Ankit Trust, CHENNAI V. ITO, Tiruppur

ITA 1370/CHNY/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9888 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-04-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 16-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: R VIJAYARAGHAVAN
• Section: 147; 68; 10; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1370/MDS/2014 ' (' / ASSESSMENT YEAR : 2005-06 M/S ANKIT TRUST, 20, PUTHU THOTTAM, 1 ST SHERIFF COLONY, TIRUPUR 641 604. PAN : AAATA 6881 H V. THE INCOME TAX OFFICER, WARD I(2), TIRUPUR. (*+/ APPELLANT) (,-*+/ RESPONDENT) ./ ITA NO.1371/MDS/2014 ' (' / ASSESSMENT YEAR : 2005-06 SHRI SAGAR KUMAR, 20, PUTHU THOTTAM, 1 ST SHERIFF COLONY, TIRUPUR 641 604. PAN : BAVPS 1754 H V. THE INCOME TAX OFFICER, WARD I(2), TIRUPUR. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANTS BY : SH. R. VIJAYARAGHAVAN, ADVOCATE ,-*+ . / / RESPONDENT BY : SH. P. RADHAKRISHNAN, JCIT 0 . 1$ / DATE OF HEARING : 08.04.2015 2!( . 1$ / DATE OF PRONOUNCEMENT : 08.05.2015 2 I.T.A. NOS.1370 & 1371/MDS/14 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: BOTH THE APPEALS OF THE TWO INDEPENDENT ASSESSEES ARE DIRECTED AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, COIMBATORE, PERTAINING TO ASSESSMENT Y EAR 2005-06. 2. SHRI R. VIJAYARAGHAVAN, THE LD.COUNSEL FOR THE A SSESSEES, SUBMITTED THAT THE ASSESSING OFFICER TREATED THE LO NG TERM CAPITAL GAIN ON SALE OF EQUITY SHARES AS INCOME UNDER SECTI ON 68 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). ACCORDI NG TO THE LD. COUNSEL, THE ASSESSEES HAVE FILED A COPY OF THE DEM AT ACCOUNT WHERE THE SHARES WERE HELD BY THE ASSESSEES FOR MOR E THAN TWELVE MONTHS. SECURITY TRANSACTION TAX HAS BEEN PAID ON THE TRANSACTIONS AND THE SHARES WERE SOLD THROUGH RECOG NIZED STOCK EXCHANGE. THE PAYMENTS RECEIVED BY THE ASSESSEES B Y CHEQUES WERE DEPOSITED IN IDBI BANK. ACCORDING TO THE LD. COUNSEL, THE ASSESSEES HAVE PRODUCED ALL THE MATERIALS BEFORE TH E ASSESSING OFFICER. ALL THE CONDITIONS STIPULATED UNDER SECTI ON 10(38) OF THE ACT WERE SATISFIED. HOWEVER, THE ASSESSING OFFICER DIS ALLOWED THE CLAIM OF THE ASSESSEES IN ORIGINAL ASSESSMENT. BY WAY OF RECTIFICATION UNDER SECTION 154 OF THE ACT, THE ASSESSING OFFICER COMPUTED THE TAX BY RAISING ADDITIONAL DEMANDS. 3 I.T.A. NOS.1370 & 1371/MDS/14 3. ON THE CONTRARY, SHRI P. RADHAKRISHNAN, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE DET AILS OF TRANSACTIONS FURNISHED BY THE ASSESSEES BEFORE THE ASSESSING OFFICER WERE FOUND TO BE BOGUS DURING THE SEARCH AN D SEIZURE OPERATION. ACCORDING TO THE LD. D.R., THE DIRECTOR S OF THE ASSESSEE- COMPANY HAVE FLOATED 36 COMPANIES AND TWO OF THE CO MPANIES WERE LISTED IN AHMEDABAD AND PUNE STOCK EXCHANGE. THERE WAS NO GENUINE TRANSACTION CARRIED BY THESE COMPANIES. THE INVESTIGATION UNIT OF THE DEPARTMENT FOUND DURING T HE COURSE OF SEARCH THE LIST OF PERSONS TO WHOM THE BOGUS BILLS WERE ISSUED BY THE SAID COMPANIES. THE ASSESSEES ARE AMONG THE PE RSONS TO WHOM BOGUS SHARE TRANSACTION ARRANGEMENTS HAVE BEEN MADE BY THE COMPANY M/S GOLD STAR FINEVEST PRIVATE LIMITED. SINCE THE DETAILS FURNISHED BY THE ASSESSEES ARE FOUND TO BE BOGUS DURING THE COURSE OF SEARCH OPERATION, ACCORDING TO THE LD. D. R., ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF EXEMPTION UNDER SECTION 10(38) IN THE ORIGINAL ASSESSMENT DATED 28.12.2012. HOWEV ER, THERE WAS AN ERROR IN THE COMPUTATION OF TAX, WHICH WAS RECTI FIED BY AN ORDER DATED 31.01.2013. NOW THE ASSESSEES HAVE FILED APP EALS AGAINST THE ORDERS DATED 31.01.2013 AND NOT AGAINST THE ORD ERS DATED 28.12.2012. 4 I.T.A. NOS.1370 & 1371/MDS/14 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE ASSES SMENTS IN THE CASE OF BOTH THE ASSESSEES WERE REOPENED UNDER SECT ION 147 OF THE ACT AND THE REOPENED ASSESSMENTS WERE COMPLETED BY ORDERS DATED 28.12.2012 DISALLOWING THE CLAIM OF THE ASSES SEES FOR EXEMPTION UNDER SECTION 10(38) OF THE ACT. FROM TH E MATERIAL AVAILABLE ON RECORD, IT APPEARS THAT THE ASSESSEES HAVE NOT FILED ANY APPEALS AGAINST THE ASSESSMENT ORDERS DATED 28.12.2 012. HOWEVER, THE ASSESSING OFFICER SUBSEQUENTLY FOUND T HAT THERE WAS AN ERROR IN THE COMPUTATION OF TAX. ACCORDINGLY, T HE TAX WAS RECOMPUTED AND ADDITIONAL DEMANDS WERE RAISED IN TH E CASE OF BOTH THE ASSESSEES. THE ASSESSEES FILED APPEALS BEFORE THE CIT(APPEALS) AGAINST THE RE-COMPUTATION OF THE TAX MADE BY THE ASSESSING OFFICER IN A PROCEEDING UNDER SECTION 154 OF THE ACT. THE ASSESSEES NOW CLAIM THAT THE ASSESSING OFFICER COMMITTED AN ERROR IN WITHDRAWING THE EXEMPTION UNDER SECTION 10 (38) OF THE ACT. IT IS NOT A CASE OF WITHDRAWAL OF EXEMPTION. IT IS A CASE OF RE- COMPUTATION OF TAX PAYABLE. IN FACT, THE EXEMPTION WAS DENIED IN THE REOPENED ASSESSMENT ORDERS. THEREFORE, THERE W AS A CONFUSION WHETHER THE ASSESSEES COULD MAKE A CLAIM OF EXEMPTI ON UNDER SECTION 10(38) IN RECTIFICATION PROCEEDINGS WITHOUT FILING APPEALS 5 I.T.A. NOS.1370 & 1371/MDS/14 AGAINST THE RE-ASSESSMENT ORDERS DATED 28.12.2012. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IT NEEDS TO BE RE CONSIDERED AND CLARIFIED BY THE ASSESSING OFFICER. ACCORDINGLY, T HE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ISSUE OF RE -COMPUTATION IS REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE ISSUE AFRESH IN ACCORD ANCE WITH LAW, AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE S. 5. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 8 TH OF MAY, 2015 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) (. !' ) ( . . . ) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 8 TH MAY, 2015. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-I, COIMBATORE 4. 0 81 /CIT-III, COIMBATORE 5. 69 ,1 /DR 6. :' ; /GF.