Narender Kumar Gupta HUF , Hyderabad V. Asst. Commissioner of Income Tax, Circle-7(1), Hyderabad

ITA 1084/Hyd/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6185 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-04-2021
• Assessment Year: 2011-2012
• Appeal Filed On: 02-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBRAMANYAM TOTA
• Keywords: Penny stocks; Reason to believe
• Section: 69B; 148; 6

Judgement Text

ITA NO 1084 OF 2019 NARENDER KUM AR GUPTA HUF HYDERABAD PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.1084/HYD/2019 ASSESSMENT YEAR: 2011-12 SRI NARENDER KUMAR GUPTA HUF, HYDERABAD PAN:AABHN1491F VS. ASSTT. CIT CIRCLE 7(1) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI SIDDHARTH MANTRI REVENUE BY : SRI SUBRAMANYAM TOTA, DR DATE OF HEARING: 08/04/2021 DATE OF PRONOUNCEMENT: 22/04/2021 ORDER THIS IS ASSESSEES APPEAL FOR THE A.Y 2011-12 AGAIN ST THE ORDER OF THE CIT (A)-3, HYDERABAD, DATED 20.05 .2019, 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN HUF AND FILED ITS RETURN OF INCOME (IN HUF CAPACITY) FO R THE A.Y 2011- 12 ON 30.12.2011 DECLARING AN INCOME OF RS.6,38,150 /- COMPRISING OF INCOME FROM OTHER SOURCES OF RS.6,0 6,274/- AND INCOME FROM HOUSE PROPERTY OF RS.1,26,000 AND CLA IMED CHAPTER VIA DEDUCTION OF RS.94,120/-. 3. MEANWHILE, THE ASSESSING OFFICER HAD RECEIVED INFORMATION FROM THE INVESTIGATION WING, KOLKATA TH AT THE ASSESSEE HAS PURCHASED 70,000 SHARES OF THE FOLLOWI NG PENNY SCRIPTS FOR A TOTAL VALUE OF RS.12,77,500/- DURING THE FINANCIAL YEAR 2010-11 RELEVANT TO THE A.Y 2011-12: A) M/S. GOLDEN BULL RESEARCH & GROWTH LTD ITA NO 1084 OF 2019 NARENDER KUM AR GUPTA HUF HYDERABAD PAGE 2 OF 5 B) M/S. REGENCY TRUST LTD C) M/S. GLOBAL CAPITAL MARKETS LTD 3.1 AS PER THE REPORT OF THE INVESTIGATION WING, KO LKATA, THE ABOVE PENNY STOCKS ARE USED FOR GENERATING BOGU S LTCG/STCL AND BUSINESS LOSS. IN VIEW OF THE SAME, T HE ASSESSING OFFICER WAS OF THE OPINION THAT THE INCOME OF THE A SSESSEE HAD ESCAPED THE ASSESSMENT AND THEREFORE, HE ISSUED NOT ICES U/S 148 OF THE ACT TO THE ASSESSEE. INSPITE OF SEVERAL NOTI CES GIVEN TO THE ASSESSEE, NONE APPEARED FOR THE ASSESSEE EXCEPT FOR FILING A REPLY DATED 24.12.2018 AND FURNISHING OF RETURN OF INCOME , BANK A/C COPIES AND SOURCES OF PAYMENT I.E. WITHDRAWAL FROM M/S JITENDER ROLLER FLOUR MILLS, A PARTNERSHIP FIRM WHERE KARTA OF HUF IS ONE OF THE THREE PARTNERS. THE ASSESSING OFFICER OBSERVED THAT THOUGH THE ASSESSEE HAS STATED THAT HE HAS FURNISHED THE S OURCES OF INVESTMENT AND THE SHARES WERE ACQUIRED THROUGH SEB I APPROVED BROKER ON PLATFORM OF RECOGNIZED STOCK EXCHANGE, TH E INVESTIGATION REPORT RECEIVED FROM THE PMO CLEARLY STATED THAT TH ESE PENNY STOCK COMPANIES ARE BEING USED FOR GENERATING BOGUS LTCG/STCL TO SPECIFIC CLIENTS. THUS, OBSERVING, THE ASSESSING OFFICER TREATED THE TOTAL INVESTMENT OF RS.12,77,500/- AS UNEXPLAIN ED INVESTMENT U/S 69B OF THE ACT AND BROUGHT IT TO TAX. ONE OF TH E GROUNDS RAISED BY THE ASSESSEE WAS THAT THE ASSESSEE WAS NO T PROVIDED WITH THE REASONS FOR REOPENING AND ALSO THAT THE IS SUANCE OF THE NOTICE U/S 148 AFTER 6 YEARS FROM THE END OF THE RE LEVANT A.Y IS BAD IN LAW AS THERE IS NO REASON TO BELIEVE ANY CON CEALMENT OF INCOME. 3.2 AS REGARDS THE GROUNDS AGAINST VALIDITY OF RE- ASSESSMENT PROCEEDINGS, THE CIT (A) OBSERVED THAT T HE ASSESSEE HAS PARTICIPATED IN THE PROCEEDINGS AND THEREFORE, THE PROVISIONS