Section 10(38), 45, 68 of Income Tax Act, 1961—Capital gains - When there was specific confirmation with the Revenue that the assessee has indulged in non-genuine and bogus capital gains obtained from the transactions of purchase and sale of shares, it can be a good reason to treat the transactions as bogus.

Facts: Return of assessee was selected for scrutiny. Assessee had booked LTCG of Rs. 73,77,806/- and sought exemption under Section 10 (38). AO made addition by denying the exemption claimed under Section 10 (38) on account of LTCG. AO found the transaction pertaining to purchase of shares by Assessee to be a bogus transaction by holding that company was a penny stock. Findings of fact in relation to the transaction being bogus were upheld by the CIT (Appeals). Tribunal upheld the order of CIT(A). Being aggrieved, assessee went on appeal before High Court.

Held that 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 Assessee are based on evidence on record. - SUMAN PODDAR V/s ITO - [2020] 423 ITR 480 (DELHI)