Smt Ranjanbala , Hospate V. The Income Tax Officer Ward-2 , Hospet

ITA 1218/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7636 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 12-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S VENKATESH
• Keywords: Gift; Share purchase agreement; Opportunity of being heard
• Section: 244A; 234B; 68; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO . 1218 /BANG/201 8 ASSESSMENT YEAR : 201 4 - 1 5 SMT. RANJANBALA, NO. 26, MAHENDRA AGENCIES, MAIN BAZAR, HOSAPETE 583 201. PAN: AAXPB2044E VS. THE INCOME TAX OFFICER, WARD 2 , HOSAPETE. APPELLANT RESPONDENT APPELLANT BY : SMT. SUMAN LUNKAR, CA RESPONDENT BY : SHRI S. VENKATESH, JCIT (DR) DATE OF HEARING : 03 .0 7 .2018 DATE OF PRONOUNCEMENT : 20 .0 7 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME I S DIRECTED AGAINST THE ORDER OF LD. CIT(A), GULBARGA DATED 31.01.2018 FOR ASSESS MENT YEAR 2014-15. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE LEARNED ASSESSING OFFICER HAD ERRED IN PASSI NG THE ORDER IN THE MANNER PASSED BY HIM AND THE LEARNED COMMISSION ER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE SAME. THE IMPUGNED ORDERS BEING BAD IN LAW AND VOID AB-INITIO ARE REQUIRED TO BE QUASHED. 2. IN ANY CASE AND WITHOUT PREJUDICE, THE LEARNED A SSESSING OFFICER HAD ERRED IN MAKING ADDITION OF RS. 9,00,000/ - BEI NG SALE PROCEEDS OF SHARES TO THE INCOME OF THE APPELLANT AND THE LEARN ED CIT (A) HAS ERRED IN CONFIRMING THE SAME. THE ADDITION TO THE I NCOME IS BAD BOTH IN LAW AND ON FACTS AND IS LIABLE TO BE DELETED IN ENTIRETY. 3. THE LEARNED ASSESSING OFFICER HAS NOT PROPERLY A PPRECIATED THE FACTS OF THE CASE. ON PROPER APPRECIATION OF THE FA CTS AND LAW APPLICABLE, IT WILL BE CLEAR THAT THE ADDITION AS M ADE HAS NO BASIS TO STAND AND IS LIABLE TO BE DELETED IN ENTIRETY. 4. THE LEARNED ASSESSING OFFICER HAD ERRED IN HOLDI NG THAT THE ITA NO. 1218/BANG/2018 PAGE 2 OF 5 PROVISIONS OF SECTION 68 OF I.T. ACT, 1961 ARE APPL ICABLE AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN CONFIRMING THE SAME. THERE BEING NO UNEXPLAINED CRE DIT AND IN FACT THE CREDIT HAVING BEEN DULY EXPLAINED, MAKES THE AD DITION U/S. 68 WHOLLY ERRONEOUS AND LIABLE TO BE DELETED. 5. THE LOWER AUTHORITIES HAVE ERRED IN HOLDING THAT THE TRANSACTIONS IN SHARES WERE DUBIOUS AND BOGUS. ON THE PROPER APPREC IATION OF FACTS OF THE CASE, IT WOULD BE CLEAR THAT THERE WAS NO BOGUS TRANSACTION AND HAS TO BE ACCEPTED. 