No Evidence of Price Rigging: Calcutta HC Dismisses Income Tax Dept Appeal in Rs. 71L Penny Stock Loss Case

The Calcutta High Court has dismissed an appeal filed by the income tax department in a case involving ₹71 lakh related to transactions in penny stocks. The court upheld the findings of the lower tax authorities, stating that there was no concrete evidence presented to substantiate the department's allegations of price rigging or manipulation in the trading of these penny stocks. The judgment serves to prevent tax authorities from making arbitrary additions to income based solely on the inherent volatility of penny stock prices, without providing any substantive proof of deliberate manipulation or illegal activities aimed at inflating stock values for tax avoidance purposes.