notice, the assessee filed the requisite details. However, the Assessing Officer was not satisfied with the submissions made ... Paper- Book. Perusal of these statements reveal that, nowhere, assessee has been named by these three brokers as any beneficiary of the alleged bogus LTCG. Yet, the I-T department has relied upon these statements for taxing the exempt LTCG as bogus LTCG. Assessee has even requested for CROSS examination

Income Tax Officer, Ward-1, Jalna vs. Atul Omprakash Mantri, Jalna

In the result, all the appeals filed by the Revenue are dismissed

ITA 142/PUN/2024[2011]Status: DisposedITAT Pune17 Jul 2025

Bench: Shri R. K. Panda & Ms Astha Chandra

For Appellant: Shri Kishor B PhadkeFor Respondent: Shri Amol Khairnar, CIT-DR
Section 10(38)Section 132Section 143(2)Section 143(3)Section 147Section 148Section 151

assessee wherein the assessee was requested to give explanation regarding trading of the scrip of penny stock company wherein he has earned bogus LTCG. In response to the show cause notice, the assessee filed the requisite details. However, the Assessing Officer was not satisfied with the submissions made ... Paper- Book. Perusal of these statements reveal that, nowhere, assessee has been named by these three brokers as any beneficiary of the alleged bogus LTCG. Yet, the I-T department has relied upon these statements for taxing the exempt LTCG as bogus LTCG. Assessee has even requested for CROSS examination

Income Tax Officer, Ward-1, Jalna vs. Omprakash Asaram Mantri, Jalna

In the result, all the appeals filed by the Revenue are dismissed

ITA 141/PUN/2024[2012]Status: DisposedITAT Pune17 Jul 2025

Bench: Shri R. K. Panda & Ms Astha Chandra

For Appellant: Shri Kishor B PhadkeFor Respondent: Shri Amol Khairnar, CIT-DR
Section 10(38)Section 132Section 143(2)Section 143(3)Section 147Section 148Section 151

assessee wherein the assessee was requested to give explanation regarding trading of the scrip of penny stock company wherein he has earned bogus LTCG. In response to the show cause notice, the assessee filed the requisite details. However, the Assessing Officer was not satisfied with the submissions made ... Paper- Book. Perusal of these statements reveal that, nowhere, assessee has been named by these three brokers as any beneficiary of the alleged bogus LTCG. Yet, the I-T department has relied upon these statements for taxing the exempt LTCG as bogus LTCG. Assessee has even requested for CROSS examination

Income Tax Officer, Ward-1, Jalna vs. Omprakash Asaram Mantri, Jalna

In the result, all the appeals filed by the Revenue are dismissed

ITA 140/PUN/2024[2011]Status: DisposedITAT Pune17 Jul 2025

Bench: Shri R. K. Panda & Ms Astha Chandra

For Appellant: Shri Kishor B PhadkeFor Respondent: Shri Amol Khairnar, CIT-DR
Section 10(38)Section 132Section 143(2)Section 143(3)Section 147Section 148Section 151

assessee wherein the assessee was requested to give explanation regarding trading of the scrip of penny stock company wherein he has earned bogus LTCG. In response to the show cause notice, the assessee filed the requisite details. However, the Assessing Officer was not satisfied with the submissions made ... Paper- Book. Perusal of these statements reveal that, nowhere, assessee has been named by these three brokers as any beneficiary of the alleged bogus LTCG. Yet, the I-T department has relied upon these statements for taxing the exempt LTCG as bogus LTCG. Assessee has even requested for CROSS examination

Income Tax Officer, Piramal Chambers vs. Ketan Dilip Shah, Mumbai

ITA 2238/MUM/2025[2015]Status: DisposedITAT Mumbai15 Jul 2025

Bench: Shri Pawan Singh(Hybrid Hearing) Income Tax Officer Ketan Dilip Shah Room No. 613, 6Th Floor, Vs A- 151, Grand Paradi Apartments, Piramal Chambers, August Kranti Marg, Cumballa Hill, Maharashtra-400012. Maharashtra-400026. [Pan: Aaeps3824N] Appellant / Revenue Respondent / Assessee

Section 10(38)Section 254(1)Section 690

capital gains arisen on Ketan Dilip Shah sale of this scrip was an arranged transaction and was executed to obtain accommodation entries of bogus LTCG to the beneficiary after routing unaccounted money?" 4. Whether on the facts and circumstances of the case and in law, Lt. CITIA) has erred

Kalavathi Devi Sharma, Hyderabad vs. ITO, Ward-1, Nanded

In the result, appeal of the assessee is dismissed

ITA 1519/PUN/2024[2016-17]Status: DisposedITAT Pune14 Jul 2025AY 2016-17

Bench: Dr.Manish Borad

For Appellant: NoneFor Respondent: Shri S. Sadananda Singh, JCIT
Section 10(38)Section 147Section 148Section 148ASection 149Section 250Section 68

elaborately discussed the matter in the Assessment Order. When an information is received from the Investigation Wing of the department regarding the beneficiaries of bogus LTCG transactions through a share broker, It cannot be said that the information is not correct and there is no need to make further enquiry ... denied said claim and made additions under section 68 on ground that assessee invested in shares of penny stock companies which provided bogus LTCG, sirice assessee failed to establish genuineness of rise of price of shares within a short period of time that too when general market trend was recessive

R.D. Vohra HUF, New Delhi vs. PCIT, Faridabad

In the result, the application for condonation of delay of 165 days in filing

ITA 4948/DEL/2024[2015-16]Status: DisposedITAT Delhi09 Jul 2025AY 2015-16

Bench: Shri Shamim Yahya & Shri Vimal Kumar

For Appellant: Shri Rajkumar Gupta, CA & Shri J.PFor Respondent: Ms. Monika Singh, CIT (DR)
Section 142(1)Section 147Section 148Section 151Section 263

therefore sustainable. 3. 147 only on this issue duly examined during 147 proceedings - 147 proceedings initiated only on the issue of alleged bogus LTCG. - During asstt. U/s. 147, vide 142(1) Dtd. 17.12.21 (Q.5&6), A.O. specifically raised query for declared LTCG of Rs.24,96,678/- as well ... Kolkata Stock Exchange, it was found that Shri Ashok Kayan, broker traded in 9 penny stacks at the platform of CSE for providing bogus LTCG to clients which included the script of M/s Blueprint Securities Ltd. in which the assessee has claimed to have traded. On the direction of SEBI

Tremendous Mining and Minerals Pvt Limited, Delhi vs. DCIT Central Circle-3, New Delhi

ITA 157/DEL/2023[2012-13]Status: DisposedITAT Delhi09 Jul 2025AY 2012-13

Bench: Shri S. Rifaur Rahman & Shri Anubhav Sharmaassessment Year: 2012-13 Tremendous Mining & Vs Dcit, Minerals Pvt. Ltd., Central Circle-3, Cabin No.-1, 1205, New Delhi. 89-Hemkunth Chamber, Nehru Place, New Delhi – 110 019. Pan: Aacct8840N (Appellant) (Respondent) Assessee By : Shri Ashwini Kumar, Ca & Shri Ankur Aggarwal, Ca Revenue By : Shri Kailash Dan Ratnoo, Cit-Dr Date Of Hearing : 01.05.2025 Date Of Pronouncement : 09.07.2025 Order Per Anubhav Sharma, Jm: This Appeal Is Preferred By The Assessee Against The Order Dated 05.01.2023 Of The Commissioner Of Income-Tax (Appeals)-23, New Delhi (Hereinafter Referred To As The Ld. First Appellate Authority Or ‘The Ld. Faa’, For Short) In Appeal No.Cit(A), Delhi-23/10303/2019-20 Arising Out Of The Appeal Before It Against The Order Dated 24.12.2019 Passed U/S 148 Of The Income Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) By The Dcit, Central Circle- 3, Delhi (Hereinafter Referred To As The Ld. Ao).

For Appellant: Shri Ashwini Kumar, CA &For Respondent: Shri Kailash Dan Ratnoo, CIT-DR
Section 132Section 139Section 143(1)Section 143(3)Section 148Section 153A

money laundering in a big way. The transaction of the appellant is basically part & parcel of organised financial crime wherein various modus operandi like bogus LTCG, bogus share capital etc. was employed to bring unaccounted money in the books of accounts. The money was routed through various entities to evade ... money laundering in a big way. The transaction of the appellant is basically part & parcel of organised financial crime wherein various modus operandi like bogus LTCG, bogus share capital etc. was employed to bring unaccounted money in the books of accounts. The money was routed through various entities to evade

DCIT, Central Circle-1, Jaipur vs. Trilok Dewan, Sikar

In the result, the appeals of the revenue in ITA No

ITA 303/JPR/2025[2016]Status: DisposedITAT Jaipur08 Jul 2025

bogus share purchases / sales which were arranged by the assessee to convert its undisclosed income in the shape of LTCG, which is in fact bogus LTCG. Ld. AO noted that in search and post search proceedings, thorough examination was carried out and it was observed that the members of Dewan/Banka/Agarwal ... ABRPG4589Q) 4. Maheswari Financial Services Pvt. Ltd. (PAN:AAACM9185B) 5. VemuriFinvest Pvt. Ltd. (PAN: AAACV3615M) (Para No.5.3.3 of assessment order), (iv) Surrender of bogus LTCG by assesse earned in script "India Infotech" in IDS- 2016. (Para No.5.3.4 of assessment order)& Recommendation of the SIT on black Money (Para No.5.4.2

DCIT, Central Circle-1, Jaipur vs. Trilok Dewan, Sikar

In the result, the appeals of the revenue in ITA No

ITA 302/JPR/2025[2014]Status: DisposedITAT Jaipur08 Jul 2025

bogus share purchases / sales which were arranged by the assessee to convert its undisclosed income in the shape of LTCG, which is in fact bogus LTCG. Ld. AO noted that in search and post search proceedings, thorough examination was carried out and it was observed that the members of Dewan/Banka/Agarwal

DCIT, Central Circle-1, Jaipur vs. Vaibhav Banka, Sikar

In the result, the appeals of the revenue stands dismissed, and the

ITA 301/JPR/2025[2016]Status: DisposedITAT Jaipur08 Jul 2025

Bench: DR. S. SEETHALAKSHMI (Judicial Member)

bogus share purchases / sales which were arranged by the assessee to convert its undisclosed income in the shape of LTCG, which is in fact bogus LTCG. Ld. AO noted that in search and post search proceedings, thorough examination was carried out and it was observed that the members of Dewan/Banka/Agarwal ... ABRPG4589Q) 4. Maheswari Financial Services Pvt. Ltd. (PAN:AAACM9185B) 5. VemuriFinvest Pvt. Ltd. (PAN: AAACV3615M) (Para No.5.3.3 of assessment order), (iv) Surrender of bogus LTCG by assesse earned in script "India Infotech" in IDS- 2016. (Para No.5.3.4 of assessment order)& Recommendation of the SIT on black Money (Para No.5.4.2

DCIT, Central Circle-1, Jaipur vs. Sarita Dewan, Sikar

In the result, the appeals of the revenue in ITA No

ITA 300/JPR/2025[2016]Status: DisposedITAT Jaipur08 Jul 2025

bogus share purchases / sales which were arranged by the assessee to convert its undisclosed income in the shape of LTCG, which is in fact bogus LTCG. Ld. AO noted that in search and post search proceedings, thorough examination was carried out and it was observed that the members of Dewan/Banka/Agarwal

DCIT, Central Circle-1, Jaipur vs. Sarita Dewan, Sikar

In the result, the appeals of the revenue in ITA No

ITA 299/JPR/2025[2014]Status: DisposedITAT Jaipur08 Jul 2025

bogus share purchases / sales which were arranged by the assessee to convert its undisclosed income in the shape of LTCG, which is in fact bogus LTCG. Ld. AO noted that in search and post search proceedings, thorough examination was carried out and it was observed that the members of Dewan/Banka/Agarwal