that the said M/s.Kailash Auto Finance
Ltd., was a Penny Stock Company, and required the assessee to
explain why the exemption claimed ... modus
operandi adopted was to buy shares of what was called Penny Stock
Companies at very nominal price through off-line transaction. Such
Penny Stock
were the subject matter of transaction were
referred to as "penny stocks" and the companies whose shares were traded
in the various stocks ... operandi has been set out in the report, the types of penny stocks
companies, the entities involved in the transactions, the different stages
Pr Commissioner Of Income Tax vs M/S Shri Mehndipur Balaji on 4 July, 2022
Penny Stock: is a stock that trades at a relatively
low price and market capitalization. These types of
stocks are generally considered to be highly ... spreads, small capitalization and limited
following and disclosure.
II. Penny stock companies:
Broadly speaking there are two types of Penny stock
companies
above.
o To have effective control over the shares of the penny stock companies,
the share capital of these penny stock companies is structured ... exempt income on account of sale of
shares of various listed penny stock companies other than M/s PIL in different
assessment years, the details
told that the share in which assessee had traded was a
penny stock and as per report of Investigation Wing of Kolkata, price ... Presha
Metallurgical Ltd. resemble the character of the penny stock done by
the bogus companies based at Kolkata. He, further took note of the fact
Penny stocks are those stocks
which trade at very low price and whose market
capitalisation is very low. The low price of the penny
stock ... Penny stocks are those
stocks which trade at very low price and whose market
capitalization is very low. The low price of the penny stock
Department, on the
ground of suspicious share transaction in penny stock. In the return of income, the
assessee has claimed exempt income ... make the beneficiary buy some shares of a pre-
determined Penny stock company controlled by them. These shares are
transferred to the beneficiary
proceeded to complete the assessment. He
discussed about the features of Penny Stocks which are as under :-
1. Most of these companies have no business ... connivance to ramp up the price of the
penny stock and provide exit option to the beneficiary.
6. Initial allotment of shares to beneficiaries
3248/Mum/2019
vi) Ignorance of the assessee about shares and penny
stock companies: Assessee has failed to show of
having any knowledge about ... exit providers who
artificially raise the prices of penny stocks on stock exchange.
Thereafter, the penny stocks are sold to earn huge exempt
LTCG
