“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

Income Tax Officer-27(3)(1) Mumbai, Vashi vs. Sachin Velji Shah, Mumbai

Appeal of the revenue is dismissed

ITA 1938/MUM/2023[2014-15]Status: DisposedITAT Mumbai02 Sept 2025AY 2014-15

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

For Appellant: Shri Swapnil Choudhary, Sr. DRFor Respondent: Shri Prakash Jhunjhunwala, AR

Section 10(38)Section 132(4)Section 133(6)Section 143(3)Section 250Section 68Section 69C

given a detailed finding with regard to the report of the Investigation Directorate and the modus operandi with regard to the price rigging of the alleged penny stock. The AO has also recorded a finding that the purchase of the impugned shares is by private placement through M/s Sarvottam Advisory ... stating that the assessee is aware of the scrip being a penny stock, the cash being routed, the assessee having knowledge about the price rigging etc. are without any basis and no evidence in this regard has been brought on record. With regard to the SEBI report

Giriraj Daulal Damani HUF, Mumbai vs. Income Tax Officer, Piramal Chembers

In the result all appeals filed by the assessees for all assessment years stands partly allowed for statistical purposes

ITA 4516/MUM/2025[2012-13]Status: DisposedITAT Mumbai29 Aug 2025AY 2012-13

Bench: Smt. Beena Pillai () I.T.A. No. 4513/Mum/2025 Assessment Year: 2012-13 Anant Vijay Damani Vs. Income Tax Officer 1304/1305, F Wing Ashok Piramal Chember, Gardens, Tokersi, Jivraj Lalbaug, Parel Road Sewree, Mumbai-400013 Mumbai- 400015 Pan:Aeepd7764E (Appellant) (Respondent)

Section 51

there is no documentary evidence for any live link with the Department to come to the conclusion that the assessee was involved in the price rigging of Rutron International Ltd. 9 ITA Nos. 4513, 4514, 4515, 4516/Mum/2025; A.Y. 2012-13 7.2 On the contrary, the Ld.DR vehemently supported the orders

Narottam Daulal Damani HUF, Mumbai vs. Income Tax Officer, Piramal Chember

In the result all appeals filed by the assessees for all assessment years stands partly allowed for statistical purposes

ITA 4515/MUM/2025[2012-13]Status: DisposedITAT Mumbai29 Aug 2025AY 2012-13

Section 51

Radhika Anant Damani, Mumbai vs. Income Tax Officer, Piramal Chember, Mumbai

In the result all appeals filed by the assessees for all assessment years stands partly allowed for statistical purposes

ITA 4514/MUM/2025[2012-13]Status: DisposedITAT Mumbai29 Aug 2025AY 2012-13

Section 51

Anant Vijay Damani, Mumbai vs. Income Tax Officer, Piramal Chamber, Mumbai

In the result all appeals filed by the assessees for all assessment years stands partly allowed for statistical purposes

ITA 4513/MUM/2025[2012-13]Status: DisposedITAT Mumbai29 Aug 2025AY 2012-13

Section 51

DCIT-2(1)(1), Mumbai vs. Inventure Growth & Securities Limited, Mumbai

In the result, the appeal of the Revenue is dismissed and the cross-objection of the assessee is also dismissed

ITA 4163/MUM/2025[2013-14]Status: DisposedITAT Mumbai28 Aug 2025AY 2013-14

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

Section 10(38)Section 115JSection 143(3)Section 144Section 147Section 148Section 148ASection 68

that the principal mischief of the penny stock modus operandi lies in the generation of exempt long-term capital gains or losses through contrived price rigging. However, in the assessee‘s case, there was no attempt to avail any such exemption. On the contrary, the assessee had consistently treated these ... scrips in its vast portfolio later acquired the reputation of being manipulated. In the absence of material linking the assessee to the alleged price rigging, and in the face of the fact that the gains were already subjected to tax, no addition can be sustained merely on account

