# Woman's shares surge 2000% but IT rejects tax exemption

> Mumbai investor's Rs 4.41 lakh shares jumped to Rs 92 lakh in 16 months, but Income Tax department rejected the gains as fake.
- Title: Woman's shares surge 2000% but IT rejects tax exemption
- Summary: Mumbai investor's Rs 4.41 lakh shares jumped to Rs 92 lakh in 16 months, but Income Tax department rejected the gains as fake. Income Tax Appellate Tribunal…
- Keywords: sandhya rakesh sharma, income tax department, mumbai, santoshimaa tradelinks ltd, sunrise asian ltd, itat mumbai, tax exemption, penny stock, sebi, rs 92 lakh, rs 4.41 lakh, long term capital gains
- Source: Financialexpress — https://financialexpress.com/money/womans-rs-21-shares-soar-to-rs-488-in-16-months-it-rejects-2000-gains-rs-95-lakh-tax-4369685
- Author: Mithilesh Jha
- Published: 2026-10-26T11:40:55+00:00
- Read time: 1 min
- Topics: sandhya rakesh sharma, income tax department, mumbai, santoshimaa tradelinks ltd, sunrise asian ltd, itat mumbai, tax exemption, penny stock, sebi, rs 92 lakh, rs 4.41 lakh, long term capital gains
## Investor's claim
A Mumbai investor bought shares for rs 4.41 lakh in november 2012 and sold them for rs 92 lakh in 16 months.
## Tax department's rejection
Income Tax department treated the gains as bogus, adding rs 94.79 lakh in tax.
## Investor's argument
Sharma claimed the profit was long-term capital gains exempt under section 10(38) of the Income Tax Act.
## Penny stock suspicion
ITAT Mumbai suspected penny stock manipulation to generate artificial tax-free capital gains.
## Share price history
Shares bought at rs 21 per share rose to rs 488.50 per share in 16 months.
## SEBI findings
SEBI imposed a rs 1 crore penalty on Sunrise Asian Ltd and barred directors from the securities market for one year.
## Investor's documents
Sharma submitted bank statements, demat records, and stock exchange contract notes.
## Tribunal's decision
ITAT Mumbai upheld the tax additions, citing lack of evidence for genuine transactions.
## Why transactions were fake
The share price rose without company financial improvement, low trading volume, and SEBI findings.
## Tax additions breakdown
Rs 92.03 lakh sale proceeds treated as unexplained cash credit, plus rs 2.76 lakh commission.
## Investor's non-compliance
Sharma did not appear for summons and failed to respond to notices from exit providers.
## What this means
Investors must maintain records and respond to tax notices to avoid similar issues.
## Tax implications
High returns from small companies may attract scrutiny if financial performance doesn't support the price rise.
## Expert advice
Dinkar Sharma recommends explaining investment, price movement, and fund sources with proper records.
## Key takeaway
The ruling applies only to assessment year 2014-15 and does not mean all penny stock investments are bogus.
## Key takeaway

Income Tax Appellate Tribunal upheld tax additions of Rs 94.79 lakh for Sandhya Rakesh Sharma's alleged penny stock manipulation.