5. THE APPELLANT DENIES LIABILITY TO PAY INTEREST U /S 234B AND 234D AND DENIES THE WITHDRAWAL OF INTEREST ON REFUND U/S 244A OF THE ACT. THE INTEREST HAVING BEEN ERRONEOUSLY LEVIED IS TO B E DELETED. 6. IN VIEW OF THE ABOVE AND OTHER GROUNDS TO BE ADD UCED AT THE TIME OF HEARING, IT IS REQUESTED THAT THE IMPUGNED ORDER BE QUASHED OR AT LEAST THE ASSESSMENT OF ENTIRE SALE CONSIDERATION ON SALE OF SHARES AS INCOME FROM OTHER SOURCES BE DELETED, THE INCOME FR OM LONG TERM CAPITAL GAIN EARNED ON SALE OF SHARES AS RETURNED B Y THE APPELLANT BE ACCEPTED, AND THE INTEREST LEVIED BE ALSO DELETED. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE ISSUE INVOLVED IS ONLY ONE BEING THE ADDITION MADE BY THE AO OF RS. 9 LAKHS BEING TH E SALE PROCEEDS OF SHARES, REJECTING THE CLAIM OF THE ASSESSEE THAT INCOME ARI SING ON SUCH SALE OF SHARES IS LONG TERM CAPITAL GAIN AS CLAIMED EXEMPT U/S. 10 (38) OF IT ACT. SHE PLACED RELIANCE ON A RECENT TRIBUNAL ORDER RENDERED IN THE CASE OF MEENU GOEL VS. ITO AS REPORTED IN [2018] 94 TAXMANN.COM 158 (DELHI-TRI B.)AND SHE SUBMITTED A COPY OF THIS TRIBUNAL ORDER.SHE FURTHER SUBMITTED T HAT IN THIS CASE, THE TRIBUNAL HAS DULY CONSIDERED AND DISTINGUISHED THE JUDGEMENT OF HONBLE BOMBAY HIGH COURT RENDERED IN THE CASE OF SANJAY BIMALCHAND JAI N VS. PR. CIT AS REPORTED IN [2018] 89 TAXMANN.COM 196 (BOM). THEREAFTER SHE SUBMITTED THAT THE TRIBUNAL HAS FOLLOWED THE JUDGEMENT OF HONBLE PUNJ AB AND HARYANA HIGH COURT RENDERED IN THE CASE OF PR. CIT(CENTRAL) VS. PREM PAL GANDHI IN ITA-95- 2017 (O&M) DATED 18.01.2018, COPY AVAILABLE ON PAGE S 55 TO 58 OF PAPER BOOK. SHE ALSO PLACED RELIANCE ON THIS JUDGEMENT O F HONBLE PUNJAB & HARYANA HIGH COURT AND IN ADDITION TO THAT, SHE PLACED RELI ANCE ON JUDGEMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF PR. CIT VS . ORIENTAL INTERNATIONAL CO. P. LTD. AS REPORTED IN [2018] 401 ITR 83 (DEL). TH EREAFTER SHE SUBMITTED THAT AS NOTED BY THE TRIBUNAL IN THE CASE OF MEENU GOEL VS. ITO (SUPRA), IN THE PRESENT ITA NO. 1218/BANG/2018 PAGE 3 OF 5 CASE ALSO, THE ASSESSEE HAS DULY BROUGHT ON RECORD THE COPY OF SHARE CERTIFICATES FOR PURCHASE OF SHARES, COPY OF CONTRA CT NOTES FOR SALE OF SHARES, COPY OF BANK STATEMENT EVIDENCING RECEIPT OF SALE P ROCEEDS, COPY OF SHARE TRANSFER FORM, COPY OF DP TRANSACTION STATEMENT FOR 01.01.2013 TO 31.03.2013 AND COPY OF DP TRANSACTION STATEMENT FOR THE PERIOD FROM 01.04.2013 TO 30.06.2013. SHE SUBMITTED THAT ALL THESE DOCUMENTS ARE AVAILABLE ON PAGES 32 TO 48 OF PAPER BOOK. SHE SUBMITTED THAT IN THE PRE SENT CASE, THE FACTS ARE IDENTICAL WITH THE FACTS IN THE CASE OF MEENU GOEL VS. ITO (SUPRA) AND THEREFORE, THE ISSUE SHOULD BE DECIDED IN FAVOUR OF THE ASSESS EE IN THE PRESENT CASE ALSO. THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF AUTHO RITIES BELOW. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT THE ISSUE IN DISPUTE WAS DECIDED BY LD. CIT(A) AS PER PARA NOS. 5.5 AND 5.6 OF HIS ORDER WHICH ARE REPRODUCED HEREINBELOW FOR THE SAKE OF READY REFERE NCE. 5.5 I HAVE GONE THROUGH THE FACT OF THE CASE AND FO UND THAT ASSESSE HAS NOT DISCHARGED HER DUTIES TO PUT FORTH ALL THE DOCUMENTARY EVIDENCE ASKED BY THE AO TO PROOF THE GENUINENESS O F THE LTCG IN HER BOOKS. IN FACT THE PERSON WHO DERIVES THE ADVANTAGE OUGHT TO SUSTAIN THE BURDEN. THE FOLLOWING CASE LAWS ARE RELEVANT: (1) ONUS OF PROVING THE SOURCE OF A SUM OF MONEY FO UND TO HAVE BEEN RECEIVED BY AN ASSESSEE IS ON HIM. WHEN THE NA TURE ANDSOURCE OF A RECEIPT, WHETHER IT BE OF MONEY OR OTHER PROPE RTY,CANNOT BE SATISFACTORILY EXPLAINED BY THE ASSESSEE, IT IS OPE N TOTHE REVENUE TO HOLD THAT IT IS THE INCOME OF THE ASSESSEE AND NOFU RTHER BURDEN LIES ON THE REVENUE TO SHOW THAT THE INCOME ISFROM ANY P ARTICULAR SOURCE ROSHAN DI HATTI VS CIT (SC) 107 ITR 938 KALE KHAN MOHAMMAD HANIF VS CIT (SC) 50 ITR 1 (2) MERE FILING OF GIFT DEEDS, PAN CARDS, I.T. RETU RNS ETC. DID NOT BY ITSELF DISCHARGE ASSESSEE FROM PRELIMINARY BURDEN T O ESTABLISH GENUINENESS OF GIFTS WHERE DONORS WERE NOT FOUND AT THE ADDRESS GIVEN IN THE RETURNS OR PAN CARD - IN SUCH CIRCUMST ANCES, IT IS THE DUTY OF THE ASSESSEE TO PRODUCE DONORS /CREDITORS B EFORE THE ASSESSING OFFICER AS OTHERWISE ADDITION U/S68 HAS T O BE MADE. PRAKASHCHANDRA SINGHVI (HUF) VS ITO (ITAT, AHD) 134 ITD 283 (3) SEC. 68 DOES NOT CONFINE TO CASH ENTRIES IN BOO KS - IF THE LIABILITY SHOWN IN THE ACCOUNT IS FOUND TO BE BOGUS AND THERE IS NO PLAUSIBLE AND REASONABLE EXPLANATION OF THE ASSESSEE, THE AMO UNT CAN CERTAINLY BE ADDED TOWARDS THE INCOME OF THE ASSESS EE V.I.S.P (P) LTD. VS CIT (MP) 265 ITR 202 (4) IN ORDER TO CLAIM THAT AN EXPENDITURE FALLS U/S 37(1), THE BURDEN ITA NO. 1218/BANG/2018 PAGE 4 OF 5 OF PROVING THE NECESSARY FACTS IN THAT CONNECTION I S ON THE ASSESSEE CIT VS CALCUTTA AGENCY LTD. (SC) 19 ITR 191 LAKSHIMARATAN COTTON MILLS CO. LTD. VS CIT (SC) 73 ITR 634 (5) ASSESSEE FAILED TO PROVE THE GENUINENESS OF CRE DIT - MERE PROOF OF IDENTITY OF CREDITOR OR THAT TRANSACTION WAS BY CHEQUE, IS NOT SUFFICIENT - ADDITION U/S 68'UPHELD MANGILAL JAIN VS ITO (MAD) 315 ITR 105 CIT VS PRECISION FINANCE P. LTD. (CAL) 208 ITR 465 5.6 ASSESSEE HAS NOT DISCHARGED HER DUTIES TO PUT F ORTH ALL THE DOCUMENTARY EVIDENCE ASKED BY THE AO TO PROOF THE G ENUINENESS OF THE LTCG IN HER BOOKS. THEREFORE, THE ADDITION MADE BY THE AO IS SUSTAINED AND ION MADE BY THE AO IS SUSTAINED AND A SSESSEE GROUND OF APPEAL ASSESSEE GROUND OF APPEAL 2, 3, 4, 5 & 7 ARE DISMISSED. 5. FROM THE ABOVE PARAS REPRODUCED FROM THE ORDER O F CIT (A), IT IS SEEN THAT THE BASIS OF THE DECISION OF CIT (A) IS THIS THAT THE A SSESSEE HAS NOT DISCHARGED ITS DUTIES BY BRINGING ALL THE DOCUMENTARY EVIDENCE ASK ED BY THE AO TO PROVE THE GENUINENESS OF LONG TERM CAPITAL GAIN. NO JUDGMENT CAN HELP THE ASSESSEE UNLESS ALL THE REQUIRED DOCUMENTS ARE BROUGHT ON RE CORD. IN PARA 5.3 OF HIS ORDER, IT IS NOTED BY LEARNED CIT (A) THAT ORIGINAL CONTACT NOTE, PROOF OF STT PAID ON PURCHASE, REASONS TO TRADE OFF MARKET WHEN OPTIO NS TO ONLINE MARKET TRADING THROUGH DEMAT ACCOUNT WERE AVAILABLE, TRADING PATTE RN OF MARKET TRANSACTIONS FOR LAST THREE YEARS ETC. HAVE NOT BEEN SUBMITTED B EFORE THE AO. AS PER THE PAPER BOOK FILED BEFORE THE TRIBUNAL, VARIOUS DOCUM ENTS WERE FILED BY THE ASSESSEE BEFORE THE AO BUT THERE IS NO FINDING OF C IT (A) AS TO WHETHER THESE DOCUMENTS WERE FILED BEFORE THE AO OR NOT AND WHETH ER THE ADDITION IS JUSTIFIED OR NOT IN THE LIGHT OF THESE DOCUMENTS. HENCE, I FE EL IT PROPER TO RESTORE THE MATTER BACK TO THE FILE OF CIT (A) FOR A FRESH DECI SION AFTER EXAMINING THESE ASPECTS AS TO WHETHER THESE DOCUMENTS WHICH ARE FIL ED BEFORE THE TRIBUNAL WERE FILED BEFORE THE AO OR NOT. IF IT IS FOUND THAT THE SAME WERE FILED BEFORE THE AO, THE ASSESSEE SHOULD BE ASKED O FILE A COPY BEFORE C IT (A) ALSO AND THEREAFTER THE MATTER SHOULD BE DECIDED AFRESH IN THE LIGHT OF THESE DOCUMENTS AFTER CONSIDERING THE TRIBUNAL ORDER CITED BEFORE ME AS N OTED ABOVE AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. IF SOME MORE JUDGMENTS OF TRIBUNAL AND HIGH COURTS ARE AVAILABLE BY THE TIME, THE ISSUE IS DECIDED BY CIT (A) AFRESH, AND THEN THOSE SHOULD ALSO BE CONSIDERE D. IN THIS VIEW OF THE MATTER, I DO NOT EXAMINE THE APPLICABILITY OF VARIOUS JUDIC IAL PRONOUNCEMENTS CITED ITA NO. 1218/BANG/2018 PAGE 5 OF 5 BEFORE ME BECAUSE THE APPLICABILITY OF JUDGMENTS SH OULD BE SEEN ONLY AFTER THE FACTS ARE EXAMINED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DA TE MENTIONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 20 TH JULY, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.