Shri Ajai Agarwal, Lucknow V. Income Tax Officer-2(1), Lucknow

CO 29/LKW/2017

AI Insights

The case involves an appeal by the Income Tax Officer-2(1), Lucknow against the order of the CIT(A)-1, Lucknow, which had deleted an addition of Rs.1,53,28,548 to the income of Shri Ajai Agarwal for the assessment year 2014-15. The Revenue contended that the CIT(A) had erred in not making proper enquiries and in hurriedly passing the order without adhering to the provisions of section 250(4) of the I.T. Act. The CIT(A)'s decision was based on the grounds that the additions were made on the basis of a statement recorded during a survey operation under section 133A of the I.T. Act at the premises of M/s Kayan Securities Pvt. Ltd., Kolkata. The assessee, in response, had opted for settlement under the DTVSVA, leading to the resolution of the disputed tax and the subsequent withdrawal of both the appeal and the Cross Objection.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 113265 (ITAT-LUCKNOW)
• Duration Of Justice: 5 year(s) 8 month(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-06-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-06-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 02-10-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 6; 5(2); 133A; 143(2)

Judgement Text

I.T.A. No.558/Lkw/2017 C.O.No.29/Lkw/2017 Assessment year:2014-15 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH ‘B’, LUCKNOW BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER I.T.A. No.558/Lkw/2017 Assessment Year: 2014-15 Income Tax Officer-2(1), Lucknow. Vs. Shri Ajai Agarwal, A-705, Sector-C, Mahanagar, Lucknow. PAN:AEGPA2477K (Appellant) (Respondent) C.O. No.29/Lkw/2017 (in I.T.A. No.558/Lkw/2017) Assessment Year: 2014-15 Shri Ajai Agarwal, A-705, Sector-C, Mahanagar, Lucknow. PAN:AEGPA2477K Vs. Income Tax Officer-2(1), Lucknow. (Appellant) (Respondent) O R D E R PER BENCH: (A) The appeal vide I.T.A. No.558/Lkw/2017 has been filed by the Revenue for assessment year 2014-15 against impugned appellate order dated 28/02/2017 of learned CIT(A). The grounds of appeal are as under: Revenue by Shri Amit Nigam, D.R. Assessee by None Date of hearing 22/06/2023 Date of pronouncement 27/06/2023 I.T.A. No.558/Lkw/2017 C.O.No.29/Lkw/2017 Assessment year:2014-15 2 “1. In the facts and circumstances of the case, the Ld. CIT(A)-1, Lucknow has erred in coming to the conclusion that the Assessing Officer has not made proper enquiries independently and in turn passed the appellate order in a hurried manner without taking recourse to the provisions of the section 250(4) of the I.T. Act, according to which the CIT(A) may make further enquiries as he thinks fit or may direct the assessing officer in making further enquiries in the matter. 2. In the facts and circumstances of the case, the Ld. CIT(A)-1, Lucknow has erred in deleting the addition of Rs.1,53,28,548/- on completely ignoring the fact that the additions was made by the A.O. on the basis of statement recorded during the survey operation u/s 133A of the I.T. Act. 1961 at the premises of office of M/s Kayan Securities Pvt. Ltd., 1 R.N. Mukherjee Road, Kolkata. 3. In the facts and circumstances of the case, the Ld. CIT(A)-1, Lucknow has overlooked the fact that the prices of the shares were rigged and artificially jacked up by doing act of fabrication/malpractice and were executed in a planned manner. 4. In the facts and circumstances of the case, the Ld. CIT(A)-1, Lucknow has failed to appreciate the fact that SEBI has passed several orders where it has highlighted the process through which bogus entries are passed in connivance with the share brokers were involved in dubious trading. 5. In the facts and circumstances of the case Ld. CIT(A) has failed to appreciate the fact that the assessing officer, while disallowing the exemption u/s 10(38) of the I.T. Act primarily relied on the fact that all transacted scripts were procured by the assessee outside the recognized stock exchange. SEBI has also suspended trading in various scripts of such penny stock companies including the script of M/s Kailash Auto Finance Ltd.” (B) The appellant assessee has filed letter dated 17/04/2023, stating as under: I.T.A. No.558/Lkw/2017 C.O.No.29/Lkw/2017 Assessment year:2014-15 3 “The aforesaid appeal (filed by the Revenue) and C.O. (filed by the assessee) had been adjourned sine die as the legal issues challenging the validity of notice u/s 143(2) raised by the assessee in the Cross Objection were decided by the Hon'ble ITAT to be referred to a Special Bench. 2. Subsequently, after the enactment of the Direct Tax Vivad Se Vishwas Act, 2020 (DTVSVA) the assessee opted for settlement of tax arrear, involved in the captioned appeal, under the said Act. 3. The disputed tax has since been settled by the assessee under the DTVSVA and Form-5, dated 06-Dec-2021 being the order for full and final settlement of tax arrear u/s 5(2) read with section 6 of the DTVSVA, has been issued by the Pr. CIT, vide acknowledgement no. 989563361061221. 4. As the disputed tax under the Departmental Appeal No. 558/LKW-2017 has been settled under the DTVSVA-2020, the said appeal is deemed to have been withdrawn by the Revenue as per sub-section (2) of Section 4 of the said Act. 5. Since the captioned appeal itself has been settled under DTVSVA-2020, the above mentioned Cross Objection filed by the assessee has become infructuous. The assessee, therefore, begs to with-draw the said Cross Objection as withdrawn. PRAYER 6. In view of submission made hereinfore, it is most humbly prayed that an appropriate order may kindly be passed dismissing the aforesaid appeal as well as Cross Objection as withdrawn.” (B.1) It was submitted by learned D.R. for the Revenue that since the assessee has opted for VSVS, the appeal filed by the Department may be dismissed as withdrawn. Further, he submitted that the Cross Objection filed by the assessee may be dismissed as the Cross Objection has become infructuous after settlement of the disputes under VSVS. In view of the foregoing, and as both sides are in agreement with this; appeal filed by the I.T.A. No.558/Lkw/2017 C.O.No.29/Lkw/2017 Assessment year:2014-15 4 Revenue and Cross Objection filed by the assessee, both are dismissed as withdrawn. (C) In the result, the appeal of the Revenue and Cross Objection of the assessee stand dismissed. (Order pronounced in the open court on 27/06/2023) Sd/. Sd/. (SUDHANSHU SRIVASTAVA) (ANADEE NATH MISSHRA) Judicial Member Accountant Member Dated:27/06/2023 *Singh Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. D.R., I.T.A.T. 5. CIT(A) Assistant Registrar