“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

The Assistant Commissioner of Income Tax, Circle-1(1), Visakhaptnam vs. Mattapalli Ramgopal, Visakhapatnam

In the result, appeals of the revenue are dismissed

ITA 65/VIZ/2021[2014-15]Status: DisposedITAT Visakhapatnam29 Mar 2023AY 2014-15

Bench: Shri Duvvuru Rl Reddy, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकर अपील सं./I.T.A.No.65/Viz/2021 & 66/Viz/2021 (निर्धारण वर्ा / Assessment Year : 2014-15 & 2015-16) Asst.Commissioner Of Income Tax Vs. Mattapalli Ramgopal Circle-1(1) 25-8-246, Main Road Visakhapatnam Kurupam Market Visakhapatnam [Pan : Aarpw2133K] (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)

For Appellant: Shri I.Kama Sastry, ARFor Respondent: Shri O.N.Hari Prasada Rao, DR

Section 133ASection 143(1)Section 143(2)Section 68

Officer [2019] 112 taxmann.com 330 (SC)[2020] / 268 Taxman 320 (SC) / [2019] 112 taxmann.com 329 (Delhi) that have confirmed the additions based on bogus LTCG before deleting the addition of Rs.58,47,609/- in the instant case. 6. The appellant craves leave to add or delete or amend or substitute ... these and other grounds that may be urged at the time of appeal hearing, it is prayed that all these above additions made on bogus LTCG be restored. 3. At the outset, the Ld.Counsel for the assessee has brought to our notice that the appeal filed by the revenue

ACIT, Central Circle-13, New Delhi vs. Deepak Agarwal, Delhi

In the result, all the three appeals of the Revenue in ITA Nos

ITA 8796/DEL/2019[2012-13]Status: DisposedITAT Delhi17 Mar 2023AY 2012-13

Bench: Shri Shamim Yahya & Ms. Astha Chandra

For Appellant: Shri Kapil Goel, AdvFor Respondent: Shri T. James Singson. CIT- DR

Section 268A

involved in organized tax evasion activity. Exception by way of the special order issued by the CBDT is in respect of assessee’s claiming bogus LTCG/ STCL through penny stocks. It is an admitted fact that the subject matter of the assessee’s appeal in all the stocks and hence

ACIT, Central Circle-13, New Delhi vs. Deepak Agarwal, Delhi

In the result, all the three appeals of the Revenue in ITA Nos

ITA 8795/DEL/2019[2011-12]Status: DisposedITAT Delhi17 Mar 2023AY 2011-12

Bench: Shri Shamim Yahya & Ms. Astha Chandra

For Appellant: Shri Kapil Goel, AdvFor Respondent: Shri T. James Singson. CIT- DR

Section 268A

ACIT, Central Circle-13, New Delhi vs. Deepak Agarwal, Delhi

In the result, all the three appeals of the Revenue in ITA Nos

ITA 8794/DEL/2019[2010-11]Status: DisposedITAT Delhi17 Mar 2023AY 2010-11

Bench: Shri Shamim Yahya & Ms. Astha Chandra

For Appellant: Shri Kapil Goel, AdvFor Respondent: Shri T. James Singson. CIT- DR

Section 268A

Jatin Garg & Sons (HUF), New Delhi vs. ITO, Ward-36(5), New Delhi

Appeal of the assessee is dismissed

ITA 5652/DEL/2018[2015-16]Status: DisposedITAT Delhi07 Mar 2023AY 2015-16

Bench: Shri Kul Bharat

Section 143(2)Section 68

dated 31/05/2018 are bad in law in as much as addition of Rs 500,123 (break up : addition u/s 68 on a/c of bogus LTCG Rs 500,123) is made violating principles of natural justice and on basis of vague and generalized show cause notice (05/12/2017) without confronting any back

Babita Goyal, Haryana vs. ITO, Ward -1, Rohtak

In the result, the appeal of the assessee is dismissed

ITA 1211/DEL/2022[2011-12]Status: DisposedITAT Delhi27 Feb 2023AY 2011-12

Bench: Shri Kul Bharat[Assessment Year : 2011-12] Babita Goyal, Vs Ito, Dayal Bhawan Meham, Rohtak, Ward-I, Haryana-124112 Rohtak. Pan-Aglpg1864F Appellant Respondent Appellant By Ms.Rano Jain, Adv. & Ms. Mansi Jain, Ca Respondent By Shri Sanjay Nargas, Sr.Dr Date Of Hearing 15.02.2023 Date Of Pronouncement 27.02.2023

