“price rigging”

Cash Credits & Unexplained ItemsSection 68Section 68473 judgments

The decision most relied on for price rigging is Sanjay Bimalchand Jain v. PCIT-1, Nagpur (89 Taxmann.com 196), cited in 251 judgments on BharatTax.

Leading authorities on price rigging

Sanjay Bimalchand Jain v. PCIT-1, Nagpur

89 Taxmann.com 196 · 2018 · High Court

251

citing judgments

The exemption for long-term capital gains on share transactions is unavailable if the assessee fails to discharge the onus of proving the genuineness of gains arising from dubious share transactions designed to convert unaccounted income into tax-exempt capital gains. Courts will uphold an assessment based on the Revenue's evidence of price rigging or penny stock manipulation if the assessee cannot provide cogent evidence for the abnormal rise in share value.

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.

Delhi in Suman Poddar v. Income Tax Officer 99

112 Taxmann.com 330 · 2019 · Supreme Court

138

citing judgments

Exemption under Section 10(38) is not allowable for long-term capital gains arising from bogus share transactions involving penny stocks or manipulative dealings. The Income Tax Department can establish such a case based on the preponderance of probabilities where there is no genuine financial worth.

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.

PCIT v. Smt. Renu Aggarwal

456 ITR 249 · 2023 · Supreme Court

citing judgments

Additions for alleged bogus long term capital gain from penny stocks are not sustainable if based solely on third-party statements without establishing the assessee's direct nexus to price rigging, especially when share transactions are through banking channels and held for a reasonable period.

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 176 · 2021 · High Court

citing judgments

This case establishes principles for evaluating the genuineness of long-term capital gains claimed under Section 10(38), particularly when allegations of bogus transactions, price rigging, or penny stock schemes arise. It clarifies the department's burden of proof in demonstrating, based on a preponderance of probability, that an assessee used a colourable device to claim exempt income.

Pratik Suryakant Shah v. ITO

77 Taxmann.com 260 · 2017 · ITAT

citing judgments

The exemption for long-term capital gains under Section 10(38) is deniable where gains arise from bogus penny stock transactions, if the fraudulent nature is established by the revenue through a preponderance of probability, often involving evidence of price rigging and the role of entry operators. This applies even if documentary evidence like contract notes is presented.

Judgments citing price rigging

Assistant Commissioner of Income Tax, Jalgaon vs. Sidharth Ratanlal Bafna, Jalgaon

In the result, all the above 6 appeals filed by the Revenue are dismissed and

ITA 1565/PUN/2024[2018-19]Status: DisposedITAT Pune27 Oct 2025AY 2018-19

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

For Appellant: S/Shri Suchek Anchaliya andFor Respondent: Shri Amit Bobde, CIT

Section 10(38)Section 132Section 143(3)Section 147Section 148Section 153A

several hundred of crores, all these persons have used sock exchange platform through exit providers, connivance with the brokers, directors of suspicious companies, price rigging through synchronized trade a money laundering exercise involving serious violation of Income tax, Securities law, Corporate Laws, banking laws and several other economic

Assistant Commissioner of Income Tax, Jalgaon vs. Sidharth Ratanlal Bafna, Jalgaon

ITA 1561/PUN/2024[2015-16]Status: DisposedITAT Pune27 Oct 2025AY 2015-16

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

For Appellant: S/Shri Suchek Anchaliya and Tushar NagoriFor Respondent: Shri Amit Bobde, CIT

Section 132Section 143(2)Section 143(3)Section 147Section 148Section 153A

Assistant Commissioner of Income Tax, Jalgaon vs. Sidharth Ratanlal Bafna, Jalgaon

ITA 1560/PUN/2024[2014-15]Status: DisposedITAT Pune27 Oct 2025AY 2014-15

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

For Appellant: S/Shri Suchek Anchaliya and Tushar NagoriFor Respondent: Shri Amit Bobde, CIT

Section 132Section 143(2)Section 143(3)Section 147Section 148Section 153A

Assistant Commissioner of Income Tax, Jalgaon vs. Sidharth Ratanlal Bafna, Jalgaon

In the result, all the above 6 appeals filed by the Revenue are dismissed and

ITA 1555/PUN/2024[2013-14]Status: DisposedITAT Pune27 Oct 2025AY 2013-14

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

For Respondent: S/Shri Suchek Anchaliya and

Section 10(38)Section 132Section 143(3)Section 147Section 148Section 153A

Income Tax Officer, Delhi vs. Megha Garg, Delhi

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

ITA 3488/DEL/2025[2013-14]Status: DisposedITAT Delhi27 Oct 2025AY 2013-14

Bench: Shri Anubhav Sharma & Shri Amitabh Shukla, Accountnat Member [Assessment Year: 2013-14] Income Tax Officer, Megha Garg, 1707 E-2 Block Civic Centre, 160 Saraswati Vihar Vaishali, New Delhi-110002 Vs Pitampura, Delhi-110034 Pan-Aecpg7098C Appellant Respondent