Assistant Commissioner of Income Tax, Patna vs. Sushila Sultania, Patna

The appeal of the revenue is dismissed

ITA 475/PAT/2024[2014]Status: DisposedITAT Patna26 Aug 2025

Bench: Shri George Mathan & Shri Rajesh Kumari.T.A. No.475/Pat/2024 Assessment Year: 2014-15 Acit, Circle-4, Patna……..........................…...........................……….……Appellant Vs. Sushila Sultania, Patna……….............…..….…...……........……...…..…..Respondent 503, Venkatesh Apartment, Dakbunglow Road, Budh Marg, Patna, Bihar-800001. [Pan: Acmps5390M] Appearances By: Shri Ashwani Kumar, Jcit, Appeared On Behalf Of The Appellant. Shri Neelkhanth Kandelwal, Ar, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : August 14, 2025 Date Of Pronouncing The Order : August 26 , 2025 Order Per Rajesh Kumar: The Present Appeal Is Filed By The Revenue For The Assessment Year 2014-15 Against The Order Dated 21.05.2024 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 Only Issue Raised By The Revenue In This Appeal Is Against The Order Of The Ld. Cit(A) Deleting The Addition Of Rs.1,84,74,698/- & Rs.8,79,748/- As Made By The Assessing Officer U/S 68 R.W.S. 115Bbe & U/S 69C Respectively. 3. Facts In Brief Are That The Case Of The Assessee Was Reopened U/S 147 By Issuing Notice U/S 148 Of The Act On 31.03.2021. The Said Notice Was Duly Complied By The Assessee By Filing Return Of Income On 22.04.2021 Declaring Total Income At Rs.19,11,200/-. The Assessing

Section 10(38)Section 142(1)Section 143(2)Section 147Section 148Section 250Section 68Section 69C

facts and submissions of the assessee, deleted the addition so made by the Assessing Officer. We find that SEBI has done investigation in the price rigging of equity shares of M/s Surabhi Chemical & Investment Ltd. and vide order dated 27.01.2021 held that there was nine persons/entities involved but neither

Hansaben Girishbhai Shah, Ahmedabad vs. The Dy.CIT, Circle-2(1)(1), Ahmedabad

The appeal of the assessee stands allowed on this legal ground

ITA 1279/AHD/2024[2017-18]Status: DisposedITAT Ahmedabad26 Aug 2025AY 2017-18

Bench: Shri Sanjay Garg & Shri Makarand V. Mahadeokarआयकर अपील सं /Ita No.1279/Ahd/2024 िनधा"रण वष" /Assessment Year : 2017-18 Hansaben Girishbhai Shah The Dy.Cit बनाम/ 139, V.R. Shah Smruti Circle-2(1)(1) V/S. Shikshan Mandir Ahmedabad – 380 015 Opp. Yogeshwar Nagar Society Nr. Dharnidhar Derasar Vasna Ahmedabad – 380 007 "थायी लेखा सं./Pan: Aajpd 7188 H (अपीलाथ$/ Appellant) (%& यथ$/ Respondent) Assessee By : Shri Jaimin Shah, Ar Revenue By : Shri Abhijit Sr.Dr सुनवाई की तारीख/Date Of Hearing : 20/08/2025 घोषणा की तारीख /Date Of Pronouncement: 26/08/2025 आदेश/O R D E R Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Of The Learned Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi [Hereinafter Referred To As ‘Cit(A)’] Dated 27/03/2024 Passed U/S.250 Of The Income Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) For The Assessment Year (Ay) 2017-2018. Hansaben Girishbhai Shah Vs. Dy.Cit, Cir-2(1)(1) Asst.Yeaar 2017-18

For Appellant: Shri Jaimin Shah, ARFor Respondent: Shri Abhijit Sr.DR

Section 139(1)Section 143(3)Section 147Section 148Section 250

collected by the Investigation Wing in post-search enquiries. That from the aforesaid information, it revealed that the Kausahal Group was indulged in stock price rigging and that the assessee was one of the beneficiaries. That the assessee had traded off-market in the shares of Kaushal Group ... Nos.6 & 6.4 of the impugned order. He submitted that the Ld.CIT(A) observed that the assessee had shown bogus STCG by taking benefit of price rigging of that script by Kaushal Group. The Ld.DR further submitted that, time and again it has been held by the higher Courts including

Praveen Sitaram Agarwal, Mumbai vs. Income Tax Officer, WD-24(3)(3), Mumbai

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

ITA 3454/MUM/2025[2014-15]Status: DisposedITAT Mumbai26 Aug 2025AY 2014-15

Bench: SHRI AMIT SHUKLA (Judicial Member), SMT RENU JAUHRI (Accountant Member)

Section 10(38)Section 143(1)Section 143(2)Section 143(3)Section 147Section 148Section 68Section 69C

specifically called upon both the assessee and the Revenue to clarify whether any regulatory action had been initiated by SEBI in respect of alleged price rigging or manipulation of the shares of M/s. Surabhi Chemicals & Investments Ltd., either during the relevant period or thereafter. It has been fairly submitted

Manishkumar Ramlakhan Agrawal, Ahmedabad vs. Income Tax Ooficer, Ward 6(1)(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 920/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad25 Aug 2025AY 2018-19

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Shri Chetan Agarwal, ARFor Respondent: Shri Rajenkumar M Vasavda, Sr. DR

Section 10(38)Section 132Section 142(1)Section 143(3)Section 144Section 144BSection 147Section 271A(1)(d)Section 272A(1)(d)Section 273B

case of the Kushal Group of Ahmedabad on 05.02.2019. During the investigation, it was found that the said Group was involved in price rigging and issuing bogus accommodation entries, including fabricated long-term and short-term capital gains/losses. Based on the appraisal report, the Assessing Officer noted that the assessee

