RAJKUMARI GULECHA, CHENNAI V. ACIT NON CORPORATE CIRCLE 6(1), CHENNAI

ITA 1405/CHNY/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5769 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 07-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V M MAHIDAR IRS
• Keywords: Transactions in derivatives
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . . . , , [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ] ./I.T.A. NO. 1405/CHNY/2019 ! / ASSESSMENT YEAR : 2011-2012. MRS. RAJKUMARI GULECHA, NO.402, MINT STREET, SOWCARPET, CHENNAI 600 079. [PAN AAFPR 4561E] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 6(1) CHENNAI. ( / APPELLANT) ( /RESPONDENT) '# $ % / APPELLANT BY : SHRI. D. ANAND, ADVOCATE &' '# $ % /RESPONDENT BY : SHRI. V.M. MAHIDAR, IRS, JCIT ( ) $ * /DATE OF HEARING : 06-08-2019 +,! $ * /DATE OF PRONOUNCEMENT : 08-08-2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-5 , CHENNAI (CIT(A) FOR SHORT) DATED 22.02.2019 FOR ASSESSME NT YEAR 2011-2012. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : ITA NO.1405/CHNY/2019 :- 2 -: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOM E (APPEALS)-5, IS WRONG, ILLEGAL AND IS OPPOSED TO LA W. 2. THE LEARNED CIT(A) OUGHT TO HAVE ADJUDICATED THE APPEALS APPEAL ON MERITS BY CONSIDERING THE VARIOUS GROUNDS RAISED BY THE APPELLANT. 3. THE LEARNED COMMISSIONER OF INCOME (APPEALS)-5 O UGHT TO HAVE SEEN THAT THE ASSESSING OFFICER HAS FAILED TO BRING ANY ADVERSE INFORMATION ON RECORD TO PROVE THE ALLE GATION THAT APPELLANT HAS TAKEN F&O LOSS OF RS. 15,00,539/ - BY MISUSING THE CLIENT CODE FACILITY. IT IS NOT A CASE WHERE THERE IS NEXUS BETWEEN THE BROKER AND THE APPELLANT OR A PRE- PLANNED STRATEGY TO SUPRESS OR TRANSFER INCOME TO A VOID TAXES. 4. THE LEARNED CIT(A)-5 OUGHT TO HAVE SEEN THAT THE ASSESSING OFFICER ERRED IN MAKING ADDITION OF RS.28 ,79,387/- MERELY ON THE BASIS OF INFORMATION RECEIVED FROM TH E INVESTIGATION DIRECTORATE WITHOUT EVEN CONSIDERING THE MATERIAL EVIDENCE PROVIDED TO THE ASSESSING OFFICER TO SUBSTANTIATE THE GENUINENESS OF THE TRANSACTION. 5. THE LEARNED COMMISSIONER OF INCOME TAX OUGHT TO HAVE SEEN THAT THE CODE CORRECTIONS WERE ON ACCOUNT OF INADVERTENT PUNCHING ERRORS BY THE BROKERS AND WERE NOT DONE WITH ANY MALAFIDE INTENT OF REDUCING AND SUPRE SSING INCOME. THE LEARNED REVENUE AUTHORITIES SUSTAINED T HE SAID ADDITION DESPITE THE CONFIRMATION GIVEN BY MIS, CHOLAMANDALAM SECURITIES LTD AND FURTHER CONFIRMATI ON BY THE BROKER THAT THE EXCHANGE OBLIGATION ON THE AFOR ESAID TRANSACTION HAVE BEEN MET ONLY BY THE APPELLANT. FOR THESE AND OTHER GROUNDS THAT MAY BE RENDERED AT THE TIME OF HEARING IT IS MOST HUMBLY PRAYED THAT THE H ONBLE TRIBUNAL MAY BE PLEASED TO ALLOW THE APPELLANTS APP EAL AND THUS RENDER JUSTICE. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS AN INDIVIDUAL ENGAGED IN THE BUSIN ESS OF TRADING IN SHARES AND DERIVATIVES. THE RETURN OF INCOME FOR THE AY 2011-12 ITA NO.1405/CHNY/2019 :- 3 -: WAS FILED ON 28.09.2011 DISCLOSING TOTAL INCOME OF RS. 86,11,260/-. THE SAID RETURN OF INCOME WAS ACCEPTED U/S.143(1) O F THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). IN SCRUTINY AS SESSMENT, SUBSEQUENTLY, THE ASSESSING OFFICER ISSUED NOTICE U /S.148 OF THE ACT ON 24.03.2017 BASED ON THE INFORMATION THAT INCOME ESC APED ASSESSMENT TO THE EXTENT OF G28,79,387/-. AGAINST THE SAID RE TURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE ASSISTANT COMMISSI ONER, NON CORPORATE CIRCLE 6(1),CHENNAI (HEREINAFTER CALLED A S ASSESSING OFFICER) VIDE ORDER DATED 22.12.2017 PASSED U/S. 143(3) R.W.S. 147 OF THE ACT AT TOTAL INCOME OF RS.1,14,90,650/- AFTER MAKING ADDITION OF G28,79,387/- AFTER DISALLOWING LOSS ON ACCOUNT OF CLIENT CODE MODIFICATIONS. 4. BEING AGGRIEVED BY THE ABOVE ADDITION, AN APPEAL WA S PREFERRED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DISMISSED THE APPEAL FOR NON PROSECUTION. 5. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. FROM THE PERUSAL OF THE LD. CIT(A) ORDER, IT IS CLEAR THAT LD. CIT(A) DISMISSED THE APPEAL IN LIMINE WITHOUT DI SPOSING THE APPEAL ON MERITS. NOW IT IS SETTLED POSITION OF LAW THAT APPELLATE AUTHORITY WHILE PASSING EX-PARTE ORDER SHOULD DISPOSE THE MAT TER ON MERITS. THEREFORE WE REMIT THIS MATTER BACK TO THE FILE OF LD. CIT(A) FOR ITA NO.1405/CHNY/2019 :- 4 -: DENOVO CONSIDERATION AFTER AFFORDING DUE OPPORTUNIT Y OF HEARING TO THE APPELLANT. HENCE, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 8TH DAY OF AUGUST, 2019, AT C HENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER - ) / CHENNAI . / DATED: 8 TH AUGUST, 2019. KV $ &*01 21!* / COPY TO: 1 . '# / APPELLANT 3. ( 3* () / CIT(A) 5. 16 &*7 / DR 2. &' '# / RESPONDENT 4. ( 3* / CIT 6. 8 9) / GF