Section 10(38)Section 147Section 68Section 69A

deleted the addition noting that the ld. AO has not placed on record any independent and cognizable evidences to allude any price rigging by the assessee. While drawing his conclusions, the ld. CIT(A) placed reliance upon the decision of Amrtisar Bench of ITAT in the case of Rama Mittal ... found that the addition made by the AO and upheld by the CIT(A) was solely based on the premise of alleged price rigging in the PMC Fin Corp script. However, this allegation is negated by the Securities Appellate Tribunal Mumbai, in its order dated August 28, 2023, by explicitly

Anjali Gupta, Gurgaon vs. ITO Ward -1(2), Gurgaon

In the result, appeal of the assessee is allowed

ITA 3605/DEL/2019[2015-16]Status: DisposedITAT Delhi27 Oct 2025AY 2015-16

Bench: Shri Anubhav Sharma & Shri Amitabh Shukla, Accountnat Member [Assessment Year: 2015-16] Ms. Anjali Gupta, Ito, Ward-1(2), A-84, Summit, Dlf City-5, Gurgaon, Sector-56, Gurgaon, Vs Haryana Pan-Aaipg5132F Appellant Respondent Assessee By Shri Vijay Kumar Singla, Ca Revenue By Ms. Harpreet Kaur Hansra, Sr. Dr Date Of Hearing 28.07.2025 Date Of Pronouncement 27.10.2025

Section 10(38)Section 115BSection 143(3)Section 68

assessee. It was submitted that the assessee had made investments in the shares as an average investor having no role in the alleged price rigging activity. In support of its contentions, Ld.AR placed reliance upon a plethora of judicial precedents as supporting its case. Thus, reliance was placed upon ... present case, still the revenue has not brought on record any materials linking the assessee in any of the dubious transactions relating to entry, price rigging or exit providers. Even in the SEBI report, there is no mention or reference to the involvement of the assessee. We can only presume

Yogeshkumar Pravinkumar Shah, Mumbai vs. Asstt. Commissioner of Income Tax 19(3), Mumbai

ITA 4544/MUM/2025[2014-2015]Status: DisposedITAT Mumbai22 Oct 2025AY 2014-2015

Bench: Justice (Retd.) C V Bhadang & Ms Padmavathy S, Am

For Appellant: Shri K. Gopal & Om KandalkarFor Respondent: 16.09.2025

Section 10(38)Section 148Section 250Section 68

entered into by the appellant were artificial, lacking commercial substance, and structured solely for the purpose of tax evasion. The elaborate scheme, involving share price rigging, creation of dummy entities, and circular trading, underscores the efforts taken to exploit exemptions on long- term capital gains and convert unaccounted money into ... Investigation Wing and the statement recorded but has not recorded any finding as to how the assessee is linked to the alleged price rigging. The ld. AR also relied on the decision of the Co-ordinate Bench in the case of Lalitaben Pravin Shah vs. CIT (ITA No. 2008/Mum/2023 dated

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

discussed the modus operandi of such transactions, the types of penny stock companies, the entities involved in the transactions, the transactions, the price rigging and also analysed the balance sheet as well as the profit and loss account of Unishire Urban Infra Ltd. for the past years and concluded that

Facts Tradelink Private Limited, Mumbai vs. ITO 12 (2) (1), Mumbai

In the result, appeals of the assessee are allowed

ITA 4410/MUM/2025[2018-19]Status: DisposedITAT Mumbai15 Oct 2025AY 2018-19

Bench: Shri Pawan Singh(Physical Hearing) Facts Tradelink Private Limited Ito - 12(2)(1), Mumbai 206, Ghanshayam Tower, M.G. Road, Vs Aayakar Bhavan, M.K. Road, Borivali (East), Mumbai – 400066. Mumbai – 400020. [Pan: Aaacf7985Q] Appellant / Assessee Respondent / Revenue

Section 147Section 148Section 151ASection 2Section 254(1)

various documentary evidences furnished by assessee. The assessing officer merely relied upon the general information. Neither the assessee nor his broker is involved in price rigging rather there was a genuine business loss to the assessee. To support his submission, the ld. AR relied upon the following decision:  Graceunited Developers