DCIT(CC)-8(3), Mumbai vs. Nakchhatra Vimleshkumar Mehta, Mumbai

In the result, the appeal filed by the Revenue in ITA No

ITA 3777/MUM/2025[2012-13]Status: DisposedITAT Mumbai25 Aug 2025AY 2012-13

Bench: Shri Amit Shukla & Shri Girish Agrawal

For Appellant: Shri Devendra JainFor Respondent: Shri Leyaqat Ali Aafaqui

Section 10(38)Section 143(1)Section 143(3)Section 147Section 148

page numbers 22 to 24 of the impugned order and the same are not under dispute 5.3 The Ld. CIT-DR has alleged price rigging /manipulation on the part of the assessee to submit that the same was done to generate fictitious LTCG for the investors. However, we find that ... cannot satisfactorily explain its nature and source. The AO's action, based on BSE trade data under Section 133(6) and analysis showing artificial price rigging (e.g., shares purchased at low values and sold at inflated prices within a short period), is justified. The CIT(A) ignored

DCIT(CC)-8(3), Mumbai vs. Nakchhatra Vimleshkumar Mehta, Mumbai

In the result, the appeal filed by the Revenue in ITA No

ITA 3726/MUM/2025[2012-13]Status: DisposedITAT Mumbai25 Aug 2025AY 2012-13

Bench: Shri Amit Shukla & Shri Girish Agrawal

For Appellant: Shri Devendra JainFor Respondent: Shri Leyaqat Ali Aafaqui

Section 10(38)Section 143(1)Section 143(3)Section 147Section 148

Anand Mellaram Issrani, Mumbai vs. Asst. Comm. of Income Tax 23(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 2916/MUM/2025[2011-12]Status: DisposedITAT Mumbai25 Aug 2025AY 2011-12

Bench: Shri Sandeep Gosain () & Shri Om Prakash Kant () Assessment Year: 2011-12 Shri Anand Mellaram Issrani, Acit 23(1), 1St Floor, Charishma Chs, Guru Piramal Chambers, Nanak Road, Bandra Vs. Mumbai-400012. Mumbai-400051. Pan No. Aaapi 1267 K Appellant Respondent

For Appellant: Mr. Haridas BhattFor Respondent: Mr. Pravin Salunkhe, Sr. DR

Section 68Section 69C

above it is clear that the assessee had prior knowledge of mentioned above it is clear that the assessee had prior knowledge of share price rigging of share price rigging of M/s Action Financial Services (India) Ltd and M/s Action Financial Services (India) Ltd and had purchased them. Under these ... nexus between the assessee’s AFSIL established a sufficient nexus between the assessee’s AFSIL transactions and any alleged price transactions and any alleged price-rigging/accommodation rigging/accommodation- entry operation so as to justify addition under Section 68 of entry operation so as to justify addition under Section

Ashok Panwar HUF, Jodhpur vs. ACIT, Central Circle-3, Jodhpur

In the result, both the appeals of the assesses ITA No

ITA 56/JODH/2024[2014-15]Status: DisposedITAT Jodhpur22 Aug 2025AY 2014-15

Bench: Dr. Mitha Lal Meena, Hon'Ble & Shri Anikesh Banerjee, Hon'Ble

Section 10(38)Section 143(2)Section 143(3)Section 250Section 68

only to rely upon the investigation report of the Investigation Wing of the department. He further argued that the assessee never involved in any price rigging related to these transactions and the scrip was never banned by the SEBI. The Ld.AR respectfully relied on the order of the co-ordinate ... ordinate benches has considered the alleged scrip and held as not a bogus transactions and the assessee has not involved in any price rigging. So in any case, the said transactions cannot be stated as a bogus transaction for gaining LTCG. The Ld.AR further respectfully relied on the judgments

Kamal Khetan, Mumbai vs. Deputy Commissioner of Income Tax, Central Circle 3(4), Mumbai

In the result, appeal of the assessee is allowed

ITA 2702/MUM/2025[2013-14]Status: DisposedITAT Mumbai14 Aug 2025AY 2013-14

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI ARUN KHODPIA (Accountant Member)

Section 10(38)Section 143(1)Section 143(3)Section 148Section 68Section 69C

SEBI Complaints Redress System as the said company has not addressed complaints of two investors. There is no reference of any price manipulation of price rigging in the shares of ACI infocom. Both AO as well as ld.CIT(A) has wrongly placed reliance on the said order of SEBI, copy ... assessee and by bringing on record, any cogent material to sustain those additions, could not be discharged by the revenue. The allegation of price rigging / manipulation has been levied without establishing the vital link between the assessee and various entities as stated by AO being exit providers. 13. In this

Income Tax Officer Ward 4(2)(1), Ahmedabad vs. Alpesh Manharlal Mistry, Ahhmedabad

