the Income Tax Appellate Tribunal (ITAT), Kolkata Bench denied claim of exemption under Section 10(38) of the Income Tax Act,1961 as there was long term capital gains from the sale of equity shares. The appeal has been preferred by Manish Goel against the orders of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre.
The Counsel for the assessee, Siddharth Agarwal stated that since the issue involved in the appeals relates to the penny stocks and procuring of accommodation entry in the form of bogus long-term capital gain from sale of equity shares and bogus loss from sale of equity shares, and the same is squarely covered against the assessee by the recent judgment of the Calcutta High Court, PCIT vs. Swati Bajaj.
A Single Bench consisting of Dr Manish Borad, Accountant Member observed that “Now on examining the facts of the instant appeals in light of this judgment, I find that similar type of transactions has taken place and long-term capital gain of Rs.15,79,676 is claimed to have been earned from sale of equity shares of M/s. Quest Financial Services Limited and benefit under section 10(38) of the Act has been claimed in the sale of equity shares of this company.”
“This particular scrip finds mention in the list of “bogus capital gain claims” information data provided by the Directorate of Investigation Wing. In this case also, there is abnormal increase in the prices from Rs.5 to 84.10 in a short span of 20 months and company has poor financials.”
“I, therefore, respectfully following the ratio laid down by the Jurisdictional High Court in the case of Swati Bajaj confirm the additions made by the Assessing Officer in respect of bogus long-term capital gain/bogus loss” the Tribunal ruled.
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