Smt.Nirmala Pathak, Katni V. Assistant Commissioner of Income Tax, Circle-Katni

CO 2/JAB/2020

• Counselvise Citation: [2020] 109 COUNSELVISE.COM (IT) 9528 (ITAT-JABALPUR)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 31-12-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 24-02-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: I B KHANDEL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR BEFORE SHRI NRS GANESAN, JUDICIAL MEMBER & SANJAY ARORA, ACCOUNTANT MEMBER ITA NO.02/JAB/2020 ASSESSMENT YEAR 2014-15 ASST.CIT CIRCLE- KATNI, JHINJHRI KATNI (M.P.)- 483501. VS. SMT. NIRMALA PATHAK, PATHAK WARD-1, SHANTI BHAWAN, KATNI (M.P.)-483501. (PAN : AGIPP 6026B) (APPELLANT ) (RESPONDENT) C.O. NO.2/JAB/2020 ASSESSMENT YEAR 2014-15 SMT. NIRMALA PATHAK, PATHAK WARD-1, SHANTI BHAWAN, KATNI (M.P.)-483501. (PAN : AGIPP 6026B) VS. ASST.CIT CIRCLE- KATNI, JHINJHRI KATNI (M.P.)- 483501. (APPELLANT ) (RESPONDENT) APPELLANT BY SHRI I.B. KHANDEL, SR.DR RESPONDENT BY SHRI DHIRAJ GHAI, C.A. DATE OF HEARING 30/12/2020 DATE OF PRONOUNCEMENT 31/12/2020 ORDER PER BENCH: THIS APPEAL OF THE REVENUE AND CROSS APPEAL BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOM E TAX (APPEALS)-1, JABALPUR [FOR SHORT, THE CIT(A)] DATED 09.10.29019 AND PERTAINS TO ASSESSMENT YEAR 2014-15. ITA NO. 02 & C.O. 2 JAB 2020-SMT. NIRMALA PATHAK 2 2. SHRI I.B. KHANDEL, LD. DEPARTMENTAL REPRESENTATI VE (DR) FOR THE REVENUE SUBMITTED THAT THE ASSESSING OFFICER MADE A DDITION OF RS. 98,34,260/- TOWARDS THE LONG TERM CAPITAL GAIN (LTC G). THE ASSESSEE PURCHASED 54000 SHARES TO CCL INTERNATIONAL. ACCORD ING TO THE LD. REPRESENTATIVE, THE PRICE OF THE SHARES WERE MANIPU LATED FOR CLAIMING CAPITAL GAIN OR LOSS. SINCE THE ASSESSEE HAS NOT FU RNISHED ANY DETAILS IN THIS REGARD, THE ASSESSING OFFICER HAS TAKEN THE LTCG/SH ORT TERM CAPITAL GAIN (STCG) AT RS. 98,34,260/-. IN THE REMAND REPOR T FILED BEFORE THE CIT(A) DURING THE APPELLATE PROCEEDING, THE ASSESSI NG OFFICER FOUND THAT THERE IS NO TRANSACTION OF SALE OF SHARES DURING TH E ASSESSMENT YEAR 2014- 15. THE CIT(A) MISTAKEN THE WHOLE CAPITAL GAIN OF R S. 1,99,81,750/-. ACCORDING TO LD. REPRESENTATIVE, CCL INTERNATIONAL WAS A PENNY STOCK COMPANY THEREFORE, THE CIT(A) OUGHT NOT TO HAVE ALL OWED THE CLAIM OF THE ASSESSEE. ON A QUERY FROM THE BENCH HOW THE SECOND GROUND OF APPEAL WITH REGARD TO 50,30,000/- ON ACCOUNT OF UNEXPLAINED INV ESTMENT ARISES FOR CONSIDERATION WHEN NO SUCH ADDITION WAS MADE BY THE ASSESSING OFFICER, THE LD. DR SUBMITTED THAT THE SOURCE OF INVESTMENT TO THE EXTENT OF RS. 50,30,000/- WAS NOT EXPLAINED, THEREFORE, THE REVEN UE HAS TAKEN THAT GROUND ALSO. 3. ON THE CONTRARY, SHRI DHIRAJ GHAI, THE LD. REPRE SENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE PURCHASED THE SHARES IN TWO ITA NO. 02 & C.O. 2 JAB 2020-SMT. NIRMALA PATHAK 3 ASSESSMENT YEARS I.E. A.Y.2014-15 & 2015-16 FOR RS. 98,34,260/-. THE ASSESSEE HAS PURCHASED THE SHARES TO THE EXTENT OF RS. 50,30,000/- DURING THE YEAR 2014-15. THE ASSESSING OFFICER CALLED FOR EXPLANATION WITH REGARD TO SOURCE OF INVESTMENT FOR THE YEAR UNDER CONSIDER ATION I.E. 2014-15. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THA T 54,000 SHARES OF CCL INTERNATIONAL WAS PURCHASED FOR RS. 50,31,000/-. TH E PAYMENTS WERE MADE THROUGH BANKING CHANNEL. THE ASSESSEE INFACT PAID A SUM OF RS. 25,00,000/- ON 24.12.2013 AND ANOTHER SUM OF RS. 25 ,000/- ON 28.12.2013, THE BALANCE AMOUNT OF RS. 31,000/- WAS PAID ON 29.0 1.2014. ALL PURCHASES AND PAYMENTS WERE MADE FOR THE A.Y.2014-15. ACCORDI NG TO LD. REPRESENTATIVE, THERE WAS NO SALE OF SHARE DURING T HE YEAR UNDER CONSIDERATION. AS ON 31.03.2014 ONLY INVESTMENTS WE RE MADE. ACCORDING TO LD. REPRESENTATIVE SINCE THERE WAS NO SALE OF SH ARES TILL 31.03.2014, THERE IS NO QUESTION OF ANY CAPITAL GAIN OR CAPITAL LOSS ARISES FOR CONSIDERATION. INFACT THE ASSESSEE IS ALSO NOT CLAIMING ANY CAPITA L GAIN OR CAPITAL LOSS. THE LD. REPRESENTATIVE FOR THE ASSESSEE FURTHER SUBMITT ED THAT AFTER CALLING FOR THE SOURCE FOR MAKING INVESTMENT FOR THE YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER ACCEPTED THE EXPLANATION OF THE A SSESSEE. INFACT, THE ASSESSING OFFICER REPRODUCED THE EXPLANATION OF THE ASSESSEE AT PAGE-5 OF HIS ORDER, ACCEPTED THE EXPLANATION, AND THERE WAS NO ADDITION WAS MADE. ITA NO. 02 & C.O. 2 JAB 2020-SMT. NIRMALA PATHAK 4 THEREFORE, IT IS NOT CORRECT TO CONTEND FOR THE REV ENUE THAT THE SOURCE OF INVESTMENT WAS NOT EXPLAINED. 4. THE LD. REPRESENTATIVE FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE SOLD THE ENTIRE SHARES DURING THE A.Y.2015 -16 AND CLAIMED EXEMPTION UNDER SECTION 10(38) OF THE ACT. SUBSEQUE NTLY, THE ASSESSEE DECLARED THE LTCG OF RS. 1,93,91,750/- UNDER THE IN COME DECLARATION SCHEME 2016 AND PAID THE ENTIRE TAXES. ACCORDING T O LD. REPRESENTATIVE, IF AT ALL ANY DISALLOWANCE THAT MAY BE MADE FOR THE A. Y.2015-16 AND NOT FOR A.Y.2014-15. FURTHERMORE THERE CANNOT BE ANY ADDITI ON FOR A.Y.2015-16 ALSO, SINCE THE ASSESSEE PAID THE TAXES AFTER DECLA RING THE LTCG UNDER THE INCOME DECLARATION SCHEME, 2016. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION ON EITHE R SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ONLY ISSUE ARISES FOR CONSIDERATION IS ASSESSMENT OF LONG TERM/SHORT TERM CAPITAL GAIN OF RS. 98,34,260/-. THE REVENUE HAS ALSO TAKEN A GROUND WI TH REGARD TO INVESTMENT IN THE SHARES TO THE EXTENT OF RS. 50,30 ,000/-. DURING THE YEAR UNDER CONSIDERATION, THE MATERIAL AVAILABLE ON RECO RD CLEARLY DISCLOSES THAT THE ASSESSEE HAS INVESTED IN THE SHARE OF CCL INTER NATIONAL TO THE EXTENT OF RS. 50,31,000/-. THE ASSESSEE HAS NOT SOLD ANY SHAR ES DURING THE YEAR UNDER CONSIDERATION, THEREFORE, THERE IS NO QUESTION OF A NY CAPITAL GAIN/CAPITAL LOSS ARISES FOR CONSIDERATION. THE SOURCE OF INVEST MENT WAS EXPLAINED BY ITA NO. 02 & C.O. 2 JAB 2020-SMT. NIRMALA PATHAK 5 THE ASSESSEE BEFORE THE ASSESSING OFFICER AND THE A SSESSING OFFICER ACCEPTED SOURCE AND NO ADDITION WAS MADE. THEREFORE , AS RIGHTLY SUBMITTED BY THE LD. REPRESENTATIVE FOR THE ASSESSEE IT CANNO T BE SAID THAT THE SOURCE OF INVESTMENT TO THE EXTENT OF RS. 50,31,000/- WAS NOT EXPLAINED. NOW THE ASSESSEE CLAIMS THAT THE TOTAL PURCHASE OF SHARES T O THE EXTENT OF RS. 98,34,260/- WAS FOR TWO AYS. THIS FACT IS ADMITTED BY THE ASSESSING OFFICER. IN OTHER WORDS, THE PURCHASES OF SHARES OF CCL INTERNATIONAL BY THE ASSESSEE WAS DURING THE A.Y.2014-15 AND 2015-16 . THIS IS VERY OBVIOUS FROM THE REMAND REPORT FILED BY THE ASSESSI NG OFFICER BEFORE CIT(A). THE SCRUTINY REPORT FILED BY THE ASSESSING OFFICER, THE COPY OF WHICH IS PRODUCED BEFORE THE LD. DR CLEARLY READS A S UNDER: IT IS CORRECT THAT A SUM OF RS. 98,34,260/- PURCHA SED BY THE ASSESSEE OF THE SCRIPT CCL ENTERPRISES IN TWO A.YRS. AND SOLD IN A. Y. 2015-16. HENCE, THE ASSESSEE DID NOT HAVE ANY CAPITAL LOSS DURING THE Y EAR UNDER CONSIDERATION I.E. A.Y. 2014-15. AS PER RECORD FOR THE A.Y. 2015- 16 ASSESSEE HAS DECLARED RELEVANT CAPITAL GAIN IN CCL SHARES UNDER INCOME DECLARATION SCHEME 2016 AMOUNTING TO RS. 1,93,91,750/- UNDER UN VERIFIABLE CAPITAL GAIN AND PAID TAX THERE UPON. 6. FROM THE ABOVE OBSERVATION IN THE SCRUTINY REPOR T, THE COPY OF WHICH IS AVAILABLE ON RECORD, CLEARLY INDICATE THAT THERE WAS NO CAPITAL GAIN ARISES FOR A.Y.2014-15. FOR THE A.Y. 2015-16, THE ASSESSE E SOLD THE SHARES AND DECLARED THE SAME UNDER INCOME DECLARATION SCHEME, 2016 AND PAID THE TAXES. IN SUCH CIRCUMSTANCES, THIS TRIBUNAL IS OF T HE CONSIDERED OPINION THAT ITA NO. 02 & C.O. 2 JAB 2020-SMT. NIRMALA PATHAK 6 THE CIT(A) HAS RIGHTLY DELETED THE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY R EASON TO INTERFERE WITH THE ORDER OF CIT(A). ACCORDINGLY, THE SAME IS CONFI RMED. 7. NOW COMING TO THE C.O. OF THE ASSESSEE, THE SAME IS FILED ONLY TO SUPPORT THE ORDER OF CIT(A). SINCE, THE ORDER OF CI T(A) IS CONFIRMED ON MERIT, THE C.O. BECOME INFRUCTUOUS. 8. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE AN D C.O. OF THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 31 ST 2020. SD/- SD/- - (SANJAY ARORA) (N.R.S.GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31/12/2020 //TRUE COPY// SK/ P.S.