In the result, the appeal field by the Revenue is hereby dismissed

ITA 777/AHD/2025[2012-13]Status: DisposedITAT Ahmedabad12 Aug 2025AY 2012-13

Bench: Shri T.R. Senthil Kumar (Judicial Member), Shri Narendra Prasad Sinha (Accountant Member)

Section 142(1)Section 144Section 148Section 69

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. Therefore we find nothing perverse in the order of the Tribunal. In of Rajnikant Prabhudas I.T.A ... ITAT Ahmedabad dismissed revenue's appeal by stating that no material has been brought on record to suggest that assessee was involved in any price rigging and nor has the case of assessee mentioned in the list of beneficiaries, by the persons whose statements were recorded. In the statements recorded

Urveen Shivprasad Vyas, Ahmedabad vs. The Dy.CIT, Circle-2(1)(1), Ahmedabad

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

ITA 1119/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad12 Aug 2025AY 2018-19

Bench: Ms. Suchitra R. Kamble & Makarand V.Mahadeokarasstt.Year : 2018-2019 Urveen Shivprasad Vyas The Dcit, Cir.2(1)(1) 2, Dev Vihar-H Vs. Ahmedabad. B/H. Vrundavan Bungalows Thaltej-Shilaj Road, Ahmedabad. Pan : Ablpv 7563 R (Applicant) (Responent) Assessee By : Shri Prithu Parimal, Advocate : Shri Amit Pratap Singh, Sr.Dr Revenue By सुनवाई क" तारीख/Date Of Hearing : 29/07/2025 घोषणा क" तारीख /Date Of Pronouncement: 12/08/2025

For Appellant: Shri Prithu Parimal, Advocate

Section 147Section 148Section 148ASection 250

short-term capital loss of Rs.14,31,925/- by trading in the scrip of Kushal Tradelink Ltd., allegedly used for creating artificial losses through price rigging and pre-arranged trades. The AO issued notice under section 148 of the Act on 30.03.2022, after complying with the procedure prescribed under section ... search conducted in the Kushal Group, no material or evidence was brought on record to link the assessee personally with any accommodation entry, price rigging, or manipulation. The order of the AO was based on assumptions, general market trends, and financials of the company, without any transaction-specific adverse inference

Income Tax Officer, Mumbai vs. Tejas Bharatkumar Saglani, Mumbai

In the result, grounds No

ITA 4312/MUM/2025[2011]Status: DisposedITAT Mumbai12 Aug 2025

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan () Assessment Year: 2011-12 Ito, Tejas Bharatkumar Saglani, 4Th Floor, Room No. 405, Piramal Shop No. 22/23, Santoshi Mata Chambers, Lal Baug, Parel, Vs. Chs, Below Reliance Super, Mumbai-400012. Lamington Road, Mumbai-400008. Pan No. Azjps 8276 Q Appellant Respondent

For Respondent: Mr. Rasik Tanna

Intech Ltd., without discussing in detail any specific link between Intech Ltd., without discussing in detail any specific link between the assessee and any price rigging or pre the assessee and any price rigging or pre-arranged arra arranged arrangement. In our opinion, when the assessee did not file

Alpa Rajendra Jain, Mumbai vs. DCIT Circle 19(1), Mumbai

In the result, appeal of the assessee is allowed

ITA 2762/MUM/2025[2011-12]Status: DisposedITAT Mumbai08 Aug 2025AY 2011-12

Bench: Shri Pawan Singh, Hon'Ble

Section 10(38)Section 254(1)Section 271(1)(c)Section 68

regular investor in shares. Further, there is also no allegation made that the assessee was part of ring which indulged in the alleged price rigging. We notice that the AO has placed reliance on the report of Investigation wing to hold that the assessee has availed accommodation entries ... shares. The Tribunal has also come to a finding that there is no allegation against the 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. 4. Mr. Walve placed reliance

ITO 41(3)(1), Mumbai vs. Deepika Anil Agarwal, Mumbai

In the result the appeal filed by the revenue stands

ITA 1885/MUM/2025[2011-12]Status: DisposedITAT Mumbai06 Aug 2025AY 2011-12

Bench: Hon’Ble Shri Sandeep Gosain& Shri Girish Agrawal

Section 10(38)Section 132Section 132(4)Section 143Section 147Section 148Section 263Section 68

Ebrahim Gheewala) ITA Nos.1487 & 1503/Mum/2024 We notice that, in the instant case, the AO has not established that the assessee was involved in price rigging and further the AO did not find fault with any of the documents furnished by the assessee. Hence, the ratio laid down in the above ... controverting the documentary evidences furnished by the assessee and by bringing on record any cogent material to sustain the addition. The allegation of price rigging / manipulation has been levied without establishing the vital link between the assessee and other entities. The whole basis of making additions is third party statement