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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

Jhaveri Trading and Investment Pvt.Ltd., Ahmedabad vs. The DCIT, Cent. Cir. 1(1), Ahmedabad

In the result, the appeal of the assessee is hereby allowed

ITA 399/AHD/2023[2010-11]Status: DisposedITAT Ahmedabad13 Jun 2024AY 2010-11

Bench: Shri Waseem Ahmed & Shri Tr Senthil Kumarआयकर अपील सं./Ita Nos. 401 To 403/Ahd/2023 "नधा"रण वष"/Asstt. Years: (2012-2013 To 2014-2015) & आयकर अपील सं./Ita Nos. 399 & 400/Ahd/2023 "नधा"रण वष"/Asstt. Years: (2010-2011 & 2011-12)

For Appellant: Shri Deepak Shah, ARFor Respondent: Shri Sudhendu Das, CIT.DR
Section 132(4)Section 68

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

Piyush Kumar, New Delhi vs. ITO Ward 3(1)(2), Muzaffarnagar

In the result, appeal filed by the assessee is partly

ITA 555/DEL/2024[2013-14]Status: DisposedITAT Delhi12 Jun 2024AY 2013-14

Bench: SHRI S.RIFAUR RAHMAN (Accountant Member), SHRI SUDHIR PAREEK (Judicial Member)

Section 10(38)Section 142Section 148Section 68

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

Naresh Kumar Bhargava, Jaipur vs. Principal Commissioner of Income Tax -1, Jaipur

In the result, appeal of the assessee is allowed

ITA 221/JPR/2024[2013-14]Status: DisposedITAT Jaipur11 Jun 2024AY 2013-14

Bench: The Date Of Hearing.”

For Appellant: Sh. Rohan SoganiFor Respondent: Sh. Anil Dhaka, CIT
Section 132Section 142(1)Section 143(2)Section 147Section 148Section 263

synchronized trading in shares of various listed companies, because it is only through synchronized trading that the sellers are ensured accommodation entry of bogus LTCG against cash and the buyers are ensured delivery of cash against such predetermined purchase of shares. The buyer and seller parties are well planned ... buyer and sale proceeds of shares are assured in the bank account linked with the demat account of seller. There is conclusive evidence of bogus LTCG through synchronized trading was found in this search. Further these evidences, revealed that the assessee is a beneficiary of bogus LTCG by making transactions

Vicky Rajesh Jhaveri, Ahmedabad vs. The DCIT, Cent. Cir. 1(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 428/AHD/2023[2012-13]Status: DisposedITAT Ahmedabad10 Jun 2024AY 2012-13

Bench: Shri Waseem Ahmed & Ms. Madhumita Roy

For Appellant: Shri Deepak R Shah, A.RFor Respondent: Shri Atul Pandey, C.I.T DR
Section 132(4)

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

Vicky Rajesh Jhaveri, Ahmedabad vs. The DCIT, Cent. Cir. 1(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 427/AHD/2023[2011-12]Status: DisposedITAT Ahmedabad10 Jun 2024AY 2011-12

Bench: Shri Waseem Ahmed & Ms. Madhumita Roy

For Appellant: Shri Deepak R Shah, A.RFor Respondent: Shri Atul Pandey, C.I.T DR
Section 132(4)

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

Vicky Rajesh Jhaveri, Ahmedabad vs. The DCIT, Cent. Cir. 1(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 426/AHD/2023[2010-11]Status: DisposedITAT Ahmedabad10 Jun 2024AY 2010-11

Bench: Shri Waseem Ahmed & Ms. Madhumita Roy

For Appellant: Shri Deepak R Shah, A.RFor Respondent: Shri Atul Pandey, C.I.T DR
Section 132(4)

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

Sagar Rajesh Jhaveri, Ahmedabad vs. The DCIT, Cent. Cir. 1(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 425/AHD/2023[2012-13]Status: DisposedITAT Ahmedabad10 Jun 2024AY 2012-13

Bench: Shri Waseem Ahmed & Ms. Madhumita Roy

For Appellant: Shri Deepak R Shah, A.RFor Respondent: Shri Atul Pandey, C.I.T DR
Section 132(4)

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

Sagar Rajesh Jhaveri, Ahmedabad vs. The DCIT, Cent. Cir. 1(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 424/AHD/2023[2011-12]Status: DisposedITAT Ahmedabad10 Jun 2024AY 2011-12

Bench: Shri Waseem Ahmed & Ms. Madhumita Roy

For Appellant: Shri Deepak R Shah, A.RFor Respondent: Shri Atul Pandey, C.I.T DR
Section 132(4)

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

Sagar Rajesh Jhaveri, Ahmedabad vs. The DCIT, Cent. Cir. 1(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 423/AHD/2023[2010-11]Status: DisposedITAT Ahmedabad10 Jun 2024AY 2010-11

Bench: Shri Waseem Ahmed & Ms. Madhumita Roy

For Appellant: Shri Deepak R Shah, A.RFor Respondent: Shri Atul Pandey, C.I.T DR
Section 132(4)

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

Jainco Transmission Ltd., Kolkata vs. DCIT, Cir. 11(1), Kolkata

In the result, the appeal of the assessee is allowed

ITA 410/KOL/2024[2011-12]Status: DisposedITAT Kolkata07 Jun 2024AY 2011-12

Bench: Shri Rajpal Yadav, Vice-(Kz) & Dr. Manish Boradi.T.A. No. 410/Kol/2024 Assessment Year: 2011-2012 Jainco Transmission Limited,…………………Appellant 70, Diamond Harbour Road, 3Rd Floor, Ekbalpore, Kolkata-700023 [Pan:Aabcj7859G] -Vs.- Deputy Commissioner Of Income Tax,.....…Respondent Circle-11(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances By: Shri Miraj D. Shah, A.R., Appeared On Behalf Of The Assessee Shri P.P. Barman, Sr. D.R. Appeared On Behalf Of The Revenue Date Of Concluding The Hearing : May 15, 2024 Date Of Pronouncing The Order : June 07, 2024 O R D E R

Section 143(1)Section 148Section 68

ITA No. 410/KOL/2024 (A.Y. 2011-2012) Jainco Transmission Limited THE INCOME TAX APPELLATE TRIBUNAL, ‘B’ BENCH, KOLKATA Before Shri Rajpal

Vipul Kumar Modi, Jaipur vs. Principal Commissioner of Income Tax, Jaipur -I

In the result, appeal of the assessee is allowed

ITA 310/JPR/2024[2016-2017]Status: DisposedITAT Jaipur03 Jun 2024AY 2016-2017

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Sidharth Ranka &For Respondent: Shri Anil Dhaka (CIT) a
Section 142(1)Section 143(1)Section 147Section 263

Mumbai. As per the information it has been found that the assessee has introduced his own unaccounted funds through the colour of bogus LTCG 3 Vipul Kumar Modi vs. PCIT entry, by trading in penny scrip of M/s Goenka Business and Finance Limited & Ejected Marketing Ltd. The assessee ... examine the issue of bogus long term capital gain properly and failed to make inquires / investigation which was required to be considered and the bogus LTCG claimed was required to be added to the total income of the assessee. Based on this primary observation the ld. PCIT initiated the proceeding

Agrasen Primses Private Limited, Jaipur vs. ITO Ward 5(1), Jaipur

ITA 125/JPR/2023[2014-15]Status: DisposedITAT Jaipur30 May 2024AY 2014-15
For Appellant: Ms. Parba Rana (Adv.)&For Respondent: Shri A.S. Nehra (CIT)
Section 133ASection 142(1)Section 143(2)Section 143(3)

country. During the searches & as per the information made public by the SEBI, it is discovered that various syndicates have arranged accommodation entry of bogus LTCG, Bogus STCG, Bogus Long/short term Capital Loss through trading of shares of Penny Stocks. The modus operandi found is that the investors/beneficiaries hold these ... search and survey operations money trail from cash deposit to beneficiary via share broker was established and various operators confessed their role in bogus LTCG scam. h. Bogus entry of long term capital gain which was exempt is provided to thepersons who wanted to convert their unaccounted cash into accounted

Shaily Prince Goyal, Mumbai vs. Income Tax Officer-27(3)(1), Navi Mumbai

In the result, the appeal of the assessee Shri Yogesh Popatlal Thakkar in ITA No

ITA 4271/MUM/2023[2013-14]Status: DisposedITAT Mumbai30 May 2024AY 2013-14
For Appellant: Dr. K Shivaram Sr. Advocate & Shashi BekalFor Respondent: Ms. Sujatha Iyangar SR AR
Section 10(38)Section 143(3)Section 148Section 250Section 68Section 69C

genuine investment decision. The price rigging was achieved by the bogus entry operators through manipulation. 15.5 Commission payment for accommodation entry of bogus LTCG 15.5.1 As it has been discussed in detail in this assessment order as to how the assessee invested in nondescript listed companies having such meager financials ... only logical to assume that the assessee must have also paid commission to the accommodation entry providers for arranging the accommodation entry of bogus LTCG. As it has been admitted on oath by various accommodation entry providers that for accommodation entries in the nature of LTCG they charge commission ranging

