Dr. Kushanava Pabi, Burdwan V. ACIT, Circle - 2, Burdwan, Burdwan

ITA 1364/KOL/2009

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78300 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2014
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 05-04-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 06-08-2009
• Court: TRIBUNAL
• Department Lawyers: A P ROY JCITLD
• Assessee Lawyers: SOUMITRA CHOWDHURY LD

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH: KO LKATA () , # 1 , BEFORE HONBLE SRI SHAMIM YAHYA, AM & & & & HONBLE SRI GEORGE MATHAN, JM ( I.T.A NO. 1364/KOL/09 / ASSESSMENT YEAR :2001-02 DR. KUSHANAVA PABI VS. A.C. I.T, CIR-2, BURDWAN PAN: AFBPP-9135P (- /APPELLANT ) (./-/ RESPONDENT ) - / FOR THE APPELLANT : / SHRI SOUMITRA CHOWDHURY, ADVOCATE, LD.AR ./- / FOR THE RESPONDENT: / SHRI A.P. ROY, .JCIT, LD.DR 3 4 /DATE OF HEARING: 01-05-2014 3 4 /DATE OF PRONOUNCEMENT: 01-05--2014 /ORDER # 1 , SHRI GEORGE MATHAN, JUDICIAL MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS), ASANSOL IN AP PEAL NO. 99/CIT(A)/ASL/CIR-2/ERST. BWN/2008-09 FOR THE ASSESSMENT YEAR 2001-02. 2. SHRI SOUMITRA CHOWDHURY ADVOCATE, LEARNED AR R EPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI A.P ROY, LEARNED JCIT/SR.DR REPR ESENTED ON BEHALF OF THE REVENUE. 3. IN THE ASSESSEES APPEAL IN ITA NO.1364/KOL/200 91 FOR THE ASSESSMENT YEAR 2001-02, THE ASSESSEE HAS RAISED THE FOLLOWING GRO UNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE COMMISSIONER OF INCOME-TAX (APPEALS) WAS JUSTIFIED IN IGNORING AND OR OVERLOOKING THE DIRECTION OF THE HONBLE INCOME -TAX APPELLATE TRIBUNAL IN RESPECT OF DISALLOWANCE OF CAPITAL LOSS SUSTAINED OF RS.1080000. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE COMMISSIONER OF INCOME-TAX (APPEALS) WAS JUSTIFIED TO DRAW INFERENCE THAT CAPITAL LOSS SUSTAINED OF RS.10800 00 WAS A COLOURABLE DEVICE WITHOUT ANALYZING AND CONSIDERING THE RELA TIVE WORTH OF THE SHARES OF THE COMPANY WHOSE SHARES WERE TRANSFERRED . 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE WAS IT NOT APPROPRIATE FOR THE COMMISSIONER OF INCOME- TAX (APPEALS) TO EVALUATE THE RELATIVE WORTH OF THE SHARES OF THE CO MPANY WHOSE SHARES WERE TRANSFERRED TO ANALYSE THE SHARE TRANSA CTION VALUE IN ITS PROPER PERSPECTIVE. 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE WAS IT NOT APPROPRIATE FOR THE COMMISSIONER OF INCOME T AX(APPEALS) TO ITA NO.1364/KOL/09 DR.KUSHANAVA PABII-C-JM 2 ACCEPT THE ANALYSIS OF FINANCIAL WORTH OF THE CO NCERNED COMPANY WHICH HAS A BEARING ON ASSESSED INCOME AND MORE PAR TICULARLY ON THE AUTHENTICITY OF SHARE TRANSACTION VALUE UPON INVO LVING THE PROVISIONS OF RULE 46A OF INCOME TAX RULE 1962 IN VIEW OF THE EARLIER ORDER OF HONBLE TRIBUNAL. 5. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE COMMISSIONER OF INCOME TAX(APPEALS) WAS JUSTIFIED I N CONFIRMING THE ORDER OF ASSESSING OFFICER RELATING DISALLOWANCE OF CAPITAL LOSS OF RS.731620 CARRIED FORWARD FROM EARLIER YEARS TO SE T OFF AGAINST CAPITAL GAIN ON THE GROUNDS THAT THE RETURN WAS NOT FILED WITHIN THE TIME LIMIT AS PROVIDED IN SECTION 139(1) OF THE ACT. 4.. AT THE TIME OF HEARING BEFORE US THE LEARNED A R FOR THE ASSESSEE HAS SUBMITTED THAT HE DID NOT WISH TO PRESS GROUND NO.4 OF ASSESS EES APPEAL. CONSEQUENTLY, THE SAME STANDS DISMISSED AS NOT PRESSED. 