Section 10(38)Section 143(3)Section 147

finding on fact by observing that the assessee is one of the beneficials who has taken entry during the relevant Assessment Year and earned bogus LTCG. This finding of the AO is not rebutted by the assessee by placing any contrary material on record. Looking to the totality

Smt. Meena Agrawal, Bharatpur vs. ITO WD-1, Bhartapur

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

ITA 447/JPR/2022[2012-13]Status: DisposedITAT Jaipur20 Feb 2023AY 2012-13

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Rajendra Agrawal, CAFor Respondent: Mrs. MonishaChoudhary, Addl. CIT-DR

Section 10(38)Section 148(2)

erred in dismissing the ground of appeal that the AO erred in making huge addition of Rs.6,12,367/- stating bogus LTCG SMT. MEENA AGARWAL VS ITO, WARD -1, BHARATPUR claimed u/s 10(38) in the ROI held to be income from undisclosed sources.’’ 2.1 Apropos Ground ... assessee as to reopening the assessment made by the AO and also not justified in confirming the addition of Rs.6,12,367/- treating bogus LTCG claimed u/s 10(38) of the Act by the assessee from undisclosed sources. To this effect, the ld. AR of the assessee filed a detailed

ACIT, Circle-28(1), New Delhi vs. Anju Jain, New Delhi

The appeal of the Revenue is dismissed

ITA 7623/DEL/2018[2015-16]Status: DisposedITAT Delhi17 Feb 2023AY 2015-16

Bench: Shri Pradip Kumar Kedia & Shri Yogesh Kumar Us

For Appellant: Shri Kanv Bali, Sr.DRFor Respondent: Shri Suresh Kumar Gupta, CA

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

stocks ranges generally from 1 to 2 years and that too depending upon the price movement of the stock. In the modus operandi of bogus LTCG in penny stocks discussed by the AO also the holding period of such shares- has been mentioned as 1-2 years. In this case ... examined in that context. Considering the above facts, it appears that the case of the appellant is different from the modus operandi of bogus LTCG in penny stocks adopted by the accommodation entry providers. The most distinguishing feature in the case is the period of holding by the appellant

ACIT, Circle- 30(1), New Delhi vs. Umesh Kumar Arora, New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 4043/DEL/2018[2014-15]Status: DisposedITAT Delhi20 Jan 2023AY 2014-15

Bench: Shri Shamim Yahya & Ms. Astha Chandraassessment Year: 2014-15 Vs. Acit, M/S. Umesh Kumar Arora, Circle-30(1), C-15, Greater Kailash Enclave-1, New Delhi Delhi-1100 48 Pan Aaapa4832A Pan :Aaapa4832A (Appellant) (Respondent)

Section 10(38)Section 143(3)Section 68Section 69C

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘B’ NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND MS. ASTHA

Gaurav Singhal, New Delhi vs. ITO, Ward-17(4), New Delhi

ITA 576/DEL/2019[2010-11]Status: DisposedITAT Delhi18 Jan 2023AY 2010-11

Bench: Sh. Pradip Kumar Kedia & Sh. Anubhav Sharmagaurav Singhal Vs. Ito, 149, Tarun Enclave, Ward-17(4), Pitampura, C.R.Building, New Delhi-110034 New Delhi-110002 Pan : Aohps3787D (Appellant) (Respondent)

Section 10(38)Section 143(2)Section 147Section 148Section 68

Kolkata that Ashok Kumar Kayan and Sunil Kumar Kayan were share brokers at the CSE and BSE and were involved in providing bogus LTCG through penny stocks. A survey was conducted in the premise of Ashok Kumar Kayan and its was found he was involved in providing accommodation entry ... Pr.DIT (Inv) Kolkata that Ashok Kumar Kayan and Sunil Kumar Kayan were share brokers at the CSE and BSE and was involved in providing bogus LTCG through penny stocks. A survey was conducted in the premise of Ashok Kumar Kayan and it was found he was involved in providing accommodation

