MUMBAI: Investors holding penny stocks have got a reprieve from the Income-Tax Tribunal. The body has ruled that gains from penny stocks cannot be termed as bogus just because the Securities and Exchange Board of India (Sebi) is probing into possible irregularities in these stocks. Recently, investors who have tried to claim the benefit of longterm capital gains from penny stocks, have come under the radar of tax officials. "If payment is by cheque and delivery of shares is taken, then long-term capital gains tax cannot be treated as bogus," the tribunal said. The tribunal's ruling was on a case where the assessee had shown sale proceeds of shares in the scrip Ramkrishna Fincap as a long-term capital gain and claimed exemption. Further, the assessee had claimed to have purchased this scrip at Rs 3.12 per share in 2003 and sold it for Rs 155.04 per share in 2005. Tax officials found the scrip to be a penny stock and held the capital gains only as 'accommodation entries.' "It is often noticed that tax officials generalise their view towards different matters but the tribunal order in this matter reiterates that investigation into penny stocks cannot necessarily mean that all transactions are bogus. The nature of the transaction does not change just because there is an investigation or because it is a penny stock," said Ram Upadhyay, senior advocate, who fought cases for the Mumbai income-tax department. Broker Basamt Periwal and Co, through whom the transactions were carried out, was being probed by the Directorate of Revenue...