Suresh Maheshwari HUF, Mumbai vs. Dy. Commissioner on Income-Tax-25(1), Mumbai

In the result, the appeal is allowed

ITA 3904/MUM/2023[2014-15]Status: DisposedITAT Mumbai29 May 2024AY 2014-15

Bench: Shri Narender Kumar Choudhry & Shri Ratnesh Nandan Sahayassessment Year: 2014-15 M/S. Suresh Maheshwari Huf Dy. Commissioner Of 431, Akshay Girikunj, Income –Tax-25(1), Bldg.- 3, Parliament Road, Vs. Room No. 206, 2Nd Floor, Matru Mandir, Andheri (West) – 400058. Andheri Railway Station S.O. Tardeo Road, Pan: Aabhs3934A Mumbai- 400007. (Appellant) (Respondent) Present For: Assessee By : Shri Rajesh Shah, C.A. Revenue By : Shri Prashant Mahajan, Sr. D.R. Date Of Hearing : 07 . 05 . 2024 Date Of Pronouncement : 29 . 05 . 2024 O R D E R Per : Ratnesh Nandan Sahay: 1. These Appeals Have Been Filed By The Appellant Against The Order Of The Ld. Cit (Appeals) Passed U/S. 250 Of The Income Tax Act [The „Act‟ In Short] Dated 21/09/2023 For The Assessment Year 2014-15. 2. The Following Grounds Have Been Raised In Ita No. 3904/M/ 2023:-

For Appellant: Shri Rajesh Shah, C.AFor Respondent: Shri Prashant Mahajan, Sr. D.R
Section 10(38)Section 143(1)Section 148Section 250Section 68Section 69

also added u/s. 69 C of the Income Tax Act as unexplained expenditure on account of commission paid for arranging the entire transactions of bogus LTCG. 6. The Ld. CIT Appeal upheld the order of the assessing officer on the ground that the case was squarely covered by the decision

Suresh Maheshwari HUF, Mumbai vs. Dy. Commissioner on Income-Tax-25(1), Mumbai

In the result, the appeal is allowed

ITA 3903/MUM/2023[2015-16]Status: DisposedITAT Mumbai29 May 2024AY 2015-16

Bench: Shri Narender Kumar Choudhry & Shri Ratnesh Nandan Sahayassessment Year: 2015-16 M/S. Suresh Maheshwari Huf Dy. Commissioner Of 431, Akshay Girikunj, Income –Tax-25(1), Bldg.- 3, Parliament Road, Vs. Room No. 206, 2Nd Floor, Matru Mandir, Andheri (West) – 400058. Andheri Railway Station S.O. Tardeo Road, Pan: Aabhs3934A Mumbai- 400007. (Appellant) (Respondent) Present For: Assessee By : Shri Rajesh Shah, C.A. Revenue By : Shri Prashant Mahajan, Sr. D.R. Date Of Hearing : 07 . 05 . 2024 Date Of Pronouncement : 29 . 05 . 2024 O R D E R Per : Ratnesh Nandan Sahay: 1. These Appeals Have Been Filed By The Appellant Against The Order Of The Ld. Cit (Appeals) Passed U/S. 250 Of The Income Tax Act [The „Act‟ In Short] Dated 21/09/2023 For The Assessment Year 2015-16. 2. The Following Grounds Have Been Raised In Ita No. 3903 Of 2023 Are As Under:

For Appellant: Shri Rajesh Shah, C.AFor Respondent: Shri Prashant Mahajan, Sr. D.R
Section 10(38)Section 143(1)Section 143(2)Section 250Section 68Section 69Section 69C

also added u/s. 69C of the Income Tax Act as unexplained expenditure on account of commission paid for arranging the entire transactions of bogus LTCG. 5. The Ld. CIT Appeal upheld the order of the assessing officer on account of bogus Long Term Capital Gain (LTCG) amounting to Rs.66

Income Tax Officer-42(1)(2), Mumbai, Kautilya Bhawan vs. Dheeraj Babulal Shah, Mumbai

In the result, appeal of the assessee is allowed

ITA 3320/MUM/2023[2012-13]Status: DisposedITAT Mumbai27 May 2024AY 2012-13

Bench: Shri Narender Kumar Choudhry, Judicialmember & Shri Girish Agrawalassessment Year: 2012-13

For Appellant: Shri Rajkumar Singh, CAFor Respondent: Smt. Mahita Nair,Sr. DR
Section 143(3)Section 147Section 148Section 263Section 69Section 69ASection 69C

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIALMEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT

Anil Kumar Aggarwal, New Delhi vs. ITO, Ward-57(3), New Delhi

In the result, appeal of the assessee is dismissed

ITA 1491/DEL/2019[2014-15]Status: DisposedITAT Delhi27 May 2024AY 2014-15

Bench: Shri Challa Nagendra Prasad & Shri M Balaganeshआ.अ.सं/.I.T.A No.1491/Del/2019 िनधा"रणवष"/Assessment Year:2014-15 बनाम Anil Kumar Aggarwal Ito 136, 1St Floor, Surya Niketan, Vs. Ward-57(3), Delhi. Room No.10D, D-Block, Pan No.Acfpa7562C Vikas Bhawan, New Delhi. अपीलाथ" Appellant ""यथ"/Respondent

Section 10Section 10(38)Section 68Section 69C

ITA No.1491/Del/2019 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A” NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER

Bipinbhai Motibhai Patel, Kolkata vs. ITO, Ward-11(1), Kolkata

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

ITA 352/KOL/2024[2013-14]Status: DisposedITAT Kolkata22 May 2024AY 2013-14

Bench: Dr. Manish Borad

Section 133(6)Section 143(1)Section 144Section 147Section 250Section 69

declaring total income of Rs. 5,60,540/- which was processed u/s 143(1) of the Act. Thereafter, based on the information about alleged bogus LTCG from the transaction of trading in alleged penny stock company namely Twenty First Century India Ltd. to the tune

Nalini Kejriwal, Kolkata vs. ITO, Ward-35(2), Kolkata.

In the result, the appeal of the assessee stands allowed

ITA 672/KOL/2023[2015-16]Status: DisposedITAT Kolkata20 May 2024AY 2015-16

Bench: Shri Sanjay Garg & Shri Girish Agrawali.T.A. No.672/Kol/2023 Assessment Year : 2015-16 Nalini Kejriwal……..……….….…………............…...……………....Appellant 7, Lyons Range, Dalhousie, Kolkata – 1. [Pan: Ajopk0890K] Vs. Ito, Ward-35(2), Kolkata…….............................................…..…..... Respondent Appearances By: Shri Ravi Tulsiyan, Ar, Appeared On Behalf Of The Appellant. Shri Umakanta Dhrupati, Addl. Cit-Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : March 14, 2024 Date Of Pronouncing The Order : May 20, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 11.05.2023 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit(A)’] U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Assessee In This Appeal Has Taken The Following Grounds Of Appeal: “1A) That, On The Facts & In The Circumstances Of The Case, The Ld. C.I.T.(A) Erred In Confirming The Addition Of Rs. 1,01,98,784/- Being Profit Earned From Sale Of Shares Of M/S. Gcm Securities Ltd. As Unexplained Cash Credit U/S. 68 Of The Act Without Considering The Explanation With Supporting Evidences Filed By The Appellant In A Proper Perspective. B) That, The Ld. C.I.T.(A) Further Erred In Not Considering That Despite Details Provided & The Fact That No Long Term Capital Gain Was Claimed In Respect Of The Impugned Transaction Of Sale Of Shares Of M/S.

Section 250Section 5Section 68Section 69C

Assessing Officer on the assumption that the assessee might have paid some commission to I.T.A. No.672/Kol/2023 Assessment Year : 2015-16 Nalini Kejriwal earn bogus LTCG. This addition, in our view, has been made by the Assessing Officer only on the assumption that the assessee has dealt in penny stock company ... earn bogus LTCG and therefore, the assessee might have paid some commission, which has been estimated by the Assessing Officer at Rs.2,47,898/-. In view of the peculiar facts of this case, since we have not gone into the question as to whether the shares of M/s GCM Securities

M/S Jain Amar Clothing Pvt. Ltd., Ludhiana vs. DCIT, CC-III, Ludhiana

In the result, the ground no

ITA 374/CHANDI/2023[2012-13]Status: DisposedITAT Chandigarh16 May 2024AY 2012-13

Bench: SHRI. AAKASH DEEP JAIN (Vice President), SHRI. VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri Sudhir Sehgal, AdvocateFor Respondent: Shri Rohit Sharma, CIT DR
Section 143(3)Section 153ASection 263Section 68

documents found and seized from the locker were in the knowledge of the Assessing officer and a specific show-cause notice dated 14/09/2017 regarding bogus LTCG has been issued by the AO and considering the submissions of the assessee, the transaction of purchase of the shares of M/s Maple Good