DCIT CC-8(4), Mumbai vs. Oscar Infra Private Limited, Navi Mumbai

In the result, the appeal filed by the revenue stands dismissed

ITA 847/MUM/2025[2011-12]Status: DisposedITAT Mumbai13 Oct 2025AY 2011-12

Bench: Hon’Ble Shri Sandeep Gosain & Shri Prabhash Shankardcit, Cc-8(4) Vs. Oscar Infra Pvt Ltd Room No. 659, 6Th Floor, Office No. 707, 7Th Aayakar Bhavan, Mk Road Floor, Everest Nivara, Churchgate, Mumbai – Infotech Park, Plot No. 400020. D/3, Ttc Industrial Area, Midc Pan/Gir No. Aabco0152H (Applicant) (Respondent)

Section 70(2)

Films Industry Ltd. is also a party against whom the monetary penalty of Rs.5,00,000/- has been levied by considering the allegations of price rigging of shares by some other persons for the period from 15.06.2009 to 02.07.2009. Admittedly there are no allegations have been leveled and even ... sale and purchase of shares however, not criticized the same and there was no allegation against the Assessee that he has participated in any price rigging of the scrips involved. For ready reference, the decision of the Hon'ble High Court is reproduced herein below: "JUDGEMENT 1. The following question

Ratan Bhaubali Bhalwankar, Mumbai vs. ACIT-16(3), Mumbai

In the result, the appeal is partly allowed

ITA 1808/MUM/2024[2014-15]Status: DisposedITAT Mumbai13 Oct 2025AY 2014-15

Bench: Shri Sandeep Gosain & Shri Prabhash Shankarmr. Ratan Bahubali V/S. Assistant Commissioner Of Bhalwankar बनाम Income Tax – 16(3), C/O – 2Nd Floor, Gita Aayakar Bhavan, Mumbai - Building, Sion Circle, 400021, Maharashtra Mumbai - 400 022, Maharashtra स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aacpb7285Q Appellant/अपीलार्थी .. Respondent/प्रतिवादी

For Appellant: Shri Margav Shukla, Adv and Shubham ShahFor Respondent: Shri Annavaran Kasuri, (Sr. AR)

Section 10(38)Section 143(2)Section 143(3)Section 68Section 69C

sale and purchase of shares however, not criticized the same and there was no allegation against the Assessee that he has participated in any price rigging of the scrips involved. For ready reference, the decision of the Hon'ble High Court is reproduced herein below: "JUDGEMENT 1. The following question ... purchase of shares. The Tribunal has also come to a finding that there is no allegation against assessee that it has participated in any price rigging in the market on the shares of RFL 3. Therefore, we find nothing perverse in the order of the Tribunal

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

categorically that he has done these deals through a registered broker on recognised stock exchanges. He paid STT and was not party to any price rigging. He offered to withdraw his claim of LTCG just to buy peace of mind and to end protracted litigation in the light ... claiming deductions under section 10(38) and revenue had not brought on record any materials linking assessee in any dubious transactions relating to entry, price rigging or exit providers Even in SEBI report, there was no mention or reference to involvement of assessee Whether, therefore, impugned addition

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

this appeal.” 3. It has come on record that the department’s investigation wing has found several evidence that there had been an artificial price rigging involving M/s. Presha Metallurgical Ltd. And also that the market regulator, namely, Stock Exchange Board of India “SEBI” had further levied penalty of Rs.3

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

stock existed in present case, still revenue had not brought on record any materials linking assessee in any of dubious transactions relating to entry, price rigging or exit providers - Even in SEBI report, there was no mention or reference to involvement of assessee -Whether, on facts, impugned reopening of assessment ... stating that after thorough investigation the transaction of purchase and sale in the scrip namely SMIL as not involved in any kind of price rigging. Thus when the SEBI has not doubted the company SMIL, there is no reason to doubt the genuine transaction claimed by the assessee

Sana Md.Saqib Puthawala, Ahmedabad vs. The ITO, Ward-1(1)(1), Ahmedabad

In the result, the appeal of the Assessee is allowed

ITA 624/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad10 Oct 2025AY 2018-19

Bench: Shri Siddhartha Nautiyal (Judicial Member), Shri Narendra Prasad Sinha (Accountant Member)

Section 10(38)Section 147Section 148Section 148ASection 250Section 69C

case on the basis of specific information received from the Investigation Wing pointing out large scale accommodation entries and artificial LTCG generated through price rigging in the scrip of M/s. Kushal Tradelink Ltd. The Ld. CIT-DR submitted that the A.O. had reproduced the information in respect of the price ... data available on record in respect of the assessee. The connection of the assessee with any broker who was engaged in the price rigging in the shares of M/s. Kushal Tradelink Ltd. was not brought on record. Neither any statement or any other evidence was brought on record to establish

