Bombay High Court’s Judgement on Reopening for Bogus Capital Gains from Penny Stocks

CASE: Gateway Leasing Pvt. Ltd vs. ACIT

COURT: Bombay High Court

CORAM: Milind D. Jadhav J, Ujjal Bhuyan J

SECTION(S): 10(38), 147, 148, 45

GENRE: Domestic Tax

COUNSEL: Jas Sanghvi, Madhur Agrawal, Suresh Kumar

DATE: March 11, 2020 (Date of pronouncement)

DATE: July 13, 2020 (Date of publication)

AY: 2012-13


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Section 147- Reopening for bogus capital gains from penny stocks: The Dept’s argument that though the assessee disclosed details of the transactions pertaining to purchase and sale of shares, it did not disclose the real colour / true character of the transactions and, therefore, did not make a full and true disclosure of all material facts which was also overlooked by the AO, is not correct. The assessee disclosed the primary facts to the AO & also explained the queries put by the AO. It cannot be said that the assessee did not disclose fully and truly all material facts necessary for the assessment.

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