“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

Brij Kishore Sabharwal, Delhi vs. ACIT Central Circle-16, Delhi

In the result, the appeals of the Assessee in ITA Nos

ITA 571/DEL/2022[2013-14]Status: DisposedITAT Delhi24 Oct 2025AY 2013-14

Bench: Shri S. Rifaur Rahman & Shri Yogesh Kumar U.S.Ita No. 572/Del/2022 (A.Y. 2014-15) Ita No. 574/Del/2022 (A.Y. 2016-17) Brij Kishore Sabharwal Vs Assistant Commissioner Of Rra Tax India D-28, South Income Tax, Extension Part-1 Delhi Central Circle-16, Pan: Aaxps6830P Delhi Appellant Respondent Assessee By Dr.Rakesh Gupta, Adv, Sh. Somil Agarwal, Adv (Through Vc) & Sh. Deepesh Garg, Adv Revenue By Sh. Dayainder Singh Sidhu, Cit Dr Date Of Hearing 15/09/2025 Date Of Pronouncement 24/10/2025

Section 132Section 153CSection 153D

said Pankaj Kumar that information contained in the hard disks inventoried Brij Kishore Sabharwal Vs. ACIT relates to activity of providing bogus LTCG entry by the Assessee. Assessment orders came to be passed on 30/12/2018 u/s 153C/143(3) of the Income Tax Act, 1961 ('Act' for short) in respect

M/S Rarity Agencies Limited, Kolkata vs. ITO, Ward 9(1), Kolkata

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

ITA 2341/KOL/2024[2015-16]Status: DisposedITAT Kolkata21 Oct 2025AY 2015-16

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishra

Section 10(38)Section 143(3)Section 250Section 68

appellant and evidences on record. The AO has in detail in the impugned order, describes the modus operandi adopted for the purpose of claiming bogus LTCG. The AO has also established in detail that during the F.Y 2013-14, 2014-15, 2015-16 and 2016-17, Unishire Urban Infra

Sh. Sukhvinder Singh, Kanpur vs. Pr CIT, Central, Kanpur

In the result, both appeals filed by the assessee are allowed for statistical purposes

ITA 190/LKW/2020[2012-13]Status: DisposedITAT Lucknow17 Oct 2025AY 2012-13

Bench: Shri Kul Bharat & Shri Anadee Nath Misshra

For Appellant: Shri Samrat Chandra, C.AFor Respondent: Shri R. K. Agarwal, CIT(DR)

Section 263

Kolkatta and had applied proper and complete application of mind also gave a show cause regarding the allow ability of alleged bogus LTCG. Thus, a complete enquiry of the issue was made and the order was passed after proper and complete application of mind by the learned assessing officer

Raheja Developers Limited, New Delhi vs. DCIT, Central Circle 19, New Delhi

ITA 2284/DEL/2023[2012-13]Status: DisposedITAT Delhi17 Oct 2025AY 2012-13

Bench: Shri Yogesh Kumar U.S. & Shri Manish Agarwali.T.A. No.2283/Del/2023 (A.Y 2011-12) Raheja Developers Limited Vs Acit W4D-204/5, Keshav Kunj, Central Circle-19 Cariappa Marg, Sainik Farms, New Delhi New Delhi, Pan: Aaacr0468E Appellant Respondent I.T.A. No.2284/Del/2023 (A.Y 2012-13) Raheja Developers Limited Vs Acit W4D-204/5, Keshavkunj, Central Circle-19 Cariappa Marg, Sainik Farms, New Delhi New Delhi, Pan: Aaacr0468E Appellant Respondent Assessee By Sh. Neeraj Jain, Ca& Sh. P. K. Mishra, Ca Revenue By Ms.Pooja Swaroop, Cit (Dr) Date Of Hearing 24/07/2025 Date Of Pronouncement 17/10/2025

Section 143(3)Section 147Section 148Section 14ASection 68

1 ITA No. 2283 & 2284/Del/2023 Raheja Developers Ltd. vs. ACIT IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI BENCH ‘B

Raheja Developers Limited, New Delhi vs. ACIT, Central Circle 19, Delhi

ITA 2283/DEL/2023[2011-12]Status: DisposedITAT Delhi17 Oct 2025AY 2011-12

Section 143(3)Section 147Section 148Section 14ASection 68

1 ITA No. 2283 & 2284/Del/2023 Raheja Developers Ltd. vs. ACIT IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI BENCH ‘B

Assistant Commissioner of Income Tax, Central Circle-1(2), Kolkata vs. Somani Services Private Limited, Kolkata

ITA 2220/KOL/2024[2012-13]Status: DisposedITAT Kolkata16 Oct 2025AY 2012-13

Bench: the Hon'ble ITAT, Kolkata.

Section 143(3)Section 147Section 14ASection 250

Cash credits (Reassessment) - Assessment year 2015-16 - Assessing Officer issued reopening notice on ground that assessee had received accommodation entry of bogus LTCG from trading in penny scrip -Tribunal quashed assessment order on ground that Assessing Officer had acted on borrowed satisfaction without recording his own satisfaction - It was noted

Assistant Commissioner of Income Tax, Central Circle-1(2), Kolkata vs. Somani Services Private Limited, Kolkata

ITA 2219/KOL/2024[2012-13]Status: DisposedITAT Kolkata16 Oct 2025AY 2012-13

Bench: the Hon'ble ITAT, Kolkata.

Section 143(3)Section 147Section 14ASection 250

Prabhu Dayal Bhartiya, Patna vs. Dc/Ac Circle-4, Patna

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

ITA 372/PAT/2025[2013-14]Status: DisposedITAT Patna15 Oct 2025AY 2013-14

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishrai.T.A. No.372/Pat/2025 Assessment Year: 2013-14 Prabhu Dayal Bhartiya (Huf)….………. …………………....Appellant 701, Shanti Kunj, Chajjubagh, Patna, Bihar- 800001.. [Pan: Aachp7738Q] Vs. Dc/Ac, Circle-4, Patna…....…..……………..………………….…..... Respondent Appearances By: None Appeared On Behalf Of The Appellant. Shri Ashwani Kr. Singal, Jcit, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : October 14, 2025 Date Of Pronouncing The Order : October 15, 2025 आदेश / Order Per Sonjoy Sarma: This Appeal Is Directed By The Assessee Against The Order Dated 16.07.2025 Passed By The Nfac Under Section 250 Of The Income-Tax Act, 1961. 2. Brief Facts Of The Case Are That The Assessee, A Hindu Undivided Family (Huf), Filed Its Return Of Income For The Assessment Year 2013– 14 Declaring A Total Income Of ₹6,120/-. The Case Was Reopened Under Section 147 Of The Income-Tax Act, 1961 On The Basis Of Information Received From The Investigation Wing That The Assessee Was A Beneficiary Of Accommodation Entries In The Form Of Long-Term Capital Gains (Ltcg) From The Sale Of Shares Amounting To ₹55,16,804/- Received From M/S. Aayan Commercial Pvt. Ltd. & Its Associate Concerns. It

Section 10(38)Section 147Section 148Section 250Section 68

further reported that the assessee had claimed exemption of ₹36,95,540/- under section 10(38) of the Act on account of such alleged bogus LTCG. Accordingly, after obtaining the necessary approval from the competent authority, notice under section 148 of the Act was issued to the assessee. During

Income Tax Officer Ward-1(4), Jaipur vs. Pradeep Kumar Dusad, Jaipur

47. As a result, ITA No

ITA 900/JPR/2025[2016-17]Status: DisposedITAT Jaipur15 Oct 2025AY 2016-17

For Appellant: Sh. S. B. Natani, Ld. C.AFor Respondent: Shri Rajesh Ojha, Ld. CIT

Section 10(38)Section 115BSection 132Section 133ASection 143(3)Section 147Section 148Section 150Section 153CSection 250

read with section 153C of the Act. 2. Vide impugned assessment order dated 28.12.2018, the Assessing Officer had made three additions: (i) Relating to Bogus LTCG claimed by the assessee under section 10(38) of the Act, while holding that an amount of Rs.44,68,330/-was to be treated ... passed by Learned CIT(A) setting aside this addition relating to investment made by the firm, in purchase of the agriculture land. Addition on Bogus LTCG claim & other additions 27. As noticed above, another addition of Rs.44,68,330/- was made by the Assessing Officer, while disallowing LTCG claimed

Pradeep Kumar Dusad, Jaipur vs. Dy. Commissioner of Income Tax Central Circle-2, Jaipur

47. As a result, ITA No

ITA 722/JPR/2025[2016-17]Status: DisposedITAT Jaipur15 Oct 2025AY 2016-17

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

For Appellant: Sh. S. B. Natani, Ld. C.AFor Respondent: Shri Rajesh Ojha, Ld. CIT

Section 10(38)Section 115BSection 132Section 133ASection 143(3)Section 147Section 148Section 150Section 153CSection 250

read with section 153C of the Act. 2. Vide impugned assessment order dated 28.12.2018, the Assessing Officer had made three additions: (i) Relating to Bogus LTCG claimed by the assessee under section 10(38) of the Act, while holding that an amount ... passed by Learned CIT(A) setting aside this addition relating to investment made by the firm, in purchase of the agriculture land. Addition on Bogus LTCG claim & other additions 27. As noticed above, another addition of Rs. 44,68,330/- was made by the Assessing Officer, while disallowing LTCG claimed

Income Tax Officer, Jaipur vs. Kalawati Sharma, Jaipur

In the result, the appeal of the revenue is dismissed

ITA 566/JPR/2024[2014-15]Status: DisposedITAT Jaipur15 Oct 2025AY 2014-15

Bench: Dr. S. Seethalakshmi & Shri Gagan Goyalincome Tax Officer, Jaipur ...... Appellant Vs.

For Appellant: Mr. P. C. Parwal, C.A, Ld. ARFor Respondent: Mr. Kamlesh Kumar Meena, Addl. CIT

Section 10(38)Section 133ASection 250Section 69C

justified in deleting the addition of Rs. 95,11,750/-made by AO on 1 ITO vs. Kalawati Sharma account of bogus LTCG claimed u/s. 10(38) of the I.T. Act ignoring that the impugned transaction was manipulative/deceptive device to create profit/loss? 2. Ground No. 2 - Whether on the facts ... 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

Sameer Shah (HUF), 1 "Swapneel", Opp. Gurudatatrey Temple Palace Road vs. Income Tax Officer, Ward 1(3), Jamnagar, Gujarat

In the result, appeal filed by the assessee is allowed

ITA 248/RJT/2025[2013-14]Status: DisposedITAT Rajkot14 Oct 2025AY 2013-14

Bench: Dr. Arjun Lal Saini. आयकरअपीलसं./Ita No.248/Rjt/2025 "नधा"रणवष" / Assessment Year: (2013-14) (Hybrid Hearing) Sameer Shah (Huf), Vs. The Ito Ward 1(3), 1 “Swapneel”, Opp. Jamnagar - 361001 Gurudatatrey Temple, Palace Road, Jamnagar - 361008 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aawhs3749E (Appellant) (Respondent)

For Appellant: Shri Sagar Shah, Ld. ARFor Respondent: Shri Abhimanyu Singh Yadav, Ld. Sr. DR

Section 144BSection 147Section 250

erred in law as well as on facts in passing the appellate order and in contending that assessee was involved in the bogus LTCG and price ragging activity without having direct nexus or any concrete evidence to disprove the facts brought on record by the assessee. Even the lower authority

Devang Bhupendra Shah, Mumbai vs. Income Tax Officer 32(1)(4), Mumbai

In the result, the appeal of the assessee is allowed

ITA 4218/MUM/2023[2014-15]Status: DisposedITAT Mumbai13 Oct 2025AY 2014-15

Bench: Shri Sandeep Gosain & Shri Prabhash Shankardevang Bhupendra Shah, V/S. Income Tax Officer, Ward – B/9, Neminath Apt., बनाम 32(1)(4), Kautilya Bhavan, Shimpoli Road, Borivali Bandra Kurla Complex, West, Mumbai – 400 092, Bandra (East), Mumbai– Maharashtra 400051, Maharashtra स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aadps1211L Appellant/अपीलार्थी .. Respondent/प्रतिवादी

For Appellant: Shri Rahul Kapadia,ARFor Respondent: Shri Annavaran Kasuri, (Sr. AR)

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

paras are reproduced as under: 6.8 Decision on Ground No. 8 & 9: Appellant has also contested addition u/s. 68 of Rs. 5,30.47.379 as bogus LTCG and Rs. 26,52,368/- paid as commission on such LTCG, claimed during the relevant year. It is noted that appellant has sold shares ... further noted that appellant was subjected to survey on 22.08.2016 wherein his statement was recorded. AO has placed reliance on his admission of bogus LTCG claim in this statement. I have gone through the statement relied upon by the AO. It is noted that appellant has made his position very

Rupali Gupta, Meerut vs. National Faceless Appeal Centre (NFAC), National Faceless Appeal Centre Delhi

Appeal is dismissed

ITA 5182/DEL/2024[2014-15]Status: DisposedITAT Delhi13 Oct 2025AY 2014-15

Bench: Shri Satbeer Singh Godara & Shri Manish Agarwalassessment Year: 2014-15 Vs. National Rupali Gupta, Faceless Appeal 273, Budhana Gate, Meerut, Centre, Delhi Uttar Pradesh Pan: Ajcpg6194L (Appellant) (Respondent) Assessee By None Department By Sh. Rajesh Kumar Dhanesta, Sr. Dr Date Of Hearing 13.10.2025 Date Of Pronouncement 13.10.2025 Order Per Satbeer Singh Godara, Jm This Assessee’S Appeal For Assessment Year 2014-15, Arises Against The Commissioner Of Income Tax (Appeals)/National Faceless Appeal Centre [In Short, The “Cit(A)/Nfac”], Delhi’S Din & Order No. Itba/Nfac/S/250/2024-25/1068639287(1), Dated 12.09.2024 Involving Proceedings Under Section 147 R.W.S. 144 Of The Income-Tax Act, 1961 (Hereinafter Referred To As ‘The Act’). Case Called Twice. None Appears At The Assessee’S Behest. She Had Also Not Put In Appearance On All The Earlier Five Opportunities Of Hearing As Well. The Assessee Is Accordingly Proceeded Ex-Parte. 2. It Next Transpires With The Able Assistance Coming From The Revenue Side That Both The Learned Lower Authorities Have Inter Alia Treated The Assessee’S Alleged Capital Gains Derived From Sale Of Shares Amounting To Rs.48,28,090/- As Bogus Followed By 5% Commission Expenditure Thereupon Coming To Rs.2,41,405/- As Unexplained Under Section 69C; Respectively, In Assessment Order Dated 28Th March, 2022 & Upheld In The Lower Appellate Discussion, As Followed: “4. The Present Appeal Was Filed By The Appellant On 21.04.2022 By Raising 20 Grounds Of Appeal. During The Course Of Appeal Proceedings, Hearing Notices Were Sent On 15.07.2024, 01.08.2024 & 20.08.2024. In Response To The Notices Issued The Appellant Filed Only A Brief Written Submission As Under:

Section 147Section 68Section 69C

penny stock scrip and it has been used by various operators and exit providers to provide accommodation entries in the form of bogus LTCG for the purpose of bringing un-accounted cash into the books of accounts. For this purpose, the shares of this company were used by the opera

Pramila Agarwal, Jaipur vs. The Income Tax Officer Ward-2(5), Jaipur

In the result, the appeal of the assessee is allowed

ITA 531/JPR/2025[2011-12]Status: DisposedITAT Jaipur10 Oct 2025AY 2011-12

For Appellant: Shri Tarun Mittal, C.AFor Respondent: Shri Gorav Avasthi, JCIT

Section 10(38)Section 147Section 148Section 68

during the searches and as per the information made public by the SEBI, it was 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. Further on the basis of information collected during search ... survey operations beneficiaries of such bogus LTCG were also identified. The AO found that the alleged Long Term Capital Gains declared by the assessee on account of purchase/sale of shares of M/s Splash Media/Luharuka Media & Infra is a bogus one and actually represents assessee unaccounted money routed back

Ashok Amarnath Agrawal, Vadodara vs. The Dy.CIT, Circle-2(1)(1), Vadodara

In the result, appeal of the assessee in ITA No

ITA 1078/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad10 Oct 2025AY 2018-19

Bench: Dr. B.R.R. Kumar, Vice-Shri Siddhartha Nautiyal

For Appellant: Shri Parimalsinh B. Parmar, ARFor Respondent: Shri B.P. Srivastava, Sr DR

Section 10(38)Section 132Section 147Section 250Section 271ASection 68

Assessing Officer relied solely on external information without independent application of mind or inquiry. • the reopening was for alleged bogus LTCG, but no such addition was made; only STCL disallowed. • the purchase/sale on recognized exchange, STT paid, banking channels used, supported by complete documentary evidence and are genuine. • In absence

Ashok Amarnath Agrawal, Vadodara vs. The Dy.CIT, Circle-2(1)(1), Vadodara

In the result, appeal of the assessee in ITA No

ITA 1077/AHD/2025[2017-18]Status: DisposedITAT Ahmedabad10 Oct 2025AY 2017-18

Bench: Dr. B.R.R. Kumar, Vice-Shri Siddhartha Nautiyal

For Appellant: Shri Parimalsinh B. Parmar, ARFor Respondent: Shri B.P. Srivastava, Sr DR

Section 10(38)Section 132Section 147Section 250Section 271ASection 68

Birendra Singh Nirbhay, Sirsi Road Jaipur Rajasthan vs. ITO Ward 3(1) Jaipur, Ncrb Income Tax Department Statue Circle Jaipur Rajasthan

In the result, the appeal of the assessee is allowed

ITA 704/JPR/2024[2015-16]Status: DisposedITAT Jaipur09 Oct 2025AY 2015-16

For Appellant: Shri Deepak Sharma, CAFor Respondent: Shri Shri Gautam Singh Choudhary, JCIT-DR

Section 10(38)Section 132(4)Section 69C

dismissed the appeal of the assessee by observing at para 3.1 to para 5.3 of his order as under:- "3.1 Commission Paid on Bogus LTCG entries. During the course of investigation, it was also emerged that the syndicate of entry providers charged commission from the beneficiaries in lieu of providing ... LTCG for the assessee without any benefit derived from him. In the search/ seizure operation conducted by the department, the whole scam of providing bogus LTCG was unearthed These syndicate members which include promoters/ Directors of penny stock company, share brokers etc., have admitted that they have provided bogus LTCG

Lalit Kumar Jain, Alwar vs. ITO Ward, 1(2), Alwar

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

ITA 1126/JPR/2025[2018-2019]Status: DisposedITAT Jaipur30 Sept 2025AY 2018-2019

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

For Appellant: Shri Rohan Sogani, CAFor Respondent: Shri Gautam Singh Choudhary, JCIT-DR

Section 147Section 148Section 151Section 69

broader scheme of stock rigging and bogus entries operated by Shri Naresh Jain who through a SEBI investigation, was found guilty of facilitating bogus LTCG via penny stock. The AO observed that despite opportunity, the assessee failed to provide corroborative documents like broker ledger, bank statements or detailed contract notes

Income Tax Officer, Ward 1(1), Faridabad vs. Bharti Jain, Delhi

In the result, the Revenue’s appeal stands dismissed

ITA 5717/DEL/2024[2015-16]Status: DisposedITAT Delhi30 Sept 2025AY 2015-16

Bench: Shri Mahavir Singh, Hon’Bleito, Ward 1(1), Vs. Bharti Jain, Faridabad Qd-61, Vishakha Enclave, Pitampura, New Delhi-88 (Pan: Aftpg37441G) (Appellant) (Respondent)

For Appellant: Ms. Harpreet Kaur Hansra, Sr. DRFor Respondent: Sh. Mayank Patwari, Adv

Section 10(38)Section 131Section 142(1)Section 143(2)Section 147Section 148Section 68Section 69C

acceptable as AO in his remand report has discussed in detail the reason for making addition on the issue of bogus LTCG exemption claimed by the assessee and the cash commission paid in lieu of accommodation entry in the form of bogus LTCG exemption claimed. The main evidence on which