Charu Agarwal, Meerut V. ITO, Ward- 1(2), Meerut

ITA 1302/DEL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1566 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 23-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANIL JAIN S
• Keywords: Corroborative evidences; Penny stocks
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC BENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA , ACCOUNTANT MEMBER ITA NO. 1301 /DEL/201 8 [ASSESSMENT YEAR: 20 14 - 15 ] DEEPTY AGARWAL, VS. ITO, WARD 1(2) HOTEL DEEP, MEERUT BEGAM BRIDGE, MEERUT 250001 UTTAR PRADESH (PAN AALPA7534Q) [APPELLANT] [RESPONDENT] ITA NO. 1302 /DEL/201 8 [ASSESSMENT YEAR: 20 14 - 15 ] CHARU AGARWAL, VS. ITO, WARD 1(2) 84, HILL STREET, MEERUT MEERUT CANTT., MEERUT UTTAR PRADESH (PAN AEKPA1075R)) DATE OF HEARING : 06 . 0 9 .201 8 DATE OF PRONOUNCEMENT : 10.09.2018 ASSESSEE BY : SHRI RAJEEV SAXENA & SH. ANIL JAIN, ADVOCATES REVENUE BY : SHRI ANIL KUMAR SHARMA, SR. DR ORDER TH ESE APPEALS BY TWO DISTINCT APPELLANTS PREFERRED AGAINST THE TWO SEPARATE ORDERS OF THE LD. CIT(A), MEERUT DATED 22.12.2017 PERTAINING TO ASSESSMENT YEAR 2014 - 15. SINCE THE UNDERLINE FACTS IN ISSUES ARE IDENTICAL IN 2 THE CASE OF BOTH THE APPELLANTS, THERE FORE, I DEEM IT FIT TO DISPOSE OFF BOTH THE APPEALS BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. THE REPRESENTATIVES OF BOTH THE SIDES AGREED THAT FACTS OF ITA NO. 1302/DEL/2018 MAY BE TAKEN INTO CONSIDERATION IN THE DISPOSAL OF T HE APPEALS. ON SUCH CONCESSIONS I HAVE HEARD BOTH THE REPRESENTATIVES ON THE FACTS OF ITA NO. 1302/DEL/2018. 3. THE SOLITARY GRIEVANCE IN BOTH THE APPEALS RELATE TO THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT THOUGH QUANTUM MAY DEFER . T HE R OOTS FOR TH E LEVY OF PENALTY LIE IN THE ASSESSMENT ORDER DATED 22.12.2016 FRAMED U/S. 143(3) OF THE I.T. ACT. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE APPELLANT HAS CLAIMED LONG TERM CAPITAL GAINS ON THE SALE OF SHARES AS EXE MPT U/S. 10(34) OF THE ACT. THE ASSESSEE WAS ASKED TO FURNISH THE NECESSARY DETAILS ALONGWITH SUPPORTING EVIDENCE S . THE ASSESSEE FILED DETAILS IN RESPECT OF SHARES SOLD AS SUPPORTING EVIDENCES. NOT CONVINCED WITH THE SUBMISSIONS OF THE ASSESSEE, THE AO PROCEEDED BY PRESUMING THAT THE ENTIRE TRANSACTIONS RELATED TO PENNY STOCK AND THE CAPITAL GAINS SO GENERATED IS BOGUS. BEING FRUSTRATED BY THE REPETITIVE QUERIES OF THE AO THE ASSESSEE SURRENDERED THE CLAIM OF EXEMPTION AND OFFERED THE ENTIRE CAPITAL GAINS FOR TAXATION. THE ASSESSMENT WAS COMPLETED ACCORDINGLY. HOWEVER, THE AO INITIATED PENALTY PROCEEDINGS U/S. 271(1) OF THE ACT STATING THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND H AS INTRODUCED HER OWN UNEXPLAINED MON EY IN THE GUISE OF BOGUS LONG TERM CAPITAL GAIN ON SALE OF PENNY STOCKS. 3 ACCORDINGLY, THE PENALTY U/S. 271(1) OF THE ACT WAS LEVIED. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A), BUT WITHOUT ANY SUCCESS. BEFORE ME THE COUNSEL FOR THE ASSESSE E VEHEMENTLY STATED THAT TO AVOID UNNECESSARY QUERIES AND PROLONG LITIGATION THE ASSESSEE HAD SURRENDERED THE CLAIM OF EXEMPTION U/S. 10(34) OF THE ACT, BUT IT CANNOT BE SAID THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND IT IS INCO RRECT TO SAY THAT THE ASSESSEE HAS INTRODUCED HER OWN UNACCOUNTED MONEY IN THE FORM OF BOGUS LONG TERM CAPITAL GAINS. IT IS SAY OF THE COUNSEL THAT THE PENALTY SO LEVIED DESERVE TO BE DELETED. PER CONTRA THE LD. DR STRONGLY SUPPORTED THE FINDINGS OF THE LOWER AUTHORITIES. 4. I HAVE GIVEN THE THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. I FIND THAT IN THE COMPUTATION OF INCOME THE ASSESSEE HAS DULY DISCLOSED ALL THE PARTICULARS OF HER INCOME AND UNDER THE HEAD INCOME WITH F ULL EXEMPTION THE ASSESSEE HAS CLAIMED DIVIDEND INCOME AS EXEMPT AND ALSO LONG TERM CAPITAL GAIN ON WHICH STT IS PAID WHICH IS ALSO EXEMPT FROM TAX. I FURTHER FIND THAT DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS THE AO HAS PROCEEDED BY THE ASSU MPTION THAT THE SHARES PURCHASED AND SOLD BY THE ASSESSEE COMES INTO THE CATEGORY OF PENNY STOCK COMPANIES. THE AO HAS DRAWN SUPPORT FROM OUTSIDE INFORMATION. IN MY CONSIDERED OPINION THE SURRENDER OF EXEMPTION BY THE ASSESSEE ON REPETITIVE QUERIES WOU LD NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE ASSESSEE HAS CLAIMED EXEMPTION AS PER THE PROVISIONS OF LAW, THOUGH SURRENDERED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IN 4 MY CONSIDERED OPINION, ON THE FACTS OF THE CASE, NO PEN ALTY IS LEVIABLE U/S. 271(1) OF THE ACT. I ACCORDINGLY SET ASIDE THE FINDING OF THE LD. CIT(A) AND DIRECT THE AO TO DELETE THE PENALTY SO LEVIED. 5 . IN THE RESULT, APPEALS OF BOTH THE ASSESSEES ARE ALLOWED. THE ORDER IS PRON OUNCED IN THE OPEN COURT ON 10. 0 9 .2018. SD/ - [N.K. BILLAIYA] ACCOUNTANT MEMBER DATED: 10 , SEPTEMBER, 2018 SRBHATNAGAR COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI 5 DATE OF DICTATION 07 - 9 - 18 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS 07 - 9 - 18 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS 10.09.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 10.09.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER