Narendra Harlalka, CHENNAI V. ITO Non Corporate Ward 10(3), CHENNAI

ITA 1134/CHNY/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4710 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 16-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Assessee Lawyers: D ANAND
• Keywords: Wrong claim; Benefit of exemption

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI , , ' BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.1134/CHNY/2019 /ASSESSMENT YEAR: 2012-13 SHRI NARENDRA HARLALKA, C/O. M/S.PASS ASSOCIATES, UNIT NO.208, 2 ND FLOOR, BETA WING, RAHEJA TOWERS, NO.113-134, ANNA SALAI, CHENNAI-600 002. VS. THE INCOME TAX OFFICER, NON-CORPORATE WARD-10(3), CHENNAI. [PAN: AAPPH 5530 H ] ( ) /APPELLANT) ( *+) /RESPONDENT) ) , / APPELLANT BY : MR. D.ANAND, ADV. *+) , /RESPONDENT BY : MR. R.CLEMENT RAMESH- KUMAR, ADDL.CIT , /DATE OF HEARING : 05.08.2019 , /DATE OF PRONOUNCEMENT : 05.08.2019 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-12, CHENNAI, I N ITA NO.77/CIT(A)- 12/2017-18 DATED 22.03.2019 FOR THE AY 2012-13. 2. SHRI R.CLEMENT RAMESH KUMAR, ADDL.CIT, REPRESENTED ON BEHALF OF THE REVENUE AND SHRI D.ANAND, ADV., REPRESENTED ON BEHALF OF THE ASSESSEE. ITA NO.1134/CHNY/2019 :- 2 -: 3. IT WAS SUBMITTED BY THE LD.AR THAT THE AO HAS TREA TED THE TRANSACTIONS DONE BY THE ASSESSEE IN RESPECT OF ITS PURCHASE AND SALE OF SHARES IN THE CASE OF M/S.TUNI TEXTILES MILLS LTD., TO BE ONE OF THE PENNY STOCK. IT WAS A SUBMISSION THAT THE PURCHASE AND S ALE OF THE SHARES WERE DONE THROUGH THE BOMBAY STOCK EXCHANGE (IN SHORT B SE). IT WAS A SUBMISSION THAT THE ASSESSEE HAD PURCHASED 5000 SHA RES ON 07.12.2010 @ RS.116.82/- PER SHARE. IT WAS A SUBMISSION THAT THE SAID SHARES HAD BEEN SUB-DIVIDED ON 09.04.2011 AT THE RATIO OF 1:10 AND THE SAME HAD BEEN SOLD ON 09.03.2012 @ RS.93.50/-. IT WAS A SUB MISSION THAT THE SECURITIES TRANSACTION TAX (IN SHORT STT) IN RESP ECT OF THE TRANSACTIONS HAD ALSO BEEN PAID. IT WAS A PRAYER THAT UNDER THE SIMILAR CIRCUMSTANCES THE CO-ORDINATE BENCH OF THIS TRIBUNAL HAD IN RESPE CT OF THE TRANSACTIONS DONE ONLINE HELD THAT THAT THE SAME WERE LIABLE TO BE HELD AS GENUINE. IT WAS A SUBMISSION THAT THIS WAS NOT THE CASE OF PENN Y STOCK BUT THIS WAS A REGULAR TRANSACTION DONE BY THE ASSESSEE. THE LD.A R PLACED RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBU NAL IN THE CASE OF SHRI ASHWIN KUMAR DAVEY VS. ITO, CHENNAI, IN ITA NO.2299 /CHNY/2017 DATED 18.12.2018, WHEREIN, IT HAS BEEN HELD AS FOLLOWS: 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THIS IS NOT A CASE WHERE T HE LD. ASSESSING OFFICER HAS BEEN ABLE POINT OUT WHERE THE ASSESSEE