Mahesh Kumar Agrawal HUF, Bhartpur vs. ITO, Bhartpur

In the result, the ground no

ITA 250/JPR/2022[2012-13]Status: DisposedITAT Jaipur11 Jan 2023AY 2012-13

Bench: Hon’ble SHRI SANDEEP GOSAIN (Judicial Member)

For Appellant: Shri Rajendra Agarwal, CAFor Respondent: Mrs. Monisha Choudhary, JCIT

Section 10(35)Section 10(38)Section 147oSection 148

erred in dismissing the ground of appeal that the ld. AO erred in making huge addition of Rs.6,12,367/- stating bogus LTCG claimed u/s 10(38) in the ROI held to be income from undisclosed sources.’’ 2.1 Apropos Ground No. 1 and 2 of the assessee, the facts ... onus to prove. But the Ld.AO arbitrarily disallowed the claim of the assessee and made a very huge addition of Rs.6,12,367/- stating bogus LTCG claimed u/s 10(38) in the return of income held to be income from other sources without any congent evidence, inquiry, investigation or information

Smt. Manju Agrawal, Bhartpur vs. ITO, Bhartpur

In the result, the ground no

ITA 249/JPR/2022[2012-13]Status: DisposedITAT Jaipur11 Jan 2023AY 2012-13

Bench: Hon’ble SHRI SANDEEP GOSAIN (Judicial Member)

For Appellant: Shri Rajendra Agarwal, CAFor Respondent: Mrs. Monisha Choudhary, JCIT

Section 10(38)

erred in dismissing the ground of appeal that the ld. AO erred in making huge addition of Rs.6,12,367/- stating bogus LTCG claimed u/s 10(38) in the ROI held to be income from undisclosed sources.’’ 2.1 Apropos Ground No. 1 and 2 of the assessee, the facts ... onus to prove. But the Ld.AO arbitrarily disallowed the claim of the assessee and made a very huge addition of Rs.6,12,900/- stating bogus LTCG claimed u/s 10(38) in the return of income held to be income from other sources without any congent evidence, inquiry, investigation or information

Vipinlumar Sanklecha, Mumbai vs. ITO Ward 16 (3)(5), Mumbai

In the result, the appeal of the assessee is allowed

ITA 6612/MUM/2019[2011-12]Status: DisposedITAT Mumbai29 Dec 2022AY 2011-12

Bench: Shri Aby T. Varkey, Jm आयकर अपील सं/ I.T.A. No.6612/Mum/2019 (निर्धारण वर्ा / Assessment Years: 2011-12) Vipinkumar Sanklecha बिधम/ Ito, Ward-16(3)(5) Room No. 447, 4Th Floor, A/303, Bhattad Tower, Opp. Vs. Kora Kendra Ground, R. M. Aayakar Bhavan, M. K. Bhattad Road, Borivali (W), Road, Mumbai-400020. Mumbai-400092. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aayps5062N (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Ajay Singh Revenue By: Shri Mahender Ahuja सुनवाई की तारीख / Date Of Hearing: 21/11/2022 घोषणा की तारीख /Date Of Pronouncement: 29/12/2022 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Against The Order Of The Ld. Commissioner Of Income Tax (Appeals)-07, Mumbai Dated 02.08.2019 For The Assessment Year 2011-12. 2. At The Outset, The Ld. Ar Drew Our Attention To Ground Nos. 1 & 2 Which Are The Legal Issues Raised By The Assessee Against The Action Of The Ao To Have Reopened The Assessment Without Satisfying The Condition Precedents As Laid Down U/S 147 Of The Income Tax Act, 1961 (Hereinafter “The Act”) As Well As For Not Following The Hon’Ble Supreme Court As Well The Hon’Ble Bombay High Court Decision Cited By Him. The Ground Nos. 1, 2 & 3.1 Reads As Under: - “1. The Id. Cit (A) Erred In Confirming The Reopening Of Assessment Without Appreciating That The Reopening Of The Assessment Is Bad In Law, Invalid & Liable To Be Quashed In As Much As:

