MR. NAVIN BAMBOLY HUF, CHENNAI V. ITO NON CORPORATE WARD 10 (3), CHENNAI

ITA 1691/CHNY/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9714 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 17-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V NANDA KUMAR
• Assessee Lawyers: D ANAND
• Keywords: Penny stocks

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1691/CHNY/2018 ( )( / ASSESSMENT YEAR : 2014-15 SHRI NAVIN BAMBOLY HUF, NO.4B, PROF. SUBRAMANIAN STREET, KILPAUK, CHENNAI - 600 010. PAN : AADHN 5817 K V. THE INCOME TAX OFFICER, NON CORPORATE WARD -10(3), CHENNAI - 600 034. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI D. ANAND, ADVOCATE -.+, / 0 / RESPONDENT BY : SHRI V. NANDAKUMAR, JCIT 1 / 2% / DATE OF HEARING : 26.11.2018 3') / 2% / DATE OF PRONOUNCEMENT : 03.12.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-12, CHENNAI, D ATED 27.03.2018 AND PERTAINS TO ASSESSMENT YEAR 2014-15. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER SECTION 10(38) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.A. NO.1691/CHNY/18 3. SHRI D. ANAND, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE CLAIMED LONG TERM CAPITAL GAIN IN SALE OF SHARES UNDER SECTION 10(38) OF THE INCOME-TAX ACT, 1961 (IN SHOR T 'THE ACT'). ACCORDING TO THE LD.COUNSEL, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT IT IS A PENNY STOCK. A CCORDING TO THE LD.COUNSEL, THE MATERIAL REFERRED IN THE ASSESSMENT ORDER AND ORDER OF THE CIT(APPEALS) AND THE SO-CALLED REPORT OF THE IN VESTIGATION WING OF THE DEPARTMENT AT KOLKATA WERE NOT FURNISHED TO THE ASS ESSEE. THEREFORE, ACCORDING TO THE LD.COUNSEL, THE ASSESSEE COULD NOT UNDERSTAND WHAT IS THE ACTUAL REASON FOR DISALLOWANCE. MOREOVER, THE STATEMENT SAID TO BE RECORDED FROM ONE SHRI DIVYESH UPADYAYA, WAS ALSO N OT FURNISHED TO THE ASSESSEE. THEREFORE, ACCORDING TO THE LD. REPRESEN TATIVE, THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING O FFICER. 4. ON THE CONTRARY, SHRI B. SAGADEVAN, THE LD. DEPA RTMENTAL REPRESENTATIVE, SUBMITTED THAT IT IS A PENNY STOCK TRANSACTION. ACCORDING TO THE LD. D.R., THE EQUITY SHARES OF SHELL COMPANI ES WERE TRANSACTED AND THE PRICE OF EACH SHARE WAS ARTIFICIALLY INCREASED. ACCORDING TO THE LD. D.R., THE INVESTIGATION WING OF THE DEPARTMENT AT K OLKATA FOUND THAT THERE WAS CARTEL AMONG THE BROKERS WHO ARE ALL INVO LVED IN PENNY STOCKS OF SHELL COMPANIES. THEREFORE, ACCORDING TO THE LD . D.R., THE ASSESSING 3 I.T.A. NO.1691/CHNY/18 OFFICER HAS RIGHTLY DISALLOWED THE CLAIM OF THE ASS ESSEE UNDER SECTION 10(38) OF THE ACT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER, ON THE BASIS OF GENERALISED ALLEGATION, DI SALLOWED THE CLAIM OF THE ASSESSEE UNDER SECTION 10(38) OF THE ACT. THERE WA S NO SPECIFIC REFERENCE ABOUT THE ASSESSEES TRANSACTIONS IN THE ASSESSMENT ORDER. MOREOVER, THE SO-CALLED INVESTIGATION REPORT SAID T O BE SUBMITTED BY THE INVESTIGATION WING OF THE DEPARTMENT AT KOLKATA AND THE STATEMENT SAID TO BE RECORDED FROM ONE SHRI DIVYESH UPADYAYA WERE NOT FURNISHED TO THE ASSESSEE. THEREFORE, THIS TRIBUNAL IS OF THE C ONSIDERED OPINION THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFFICER. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW A RE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO FURNISH THE INVEST IGATION REPORT OF THE DEPARTMENT AT KOLKATA AND THE STATEMENT SAID TO BE RECORDED FROM SHRI DIVYESH UPADYAYA TO THE ASSESSEE AND THEREAFTER DEC IDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASO NABLE OPPORTUNITY TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 4 I.T.A. NO.1691/CHNY/18 ORDER PRONOUNCED IN THE COURT ON 3 RD DECEMBER, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GAN ESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 3 RD DECEMBER, 2018. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-12, CHENNAI 4. PRINCIPAL CIT-3, CHENNAI 5. 7: -2 /DR 6. ;( < /GF.