ITAT overturns ₹1.2 Crore Income Tax Additions from Penny Stock Sale, vitiates Presumption of ‘Human Probabilities’

The Income Tax Appellate Tribunal has overturned Rs. 1.2 crore in tax additions from penny stock sales, citing violation of human probability principles. The tribunal found insufficient evidence to support the tax department's allegations of artificial transactions. This decision emphasizes the need for concrete evidence in establishing tax evasion through penny stocks. The ruling provides guidance on evaluating stock market transactions for tax purposes. The case highlights the importance of reasonable assessment approaches in tax matters.