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Investigation wings use summons to examine trades in stocks flagged for price rigging. Genuine investors defend with documents showing a normal purchase, holding and sale through the exchange.
ITR
Summons about suspicious share or penny stock gains
Updated . Every paid answer is checked by a CA. Free AI answers are labelled until a CA verifies them.
Provisions
Sec 131, Income-tax Act 1961 (now Sec 246, Income-tax Act 2025); Sec 270A, Income-tax Act 1961 (now Sec 439, Income-tax Act 2025)
Analysis
Officers look at how you came to buy the stock, the payment trail and the sale. Example: you bought shares for ₹50,000 through your broker in 2020 and sold for ₹9 lakh in 2023. Show contract notes, demat holding statements and bank entries. Where gains are found to be bogus, they are taxed and misreporting penalty under Sec 270A (now Sec 439) can be 200% of the tax.
Close
- Collect contract notes, demat and bank statements for buy and sell
- Note why you bought the stock and from what information
- Prepare a short timeline
- Attend with your CA
- Get a copy of your statement
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