Mohammedsaqib Aiyub Puthawala, Ahmedabad vs. The PCIT-1, Ahmedabad

In the result, the appeal of the Assessee is allowed

ITA 623/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad10 Oct 2025AY 2018-19

Bench: Shri Siddhartha Nautiyal (Judicial Member), Shri Narendra Prasad Sinha (Accountant Member)

Section 10(38)Section 147Section 263

genuinely with intention to earn profit out of that and I have no connection with any operator and I am not party to alleged price rigging. I have no nexus with the company, its directors or operators and I am not connected with the activity of the price rigging

Nitaben Girishbhai Patel, Ahmedabad vs. The ITO, Ward-3(3)(2), Ahmedabad

In the result, while upholding the validity of reopening, we set aside the ex parte order of the CIT(A) on merits and restore the matter to his file for fresh adjudication in accordance with law

ITA 1560/AHD/2025[2017-18]Status: DisposedITAT Ahmedabad09 Oct 2025AY 2017-18

Bench: Shri Siddhartha Nautiyal & Shri Makarand V.Mahadeokarasstt.Year : 2017-18 Nitaben Girishbhai Patel The Ito, Ward-3(3)(2) 33/B, Swi Park, Private Plot Vejalpur Madhuvrund Society Ahmedabad. Ghatlodiya, Ahmedabad. Pan : Aappp 5738 F (Applicant) (Responent) : Shri Parimalsinh B. Parmar, Ar Assessee By : Shri B.P. Srivastava, Sr.Dr Revenue By सुनवाई क" तारीख/Date Of Hearing : 06/10/2025 घोषणा क" तारीख /Date Of Pronouncement: 09/10/2025 आदेश आदेश/O R D E R आदेश आदेश

For Appellant: Shri B.P. Srivastava, Sr.DR

Section 144BSection 147Section 148Section 271ASection 69A

from Rs. 15/- in July 2015 to Rs.281/- in January 2017 without any supporting financial fundamentals, and thereafter fell drastically, which was indicative of price rigging and a typical feature of penny stock companies. The AO 3 held that the transactions were nothing, but accommodation entries taken to introduce unaccounted

Assistant Commissioner of Income Tax, Mumbai vs. Paru Securities Pvt Ltd, Mumbai City

Accordingly we see no infirmity in the order of the FAA in deleting the addition made by the AO towards loss arising out of the M/s. PFL Infotech Ltd. The grounds raised by the revenue are thus dis...

ITA 885/MUM/2025[2012-13]Status: DisposedITAT Mumbai09 Oct 2025AY 2012-13

Bench: Smt Beena Pillai, Jm & Ms Padmavathy S, Am

For Appellant: Shri Hemang Shah, CAFor Respondent: Shri Aditya Rai, Sr. DR

Section 132(4)Section 250

purchased additional shares of M/s PFL Infotech Ltd. which goes to prove that the assessee is not in any way connected with the price rigging and is not involved in any alleged non-genuine transactions. The ld. AR also drew our attention to the SEBI report where the period ... price rigging is stated to be from 01.07.2013 to 13.04.2016 and the transactions carried out by the assessee does not fall in the said period. In summary the ld. AR submitted that the transactions carried out by the assessee in the scrip M/s PFL Infotech Ltd. is genuine

Shri Parin Seventilal Shah, Mumbai vs. Assistant Commissioner of Income Tax Central Circle 1(2), Mumbai

In the result, the appeal of the assessee is allowed

ITA 3690/MUM/2025[2013-14]Status: DisposedITAT Mumbai08 Oct 2025AY 2013-14

Section 10(38)Section 143(3)Section 147Section 234ASection 254(1)Section 271(1)(c)Section 68

member of Bombay Stock Exchange (BSC) and registered with SEBI. There is no allegation against the broker of assessee that he was indulging in price rigging pf sahres or providing accommodation entry. The assessing officer merely relied upon the report of investigation survey without giving any finding of various evidence

Income Tax Officer, Jaipur vs. Renu Agarwal, Jaipur

In the result, appeal of the Revenue is dismissed

ITA 502/JPR/2025[2015-16]Status: DisposedITAT Jaipur30 Sept 2025AY 2015-16

For Appellant: Shri Shailesh Mantri, C.AFor Respondent: Mrs. Anita Rinesh, JCIT, Sr.DR

Section 143(3)Section 250Section 68

should be taken into consideration that merely 7.8% rise in stock prices within a period of 9 days cannot be considered as price rigging. Even the upper circuit and lower circuit limits for Stock prices ranges 5% to 20% on day basis, then how the rise of 7.8% within ... days can be called as price rigging. Although, at that time the assessee was not aware of these types of activities even prevail in stock market. The charts are showing movement in the script and the assessee had just enter in the market stream to earn profits. Further after selling