Penny Stock LTCG Vindicated

In a significant ruling on alleged penny stock transactions, the ITAT Mumbai in Mr. Jay Hansraj Chheda v. Income Tax Officer (ITA Nos. 2656 & 2631/Mum/2024) has reaffirmed that additions under Section 68 cannot rest on generalized suspicion or investigative reports alone. The Tribunal held that where share transactions are duly supported by demat records, contract notes, and banking channels, the burden shifts to the Revenue to establish a clear nexus with alleged accommodation entry operators. The decision underscores that suspicion cannot replace proof and reinforces evidentiary discipline in capital gains litigation.