For Appellant: Shri Ajay SinghFor Respondent: Shri Mahender Ahuja

Section 143Section 147Section 148Section 68

determination of income. As per information available to this office there has been a transaction to the tune of Rs.15,99,950/- which is bogus LTCG u/s 10(38) of the Income Tax Act, 1961. 10 A.Y. 2011-12 Vipinkumar Sankelecha In view of the above facts, and circumstances ... bogus. According to AO, since there has been transaction made by assessee to the tune of Rs.15,99,950/- which was bogus LTCG claim, it has escaped assessment. So the AO re-opened the assessment by issuance of notice u/s 148 of the Act dated 29.03.2018. 12. When I have

DCIT, CC - 2(4), Mumbai vs. Mishal Nickunj Shah Shri. L/H. of Late Nickunj Gunvantrai Shah, Mumbai

Accordingly, grounds raised by the revenue are dismissed

ITA 2312/MUM/2022[2014-15]Status: DisposedITAT Mumbai28 Dec 2022AY 2014-15

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

For Appellant: Shri Niraj ShethFor Respondent: Shri Rakesh Garg

Section 10(38)Section 132(1)Section 143(1)Section 143(2)Section 143(3)Section 153ASection 68

available with the AO that the assessee had transacted in the shares of penny stock M/s PFL Infotech Limited for the purpose of claiming bogus LTCG and that the assessee was also involved in rigging the price movement of the scrip M/S PFL Infotech Limited.” C.O. Nos. 138, 139 & 140/MUM/2022

DCIT, CC - 2(4), Mumbai vs. Mishal Nickunj Shah Shri. L/H. of Late Nickunj Gunvantrai Shah, Mumbai

Accordingly, grounds raised by the revenue are dismissed

ITA 2311/MUM/2022[2015-16]Status: DisposedITAT Mumbai28 Dec 2022AY 2015-16

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

For Appellant: Shri Niraj ShethFor Respondent: Shri Rakesh Garg

Section 10(38)Section 132(1)Section 143(1)Section 143(2)Section 143(3)Section 153ASection 68

Alpana Sunil Shah, Mumbai vs. The CIT NFAC, Mumbai

In the result, appeal of the assessee is allowed

ITA 2305/MUM/2021[2011-12]Status: DisposedITAT Mumbai22 Dec 2022AY 2011-12

Bench: Shri Aby T. Varkey, Jm आयकर अपील सं/ I.T.A. No.2305/Mum/2021 (निर्धारण वर्ा / Assessment Year: 2011-12) Alpana Sunil Shah बिधम/ Commissioner Of Income 23L/12Th Floor, Navjivan Tax (Appeals) Vs. Commercial Co-Op Society National Faceless Appeal Ltd, Dr. D.B. Marg, Centre (Nfac), Delhi. Mumbai Central, Mumbai- 400008. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaeps9752R (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: None Revenue By: Smt. Nayana K. Kumar सुनवाई की तारीख / Date Of Hearing: 29/11/2022 घोषणा की तारीख /Date Of Pronouncement: 22/12/2022 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Against The Order Of The Ld. Commissioner Of Income Tax/Nfac, Delhi Dated 30.09.2021 For Assessment Year 2011-12. 2. None Appeared For The Assessee. The Main Grievance Of The Assessee Is Against The Action Of The Ld. Cit(A) Confirming The Addition On Account Of Sale Of Shares As Unexplained Money U/S 68 Of The Income Tax Act, 1961 (Hereinafter “The Act”) Of Rs.1,41,761/- & Commission On It To The Tune Of Rs.2,835/-. The Assessee /Alpana Sunil Shah Is Carrying On The Business Of Trading & Investments In Shares, Bonds, Debentures, Securities & Financial Instruments. The Assessee Had E-Filed Its Return Of Income For The Previous Year Ended On March 31, 2011 Relevant To Ay. 2011-12 On March 15, 2012, Declaring

For Appellant: NoneFor Respondent: Smt. Nayana K. Kumar

Section 148Section 68

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI ABY T. VARKEY, JM आयकर अपील सं/ I.T.A. No.2305/Mum/2021