5. IN REGARD TO GROUND NOS. 1 TO 3, IT WAS THE SUBM ISSION BY THE LEARNED AR FOR THE ASSESSEE THAT THE ASSESSEE HAD CLAIMED LONG TERM CA PITAL LOSS OF RS.10,80,000/-. IT WAS THE SUBMISSION THAT DURING THE PREVIOUS YEAR THE A SSESSEE HAD SOLD 1,20,000 SHARES OF M/S. CHITTARANJAN CLINIC PVT. LTD (IN SHORT M/S. CC PL) AT RS.1/- EACH TO ONE, SHRI TAPAS SENGUPTA. THE CAPITAL LOSS OF RS.10.80 LAKH WAS IG NORED BY THE AO. THE AO WAS OF THE VIEW THAT THE ASSESSEE HAD SOLD SHARES OF M/S. SAT YAM COMPUTERS AND HAD EARNED LONG TERM CAPITAL GAINS OF RS.15,58,080/-. FOR THE PURP OSE OF AVOIDING PAYMENT OF THE CAPITAL GAIN TAX ON THE SAID TRANSACTION, THE ASSESSEE HAD SHOWN THE TRANSACTION OF SALE OF SHARES OF M/S. CCPL TO SHRI TAPAS SENGUPTA FOR THE PURPOSE OF ARTIFICIALLY INCURRING LONG TERM CAPITAL LOSS OF RS. 10.80 LAKH, WHICH WAS CLA IMED TO HAVE BEEN SET OFF. IT WAS THE SUBMISSION THAT THE AO HAD HELD THAT THE CLAIM OF T HE ASSESSEE WAS THAT HE HAD SET OFF THE LOAN PAYMENT OF SHRI TAPAS SENGUPTA OF RS.1.2 L AKH OUT OF 1.45 LAKH BY SELLING OF THE SHARES OF M/S. CCPL WAS NOT A GENUINE TRANSACTI ON. IT WAS THE SUBMISSION THAT THE AO WAS OF THE VIEW THAT THE ASSESSEE HAD ADEQUATE F UNDS TO PAY OF THE SAID LOAN OF SHRI TAPAS SENGUPTA AND THE ASSESSEE DID NOT HAVE INCUR THE CAPITAL LOSS OF RS.10.80 LAKH. IT WAS THE SUBMISSION THAT THE ASSESSEE WAS SPECIFI CALLY SHOWN THE REDUCTION IN THE NO. OF SHARES HELD BY THE ASSESSEE IN M/S. CCPL AFTER T HE SALE OF THE SHARES AS IS EVIDENT FROM PAGE 30 OF THE PAPER BOOK [PB], WHICH IS THE C OPY OF P & L ACCOUNT IN RESPECT OF SALE OF SHARES. HE ALSO DREW OUR ATTENTION TO TH E STATEMENT OF SHARES AS HELD BY THE ASSESSEE , WHICH IS AVAILABLE AT PAGE 29 OF THE PB. HE FURTHER DREW OUR ATTENTION TO THE ADJUSTMENT MADE TO THE UNSECURED LOAN ACCOUNT OF S HRI TAPAS SENGUPTA IN THE BALANCE SHEET AVAILABLE AT PAGES 27-28 OF THE PB. IT WAS TH E FURTHER SUBMISSION THAT THE ASSESSEE HAD ALSO PRODUCED THE CORRESPONDENCES BETWEEN SHRI TAPAS SENGUPTA AND ASSESSEE ITA NO.1364/KOL/09 DR.KUSHANAVA PABII-C-JM 3 AS AVAILABLE AT PAGES 14-19 OF THE PB. IT WAS THE S UBMISSION THAT THE AO DISALLOWED THE ASSESSEES CLAIM ON THE GROUND THAT THE ASSESSEE DI D NOT HAVE TO SELL THE SHARES AND ASSESSEE HAD ADEQUATE FUNDS TO REPAY THE LOAN OF S HRI TAPAS SENGUPTA. HE DISALLOWED THE ASSESSEES CLAIM OF LONG TERM CAPITAL LOSS ON T HE SALE OF SHARES OF M/S. CCPL BY IGNORING THE LOSS. IT WAS THE SUBMISSION THAT THE ON APPEAL THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) DID NOT CONSIDER THE SUBMIS SIONS OF THE ASSESSEE AND UPHELD THE ORDER OF THE AO. IT WAS THE SUBMISSION THAT TH E LONG TERM CAPITAL LOSS AS CLAIMED BY THE ASSESSEE WAS LIABLE TO BE ALLOWED. 6. IN REPLY, THE LEARNED JCIT/SR.DR HAS VEHEMENTLY SUPPORTED THE ORDERS OF THE AO AND THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE BALANCE SHEET AND P & L ACCOUNT OF THE ASSESSEE CLEARLY SHOWS THAT THE ASSESSEE HAS RECORDED THE TRANSACTION OF SALE OF SHARES OF M/S. CCPL AND HAS ALSO REDUCED HIS HOLDING ACCORDINGLY IN HIS BALANCE SHEET. THE FACT THAT TH E ASSESSEE HAS SOLD THE SHARES OF M/S. CCPL STANDS CONFIRMED BY THE AO IN SO FAR AS THE A DJUSTMENT DONE BY THE ASSESSEE THROUGH THE SALE OF SHARES OF M/S. CCPL AND THEREON ADJUSTMENT TO THE LOAN ACCOUNT OF SHRI TAPAS SENGUPTA HAS NOT BEEN TAMPERED WITH BY T HE AO. ONCE THE SALE OF SHARES OF M/S. CCPL IS ACCEPTED, THE P & L ACCOUNT THEREFREO M IS LIABLE TO BE ADJUSTED IN THE ASSESSEES CAPITAL ACCOUNT. IT IS AN ADMITTED FACT THAT THE ASSESSEE IS FULLY ENTITLED TO ADJUST HIS AFFAIRS, IN SUCH A MANNER TO REDUC E OR MINIMIZE THE LIABILITY TO TAX. THIS IS SUPPORTED BY THE DECISION OF THE HONBLE SUPREME C OURT IN THE CASE OF UNION OF INDIA VS. AZADI BACHAO ANDOLAN REPORTED (2003) REPORTED IN 263 ITR 706(SC). THE TRANSACTION OF SALE OF SHARES HAS NOT BEEN SHOWN TO BE BOGUS. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ASSESSEE IS ENTITLED TO CL AIM LONG TERM CAPITAL LOSS OF RS.10.80 LAKH ON SALE OF SHARES OF M/S. CCPL AS CLAIMED AND PRAISED BY THE ASSESSEE BEFORE US. THESE GROUNDS OF ASSESSEES APPEAL STAND ALLOWED. 8. IN RESPECT OF GROUND NO.5 OF THE ASSESSEES APPE AL, IT WAS THE SUBMISSION BY THE LEARNED AR FOR THE ASSESSEE THAT THIS WAS IN RELATI ON TO DISALLOWANCE OF CARRY FORWARD CAPITAL LOSS FROM EARLIER YEARS. IT WAS THE SUBMIS SION BY HIM THAT HE HAD NO OBJECTION IF THIS ISSUE IS RESTORED TO THE FILE OF THE AO FOR VE RIFICATION AND RE-ADJUDICATION. 9. IN REPLY, THE LEARNED JCIT/SR.DR HAS SUBMITTED T HAT HE HAD NO OBJECTION, IF THIS ISSUE IS RESTORED TO THE FILE OF THE AO FOR THE SAM E. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSESSEE HAS SUBMITTED A PETITION U /S. 119(2)(B) OF THE ACT BEFORE THE ITA NO.1364/KOL/09 DR.KUSHANAVA PABII-C-JM 4 CBDT [ CENTRAL BOARD OF DIRECT TAXES ] IN RESPECT O F CARRY FORWARD OF THE CAPITAL LOSS AND THE MATTER IS PENDING FOR DECISION. CONSEQUENTLY, THE ISSUE OF CARRY FORWARD AND SET OFF OF THE CAPITAL LOSS IS RESTORED TO THE FILE OF THE AO FOR RE-ADJUDICATION AFTER GRANTING THE ASSESSEE ADEQUATE OPPORTUNITY TO SUBSTANTIATE HIS CASE. THIS GROUND OF ASSESSEES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSE. 11. IN THE RESULT, THE ASSESSEES APPEAL IN ITA N O. 1364/KOL/09 FOR THE ASSESSMENT YEAR 2001-02 STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSE AS STATED ABOVE. 6 THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT 01/0 5/2014 SD/- SD/- ** PRADIP SPS 3 .9 :9 / COPY OF THE ORDER FORWARDED TO: 1. . - / THE APPELLANT : DR. KUSHANAVA PABI, RAMKRISHNA ROAD, BURDWAN- 713101.. 2 ./- / THE RESPONDENT- ACIT, CIR-2, AAYKAR BHAVAN ANNE XE COURT COMPOUND BURDWAN 713101. 3. 4. / THE CIT, ()/ THE CIT(A) 5 . . / DR, KOLKATA BENCH 6 . GUARD FILE . /9 ./ TRUE COPY, / BY ORDER, /ASSTT REGISTRAR ( , ) (SHAMIM YAHYA, ACCOUNTANT MEMBER) ( # 1 , ) (GEORGE MATHAN, JUDICIAL MEMBER) ( (( ( 4 4 4 4 ) )) ) DATE 01/05 /2014