“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

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

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

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

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

Miker Financial Consultants Pvt. Ltd., Mumbai vs. Ward-10(2)(4), Mumbai

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 849/MUM/2024[2017-18]Status: DisposedITAT Mumbai23 Apr 2025AY 2017-18

Bench: SHRI VIKRAM SINGH YADAV (Accountant Member), SHRI SANDEEP SINGH KARHAIL (Judicial Member)

Section 144Section 151Section 250Section 68Section 69C

offered the net profit of Rs 40,79,014/- as business income whereas the AO has alleged that the assessee has earned bogus LTCG of Rs 80,46,876/-. We therefore find that there is clearly a disconnect between the facts of the case as submitted by the assessee

Income Tax Officer, Ward-9(1), Kolkata vs. Sur Mangal Holdings Private Limited, Kolkata

In the result, appeal of the revenue stands dismissed

ITA 1437/KOL/2024[2017-18]Status: DisposedITAT Kolkata22 Apr 2025AY 2017-18

Bench: Shri Rajesh Kumar, Am & Shri Pradip Kumar Choubey, Jm]

Section 147Section 148(1)Section 68Section 69

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA [Before Shri Rajesh Kumar, AM & Shri Pradip Kumar Choubey, JM] I.T.A

Income Tax Officer Ward 25 (3)(1), Mumbai, Kautliya Bhavan, Bandra Kurla Complex vs. Nikunj Ambalal Patel (HUF), Mumbai

In the result, the appeal of the revenue is dismissed

ITA 4303/MUM/2024[2017-18]Status: DisposedITAT Mumbai22 Apr 2025AY 2017-18

Bench: Shri Sandeep Gosain & Smt. Renu Jauhriआयकर अपील सं./Ita No. 4303/Mum/2024 (निर्धारण वर्ा / Assessment Year :2017-18)

For Appellant: Shri Satyaprakash SinghFor Respondent: Ms. Rampriya Raghavan

Section 143(1)(a)Section 147Section 148Section 250Section 69C

Members have been found involved in manipulating securities capital market to help their beneficiaries to convert their ill-gotten gains into tax exempt bogus LTCG. During the Investigation Period, price of the script of Kushal Group increased from Rs. 22.95 to Rs. 153/-registering an increase

ITO-19(3)(1), Mumbai vs. Raichand Parasmal Chokshi, Mumbai

In the result, both the appeals by the revenue are dismissed

ITA 1486/MUM/2024[2017-18]Status: DisposedITAT Mumbai22 Apr 2025AY 2017-18

Bench: Shri Amit Shukla & Shri Girish Agrawalassessment Year: 2017-18 Income Tax Officer 19(3)(1) Raichand Parasmal Chokshi 405, Piramal Chambers, 305, Ashirwad Building, Lalabaug 10Th Khetwadi Lane, Vs. Mumbai 400012 Mumbai 400004. (Pan: Aaapc6486C) (Appellant) (Respondent) Assessment Year: 2017-18 Income Tax Officer 19(3)(1) Raichand Parasmal Chokshi 405, Piramal Chambers, Huf Lalabaug 305, Ashirwad Building, Mumbai 400012 Vs. 10Th Khetwadi Lane, Mumbai 400004. (Pan: Aaahr1005A) (Appellant) (Respondent) Present For: Assessee : Shri Umang Shah, Ca Revenue : Shri R.R. Makwana, Addl. Cit Date Of Hearing : 23.01.2025 Date Of Pronouncement : 22.04.2025 O R D E R Per Girish Agrawal: These Two Appeals Filed By The Revenue Are In The Case Of An Individual & Huf Against The Order Of Ld. Cit(A), National Faceless Appeal Centre (Nfac) Delhi, Vide Order No. Itba/Nfac/S/250/2023- Ay 2017-18 24/1060184522(1) Dated 29.01.2024 For Individual & Order No. Itba/Nfac/S/250/2024-25/1064573907(1), Dated 02.05.2024 For The Huf, Passed Against The Assessment Orders By Income Tax Officer 19(3)(1), Mumbai U/S. 144 R.W.S 147 Of The Income-Tax Act (Hereinafter Referred To As The “Act”), Dated 29.05.2023 & 21.04.2023, Respectively For Individual & Huf For Assessment Year 2017-18. 2. Appeal In Ita No. 1486/Mum/2024 Is By The Individual & That In Ita No. 3374/Mum/2024 Is By The Huf With The Present Individual As Its Karta. Common Issue Is Involved In Both The Appeals By The Revenue, Raising Identical Grounds Except For Variation In The Quantum Of Addition Made By The Ld. Assessing Officer. Accordingly, Grounds Taken By The Revenue In The Case Of Individual In Ita No. 1486/Mum/2024 Are Reproduced As Under:

For Appellant: Shri Umang Shah, CAFor Respondent: Shri R.R. Makwana, Addl. CIT

Section 10Section 10(38)Section 144Section 68

exception provided in the CBDT's Circular No. 23/2019 Dated. 06.09.2019, the assessee is involved in trading of penny stocks script and claimed bogus LTCG on sale of penny stock." 10. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary

ACIT-24(1), Mumbai vs. Dipti Sureshchandra Bajaj, Mumbai

In the result, both the appeals of the Revenue are dismissed

ITA 3769/MUM/2024[2014]Status: DisposedITAT Mumbai21 Apr 2025

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 10(38)Section 143(3)Section 147Section 148Section 14A

this case, the information has been uploaded that the assessee has done the high volume/value transactions i.e. Fictitious Profits in Equity/Derivative Trading and bogus LTCG U/S 10(38) /and STCL cases in the shares of M/S ASHLAR SECURITIES PVT.LTD. - AAHCA9621P. 2. The information value of total transactions ... been found and proved by the SEBI and Investigation that the scrip has been used by the broker and the syndicate members for providing bogus LTCG and loss to the beneficiaries by inflating the share price through doctored transactions made between the syndicate members. The taxpayer

ACIT-24(1), Mumbai vs. Dipti Sureshchandra Bajaj, Mumbai

In the result, both the appeals of the Revenue are dismissed

ITA 3767/MUM/2024[2015-16]Status: DisposedITAT Mumbai21 Apr 2025AY 2015-16

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 10(38)Section 143(3)Section 147Section 148Section 14A

Brijmohan Prasad Gupta, Kanker vs. ITO, Ward- Jagdalpur, Jagdalpur

In the result, appeal of the assessee is allowed for statistical purposes

ITA 42/RPR/2025[2013-14]Status: DisposedITAT Raipur09 Apr 2025AY 2013-14

Bench: Shri Partha Sarathi Chaudhuryआयकर अपील सं./Ita No.42/Rpr/2025 "नधा"रण वष" /Assessment Year : 2013-14 Brijmohan Prasad Gupta Janakpur Ward, Tikrapara, Kanker (C.G.)-494 334 Pan: Adbpg3007B

For Appellant: Shri Sunil Kumar Agrawal, CAFor Respondent: Dr. Priyanka Patel, Sr. DR

Section 10(38)Section 68

above, Long Term Capital Gain claimed of Rs.40,51,063/- on sale of shares of M/s Quest financial services Ltd. is treated as bogus LTCG and added in the income of the assessee u/s.68 of the I.T. Act, 1961.” 3. On appeal before the first appellate authority ... carefully considered the facts on record and submissions of the parties herein. The addition had been made u/s.68 of the Act on account of bogus LTCG claimed by the assessee and as per facts of the case emanating from the assessment order, the assessee had acquired 550 shares of M/s.Dristi

Vipin Jain & Sons HUF, Delhi vs. ITO, Ward- 56(2), New Delhi

In the result, the appeal filed by the assessee is allowed

ITA 910/DEL/2019[2015-16]Status: DisposedITAT Delhi09 Apr 2025AY 2015-16

Bench: Shris.Rifaur Rahman & Ms. Madhumita Royvipin Jain & Sons Huf, Vs. Ito, Ward 56 (2), C/O Akhilesh Kumar, Advocate New Delhi. 206 -207, Ansal Satyam, Rdc, Ghaziabad – 201 002 (Uttar Pradesh). (Pan : Aadhv8042G) (Appellant) (Respondent) Assessee By : Shri Rohit Tiwari, Advocate Ms. Tanya, Advocate Revenue By : Ms. Harpreet Kaur Hansra, Sr. Dr Date Of Hearing : 11.02.2025 Date Of Order : 09.04.2025 O R D E R Per S. Rifaur Rahman: 1. The Assessee Has Filed Appeal Against The Order Of The Learned Commissioner Of Income Tax (Appeals)-19, New Delhi[“Ld. Cit(A)”, For Short] Dated 12.12.2018 For The Assessment Year 2015-16 Raising Following Grounds Of Appeal :- “1. Because The Order Of Learned Lower Authority Is Bad In Law & Against The Facts & Circumstances Of The Case & Hence Is Unsustainable. 2. Because Ld. Cit (A) Grossly Erred In Law In Sustaining The Addition Of Rs.4,27,01,703/-, Being Total Sale Consideration Of Shares U/S 68 Of The Act While Said Amount Is Neither Credited To Books Of Account In The Absence Of Any Accounts Nor Source Of Said Amount Is Under Doubt, Hence Addition Is Beyond The Scope Of Provision.

For Appellant: Shri Rohit Tiwari, AdvocateFor Respondent: Ms. Harpreet Kaur Hansra, Sr. DR

Section 10Section 10(38)Section 143(2)Section 68

purchased the shares of Alps Motors Finance Limited were run by him and have been used to provide accommodation entry for bogus LTCG. Entirely based or this statement, the assessee’s Long term capital gain has been disbelieved and added under section 68 of the Act. Such a statement first ... Department in Kolkata, Delhi, Mumbai and Ahmedabad on penny stocks, which sets out the modus operandi adopted in the business of providing entries of bogus LTCG. However, the reliance placed on the report, without further corroboration on the basis of cogent material, does not justify his conclusion that the transaction

ITO Ward 4(1)(1), Mumbai vs. Fairdeal Infin Services Private Limited, Mumbai

Appeal of the Revenue is dismissed

ITA 5833/MUM/2024[2015-16]Status: DisposedITAT Mumbai07 Apr 2025AY 2015-16

Bench: Shri Narender Kumar Choudhry

For Respondent: Ms. Kavitha Kaushik (Sr. DR)

Section 143(3)Section 69C

IN THE INCOME-TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER SHRI PRABHASH SHANKAR, ACCOUNTANT

Income Tax Officer -19(2)(2), Mumbai vs. Mitesh Mehta HUF, Mumbai

In the result, appeal of the revenue is dismissed

ITA 2280/MUM/2024[2015]Status: DisposedITAT Mumbai07 Apr 2025

Bench: Shri Saktijit Dey & Shri Girish Agrawalassessment Year: 2015-16

For Appellant: Shri Mitesh Mehta, CAFor Respondent: Shri R. R. Makwana, Addl. CIT

Section 143(3)Section 68Section 69

under the exception provided in the CBDTs Circular No. 23/2019 Dated. 06.09.2019, the assessee is involved in trading of penny stocks script and claimed bogus LTCG on sale of penny stock.” 3. Brief facts of the case are that, assessee is a HUF and its karta is a practicing Chartered ... market and the name of script M/s GCM Securities Limited is appearing in the list of penny stock, which has been used for generating bogus LTCG as stated in the said report The said SCN also stated that Statements of Shri Alok Kumar Das (Operator), Shri. Ashish Kumar Agarwal (Exit

Praksh Pushparaj Golcha, Andheri (W) vs. Commissioner of Income-Tax (Appeals), NFAC, Delhi

In the result, the appeal is allowed for statistical purposes

ITA 4417/MUM/2023[2011-12]Status: DisposedITAT Mumbai07 Apr 2025AY 2011-12

Bench: Shri Narender Kumar Choudhry & Shri Prabhash Shankarpraksh Pushparaj Golcha, V/S. Assistant Commissioner Of 6A, Shivkrupa H Wing, बनाम Income Tax– 24(3), Old Nagardas Road, M/O Finance, Income Tax Andheri(W), Department, National Faceless Mumbai-400 069, Appeal Centre(Nfac), Delhi Maharashtra स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aabpg9404H Appellant/अपीलार्थी .. Respondent/प्रतिवादी

For Appellant: Mr.Ruturaj H. Gurjar,ARFor Respondent: Shri Mahesh Pamnani,(Sr. DR)

Section 143(3)Section 148Section 250Section 68Section 69C

Exchange.The AO did not provide any statement proving that the promoters of the company had admitted that the share prices were rigged for proving bogus LTCG, nor he provided with any statement mentioning that the assessee was involved in this operation. No opportunity to cross examine the promoters

DCIT, Central Circle-1, Jaipur vs. Vidhushi Kothari, Jaipur

ITA 1032/JPR/2024[2015]Status: DisposedITAT Jaipur04 Apr 2025

For Appellant: Shri P.C. Parwal, CAFor Respondent: Mrs. Anita Rinesh, JCIT

Section 132Section 142(1)Section 143(2)Section 143(3)Section 153ASection 250Section 68Section 69C

आयकर अपीलीय अधिकरण, जयपुर न्यायपीठ, जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR डा० एस. सीतालक्ष्मी, न्यायिक

Dy. Commissioner of Income Tax Central Circle-1(1), Nagpur vs. Shri Sanjay Gaurishankar Agrawal, Nagpur

ITA 109/NAG/2019[2014-15]Status: DisposedITAT Nagpur03 Apr 2025AY 2014-15

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Kapil HiraniFor Respondent: Shri Sandipkumar Salunke

Section 10(38)Section 68

search operation, which had incriminating value. During the assessment proceedings, more information was collected, which was marshaled to arrive at logical end. 2. Bogus LTCG Claim (Penny Stock) During the assessment proceedings, it was noticed that assessee had declared long term capital gains of Rs.94,60,989/- and claimed ... case of the assessee, it was found that certain exit operators have admitted that they were involved in the activity of giving bogus LTCG through different paper companies and that they have used the scrip viz. Essar (India) Ltd. for the purpose of giving such bogus entries to the desired

Anju Daruka, Burdwan vs. ITO, Ward - 3(1), Asansol

In the result, the appeal of the assessee is allowed

ITA 2143/KOL/2024[2013-14]Status: HeardITAT Kolkata01 Apr 2025AY 2013-14

Bench: Shri Rajesh Kumar, Am & Shri Pradip Kumar Choubey, Jm

For Appellant: S/Shri Somnath Ghosh &For Respondent: Shri Sailen Samadder, DR

Section 04Section 143(1)Section 147Section 148Section 148(2)Section 69A

companies, sham transactions along with statement of related persons in the scheme it emerges that the assessee has taken accommodation entry of pre-arranged bogus LTCG of around to Rs.11,87,522/- during the F.Y.2012-13 in the scrip of "BSR FINANCE & CONSTRUCTION LIMITED." (iv) Show cause notice for initiation

Income Tax Officer, Income Tax vs. Rachana Suresh Chokhani, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 5986/MUM/2024[2016]Status: DisposedITAT Mumbai28 Mar 2025

Bench: Shri Saktijit Dey, Hon’Ble & Shri Girish Agrawalassessment Year: 2016-17

For Appellant: NoneFor Respondent: Shri R.R. Makwana, Addl. CIT

Section 147Section 55Section 68

been fully accounted for in the appellant's return of income. The AO's conclusion that the appellant's transactions were part of a bogus LTCG scheme lacks substantive evidence. The AO relied solely on generalized information from the Insight Portal without considering the specific facts of the appellant

Ambaji Avenues Private Limited, Mumbai vs. Income Tax Officer, Ward - 9(1) (2), Mumbai

In the result, the appeal filed by the Assessee is allowed

ITA 5216/MUM/2024[2012-13]Status: DisposedITAT Mumbai28 Mar 2025AY 2012-13

Bench: Shri Narender Kumar Choudhryassessment Year: 2012-13

For Appellant: Shri Ramesh Malpani, Ld. A.RFor Respondent: Shri Kiran Unavekar, Ld. Sr. D.R

Section 133(6)Section 142(1)Section 143(1)Section 147Section 148Section 250Section 68

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “SMC”, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER Assessment Year: 2012

DCIT-CC-4(3), Mumbai vs. Krishan Raghunath Prasad Khadaria, Mumbai

In the result, the appeal filed by the assessee is allowed for statistical purpose

ITA 3572/MUM/2023[2011-12]Status: DisposedITAT Mumbai28 Mar 2025AY 2011-12

Bench: Ms. Kavitha Rajagopal, Jm & Smt. Renu Jauhri, Am

For Appellant: Shri. Ashok Bansal, CA a/w. ShriFor Respondent: Shri. Biswanath Das – CIT DR

Section 153ASection 250

found in the course of search action on the appellant did not support the allegation that he was indulged in providing accommodation entries of bogus LTCG by manipulating scrips of companies under his control and earning commission therefrom and, therefore, the said material did not trigger assessment u/s 153A ... assessment order is that Shri Raj Kumar Kedia is the person who managed & controlled share prices of some companies for reaping bogus LTCG including the companies under the control & management of the appellant and nowhere it is stated that the appellant was involved in rigging the prices of shares