New Delhi, Sept. 4 -- A multi-fold surge in the share price of a little-known company can easily attract the income tax department's attention, especially when the assessee is also not a regular trader. That is exactly what happened in the case of a Mumbai taxpayer whose Rs.12.62 lakh long-term capital gain (LTCG) exemption claim was denied over suspected price manipulation.

The taxpayer in question had sold part of his shareholding in 2014 after the stock price surged nearly 7800% over three years. He subsequently claimed the then-available LTCG exemption on the sale of listed shares.

After the tax department denied the exemption and scrutinised the transaction, the matter reached the Income Tax Appellate Tribunal (ITAT), Mumbai, which...