HAS MADE A BOGUS CLAIM OF LONG TERM CAPITAL GAINS EXEMPT U/S.10(38) OF THE ACT. FURTHER, PERUSAL OF THE ASSESS MENT ORDER CLEARLY SHOWS THAT FROM PAGE-1, PARA-3 TO PARA 5.3, THE LD. ASSESSING OFFICE R HAS ONLY MADE ALLEGATION IN RESPECT OF THESE TWO COMPANIES AND THE MODUS OPERANDI OF THE B OGUS CLAIM U/S.10(38) OF THE ACT. THE EVIDENCES CLEARLY SHOW THAT THE TRANSACTIONS OF PUR CHASE AND SALE OF THE SHARES BY THE ASSESSEES HEREIN ARE THROUGH ONLINE TRANSACTION BY PAYING STT. THIS IS NOT A CASE FOR OFF- LINE PURCHASE, NOR IS THE CASE OF DIRECT PURCHASE. NEITHER IS THE ASSESSEES NAME COMING OUT IN THE INVESTIGATION REPORT, WHICH HAS BEEN RECEIVE D BY THE LD. ASSESSING OFFICER FROM DIRECTORATE OF INVESTIGATION, KOLKATA. THIS BEING S O, THE CLAIM OF ASSESSEE CANNOT BE DISALLOWED MERELY ON PRESUMPTIONS AND THE LD. ASSES SING OFFICER IS DIRECTED TO GRANT THE ASSESSEE BENEFIT OF EXEMPTION U/S.10(38) OF THE ACT A S CLAIMED IN RESPECT OF LONG TERM CAPITAL GAINS GENERATED BY PURCHASE AND SALE OF SHA RES OF M/S.NCL RESEARCH LIMITED AND M/S.RISA INTERNATIONAL AS CLAIMED BY THE ASSESSEE. ITA NO.1134/CHNY/2019 :- 3 -: 4. IN REPLY, THE LD.DR SUBMITTED THE FACT THAT THE AS SESSEE HAD MADE SUCH HUGE PROFITS SHOWED THAT THE TRANSACTIONS WERE SUSPECTED. IT WAS A SUBMISSION THAT THE ORDER OF THE AO AND THE LD.CIT( A) WAS LIABLE TO BE UPHELD. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. 6. IT IS NOTICED THAT THE AO HAS MADE ALLEGATIONS IN RESPECT OF THE MODUS OPERANDI IN RESPECT OF THE BOGUS CLAIM U/S.10 (38) OF THE ACT. AS IT IS NOTICED THAT THE EVIDENCES CLEARLY SHOWS THAT TH E TRANSACTIONS OF PURCHASE AND SALE OF SHARES BY THE ASSESSEE HEREIN ARE THROUGH THE BSE AS ALSO IT IS NOTICED THAT THE ASSESSEES NAME IS N OT COMING OUT OF THE INVESTIGATION REPORT, WHICH HAS BEEN RECEIVED BY TH E AO FROM THE DIRECTORATE OF INVESTIGATION, KOLKATTA, WE ARE OF T HE VIEW THAT THE DISALLOWANCE MADE BY THE AO AND AS CONFIRMED BY THE LD.CIT(A) MERELY ON PRESUMPTIONS IS UNSUSTAINABLE. IN THESE CIRCUMS TANCES, FOLLOWING THE DECISION OF THE DECISION OF THE CO-ORDINATE BENCH O F THIS TRIBUNAL IN THE CASE OF SHRI ASHWIN KUMAR DAVEY, THE AO IS DIRECTED TO GRANT THE ASSESSEE THE BENEFIT OF DEDUCTION U/S.10(38) OF THE ACT AS CLAIMED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED. ORDER PRONOUNCED ON THE 05 TH AUGUST, 2019 IN CHENNAI. SD/- SD/- ( ) ( INTURI RAMA RAO ) /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) /JUDICIAL MEMBER ITA NO.1134/CHNY/2019 :- 4 -: /CHENNAI, 3 /DATED: 05 TH AUGUST, 2019. TLN , *45 65 /COPY TO: 1. ) /APPELLANT 4. 7 /CIT 2. *+) /RESPONDENT 5. 5 * /DR 3. 7 ( ) /CIT(A) 6. /GF