Saytidevi Kantilal Bhandari, Mumbai vs. The ITO - Ward- 19(3)(2), Mumbai

In the result, the appeal of the assessee is allowed

ITA 1734/MUM/2020[2008-09]Status: DisposedITAT Mumbai22 Dec 2022AY 2008-09

Bench: Shri Aby T. Varkey, Jm आयकर अपील सं/ I.T.A. No.1734/Mum/2020 (निर्धारण वर्ा / Assessment Year: 2008-09) Saytidevi Kantilal Bhandari बिधम/ Ito, Ward-19(3)(2) Room No. 224, 2Nd Floor, 162, Tp Street, 6 Vs. Kumbharwada, Mumbai- Matru Mandir, Tardeo 400004. Road, Mumbai-400007. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aghpb9079K (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Sanjiv M. Shah & Rajesh Chamaria Revenue By: Smt. Nayana K. Kumar सुनवाई की तारीख / Date Of Hearing: 01/12/2022 घोषणा की तारीख /Date Of Pronouncement: 22/12/2022 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Against The Order Of The Ld. Commissioner Of Income Tax-30, Mumbai Dated 16.12.2019 For Assessment Year 2008-09. 2. At The Outset, The Assessee Drew Our Attention To The Grounds Of Appeal Wherein He Has Raised The Legal Issue Regarding Validity Of Reopening Of Assessment By Ao U/S 147 Of The Income Tax Act, 1961 (Hereinafter “The Act”).

For Appellant: Shri Sanjiv M. Shah & RajeshFor Respondent: Smt. Nayana K. Kumar

Section 133ASection 143(1)Section 147Section 148

Survey Action u/s. 133A in the case of Shri Kamal Rathi, it was found that the above mentioned assessee was providing accommodation entries for bogus LTCG and STCG to its various clients. This fact has also been accepted by Shri Rathi in his statement recorded under oath during the course ... case of Shri Kamal Kishore Rathi who admitted on oath during the course of survey proceedings that he was providing accommodation entries for bogus LTCG and STCG to various clients beneficiaries. And for providing such accommodation entries, he used to organize bogus, bills for purchase of shares from various companies

Deputy Commissioner of Income Tax, 3(3)(1), Mumbai vs. M/S Jinesh Ashwinkumar Matalia, Mumbai

In the result, the appeals of the revenue i

ITA 1324/MUM/2022[2015-2016]Status: DisposedITAT Mumbai16 Dec 2022AY 2015-2016

Bench: Shri Amarjit Singh & Ms. Kavitha Rajagopal

For Appellant: Shailesh ParmarFor Respondent: Hemantkumar Chimanlal

Section 132Section 153CSection 69C

ITA Nos. 132 to1324/Mum/2022 & C.O. 117 to 120/Mum/2022 1 Deputy Commissioner of Income Tax-3(3)(1) Vs. M/s Jinesh

Deputy Commissioner of Income Tax, 3(3)(1)., Mumbai vs. M/S Jinesh Ashwingkumar Matalia, Mumbai

In the result, the appeals of the revenue i

ITA 1321/MUM/2022[2011-2012]Status: DisposedITAT Mumbai16 Dec 2022AY 2011-2012

Bench: Shri Amarjit Singh & Ms. Kavitha Rajagopal

For Appellant: Shailesh ParmarFor Respondent: Hemantkumar Chimanlal

Section 132Section 153CSection 69C

ITA Nos. 132 to1324/Mum/2022 & C.O. 117 to 120/Mum/2022 1 Deputy Commissioner of Income Tax-3(3)(1) Vs. M/s Jinesh

Shri Pravin C. Bokadia, Mumbai vs. The Income Tax Officer, Ward-19(2)(5), Mumbai

In the result , the appeal of the assessee is allowed

ITA 736/MUM/2022[2015-16]Status: DisposedITAT Mumbai13 Dec 2022AY 2015-16

Section 10(38)Section 143(1)

providers were hand in glove with each other and claimed that shares of Shree Shaleen Textiles Ltd have been used for providing entry of bogus LTCG / STCG. The assessee had objected to this as to how the name of Shree Shaleen Textiles Ltd is observed by the ld. AO which