The DCIT, Circle-11, Ahmedabad V. Shri Rajesh Omprakash Agrawal, Ahmedabad

ITA 110/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1944 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 09-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 10-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Assessee Lawyers: PF JAIN
• Keywords: Unexplained investment; Audit objection; Tax effect

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO. 109/AHD/2013 / ASSESSMENT YEAR: 2008-09 THE DCIT, CIRCLE-11, AHMEDABAD VS. SHRI OMPRAKASH H. AGRAWAL, 228, NEW CLOTH MARKET, O/S. RAIPUR GATE, AHMEDABAD PAN : AASPA 9038 N ./ ITA NO. 110/AHD/2013 / ASSESSMENT YEAR: 2008-09 THE DCIT, CIRCLE-11, AHMEDABAD VS. SHRI RAJESH OMPRAKASH AGRAWAL, 228, NEW CLOTH MARKET, O/S. RAIPUR GATE, AHMEDABAD PAN : AAWPP 5701 A / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI NARENDRA SINGH, SR. DR. ASSESSEE BY : SHRI P.F. JAIN, AR !'# / DATE OF HEARING : 09/03/2016 / DATE OF PRONOUNCEMENT: 01/04/2016 / O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER: THESE TWO APPEALS BY THE REVENUE ARE DIRECTED AGAIN ST RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS)- XVI, AHMEDABAD OF EVEN DATED 10.10.2012 PASSED FOR ASSESSMENT YEAR 20 08-09 IN RESPECT OF TWO DIFFERENT ASSESSEES. SINCE BOTH THESE APPEALS INVOL VE COMMON ISSUES, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. IN ITA NO.109/AHD/2013, THE REVENUE HAS TAKEN FO LLOWING GROUNDS OF APPEAL:- ITA NOS. 109 & 110/AHD/2013 DCIT VS. SHRI OMPRAKASH AGARWAL & RAJESH AGARWAL FOR AY: 2008-09 2 (1) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN D ELETING THE ADDITION OF RS.25,15,859/- BEING UNEXPLAINED INVESTMENT IN SHAR ES, WITHOUT PROPERLY APPRECIATING THE FACTS THAT THE ASSESSEE FAILED TO ESTABLISH WITH SUBSTANTIAL MATERIAL THE ACQUISITION OF SHARES. (2) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN N OT CONSIDERING THAT ASSESSEE FAILED TO COMPLY WITH THE GUIDELINES IN SE BI'S CIRCULAR REGARDING OBTAINING / LENDING IN FORM OF SHARES THROUGH DEMAT ACCOUNT. (3) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS REST RICTING THE ADDITION TO RS.5,538/-AND DELETING ADDITION TO THE EXTENT OF RS .2,17,821/- ON ACCOUNT OF INTEREST PAID ON DEBIT BALANCE OF THE CAPITAL ACCOU NT FOR PERSONAL USE WITHOUT ANY FINDING AND WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HIMSELF BEFORE APPELLATE AUTHORITY CONVEYED FOR DISALLOWANCE BEING ATTRIBUTABLE TO PERSONAL PURPOSES WHICH PROVES THAT DEBIT BALANCE OF CAPITAL ACCOUNT WERE UTILIZED BY THE ASSESSEE FOR THE PURPOSES OTHER THAN BUSINESS P URPOSE. (4) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. (5) IT IS THEREFORE PRAYED THAT THE ORDER OF THE L D. CIT(A) MAY BE SET ASIDE AND THAT OF THE ORDER OF THE ASSESSING OFFICER BE RE STORED TO THE ABOVE EXTENT. 3. IN ITA NO.109/AHD/2013, THE REVENUE HAS RAISED F OLLOWING GROUNDS OF APPEAL:- (1) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN D ELETING THE ADDITION OF RS. 13,37,826/- ON TRANSFER OF SHARES, WITHOUT CONS IDERING THE FINDINGS OF THE A.O. (2) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT CONSIDERING THAT ASSESSEE FAILED TO ESTABLISH THE PURPOSE OF LOANS B EING GIVEN IN FORM OF SHARES TO ANOTHER PERSON EITHER BEFORE THE ASSESSING OFFICE R OR DURING APPELLATE PROCEEDINGS. (3) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN D ELETING THE ADDITION OF RS.7,69,290/- BEING THE EXCESSIVE LOSS CLAIMED ON S HARE TRANSACTIONS