Section 10(38), 45, 68 of Income Tax Act, 1961—Bogus Capital gain— The AO added the amount of Rs. 73,77,806/- by denying the exemption claimed under Section 10 (38) of the Act on account of LTCG. The Assessment Officer (AO) found the transaction pertaining to purchase of shares by the Appellant/Assessee of M/s Smartchamps IT and Infra Ltd., which was merged with M/s Cressanda Solutions Ltd., to be a bogus transaction by holding that M/s Cressanda Solutions Ltd. was a penny stock.

Held that— it would be seen that the Cressanda Solutions Ltd. was in fact identified by the Bombay Stock Exchange as a penny stock being used for obtaining bogus Long Term Capital Gain. NO evidence of actual sale except the contract notes issued by the share broker were produced by the assessee. No question of law, therefore arises in the present case and the consistent finding of fact returned against the Appellant are based on evidence on record.[SUMAN PODDAR VERSUS INCOME TAX OFFICER] [2019] 17 ITCD Online (39) [ DELHI HIGH COURT]