MERELY BASED UPON THE WORKING OF NET LOSS FURNISHED BY ASS ESSEE IN RESPECT OF SHARE TRADING ACTIVITY, WITHOUT CONSIDERING THE FACT THAT ASSESSEE GROSSLY FAILED TO FURNISH BEFORE THE ASSESSING OFFICER THE DETAILS REL ATING TO INCURRING OF LOSS ON THE SHARE TRANSACTIONS. ITA NOS. 109 & 110/AHD/2013 DCIT VS. SHRI OMPRAKASH AGARWAL & RAJESH AGARWAL FOR AY: 2008-09 3 (4) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. (5) IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD . CIT(A) MAY BE SET ASIDE AND THAT OF THE ORDER OF THE ASSESSING OFFICER BE RE STORED TO THE ABOVE EXTENT. 4. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSE SSEE CONTENDED THAT AS PER CENTRAL BOARD OF DIRECT TAXES CIRCULAR NO. 21/2 015 IN F.NO.279/MISC. 142/2007-ITJ (PT) DATED 10TH DECEMBER 2015, THE REVI SED LIMIT FOR PREFERRING REVENUE'S APPEALS IS RS. 10 LACS. HE SUBMITTED THA T THE TAX EFFECT OF EACH OF THE PRESENT REVENUES APPEAL IS BELOW THE PRESCRIBE D LIMIT OF RS. 10 LACS, I.E., RS.3,56,433/- IN THE CASE OF OMPRAKASH H. AGARWAL A ND RS.7,03,585/- IN THE CASE OF RAJESH OMPRAKASH AGARWAL. LD. COUNSEL FOR T HE ASSESSEE HAS ALSO SUBMITTED A WORKING OF THE TAX EFFECT IN EACH OF TH E CASE. HE, THEREFORE, PLEADED THAT IN VIEW OF THE CBDT CIRCULAR, BOTH THE SE REVENUE'S APPEALS MAY BE DISMISSED AS THE TAX EFFECT BEING BELOW THE PRESCRIBED LIMIT. 3. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CO NTROVERT THE AFORESAID SUBMISSIONS OF THE LD. COUNSEL FOR THE AS SESSEE. 4. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL PLACED BEFORE US. WE FIND THAT THE APPEALS OF THE REVENUE ARE NO T MAINTAINABLE IN VIEW OF CBDT CIRCULAR NO. 21/2015 IN F.NO.279/MISC. 142/200 7-ITJ (PT) DATED 10TH DECEMBER 2015, VIDE WHICH IT HAS BEEN PROVIDED THAT IF THE TAX EFFECT BY VIRTUE OF THE COMMISSIONER OF INCOME-TAX (APPEALS) S ORDER IS BELOW RS. 10 LAKHS, THEN THAT ORDER WOULD NOT BE CHALLENGED BEFO RE THE TRIBUNAL IN FURTHER APPEAL. THE BOARD HAS PROVIDED EXEMPTIONS AT CLAUSE (8) OF THE INSTRUCTIONS WHEREIN IT HAS BEEN PROVIDED THAT THES E INSTRUCTIONS WILL NOT BE APPLICABLE, IF VIRES OF ANY PROVISIONS HAS BEEN QUA SHED BY IMPUGNED ORDER OR ADDITION WAS MADE ON SOME AUDIT OBJECTIONS OR THE ADDITION RELATES TO UNDISCLOSED FOREIGN ASSETS/BANK ACCOUNTS, ETC. WE FIND THAT THE PRESENT CASES DO NOT FALL WITHIN THE EXEMPTION CLAU SE AND THE TAX IS LESS THAN ITA NOS. 109 & 110/AHD/2013 DCIT VS. SHRI OMPRAKASH AGARWAL & RAJESH AGARWAL FOR AY: 2008-09 4 RS. 10 LAKHS. IT IS FURTHER OBSERVED THAT SINCE, W HILE HEARING THE APPEAL, SUCH FACTORS WERE NOT CONSIDERED, THEREFORE, IN CASE, ON RE-VERIFICATION AT THE END OF THE ASSESSING OFFICER, IT CAME TO THE NOTICE THA T THE TAX EFFECT IS MORE OR IT FALLS WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN TH E INSTRUCTION, THEN THE DEPARTMENT WILL BE AT LIBERTY TO APPROACH THE TRIBU NAL FOR RECALL OF THIS ORDER. SUCH APPLICATION SHOULD BE FILED WITHIN FOU R YEARS OF THIS ORDER. IN VIEW OF THE ABOVE, THE APPEALS OF THE REVENUE ARE D ISMISSED. 5. IN THE RESULT, BOTH THE APPEAL FILED BY THE REVE NUE ARE DISMISSED IN LIMINE. ORDER PRONOUNCED IN THE COURT ON 1 ST APRIL, 2016 AT AHMEDABAD. SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER AHMEDABAD; DATED 01/04/2016 BIJU T., PS !&''()(*' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! ' # / CONCERNED CIT 4. ' # ( ) / THE CIT(A) 5. &'( ! , ! , / DR, ITAT, AHMEDABAD 6. (- ./ / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD