ITO, Ward - 3(4), Kolkata, Kolkata V. Smt. Hasi Rani Sarkar, Kolkata

ITA 1740/KOL/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70450 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2013
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 19-12-2011
• Court: TRIBUNAL
• Department Lawyers: R P NAG
• Assessee Lawyers: A K TIBREWAL
• Keywords: Capital asset; Question of law; Benefit of exemption
• Section: 260A; 10

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND . . . . ' '' ''# '#'# '#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 1739/KOL/2011 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2006-07 INCOME-TAX OFFICER, WD-3(4), KOLKATA. VS. SHRI HAR AN CHANDRA SARKAR (PAN: ALRPS6966M) (,- /APPELLANT ) (./,-/ RESPONDENT ) & & & & & / I.T.A NO. 1740/KOL/2011 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2006-07 INCOME-TAX OFFICER, WD-3(4), KOLKATA. VS. SMT. HAS I RANI SARKAR (PAN: ATUPS7005E) (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING: 28.11.2013 DATE OF PRONOUNCEMENT: 20.12.2013 FOR THE APPELLANT: SHRI R. P. NAG, SR. DR FOR THE RESPONDENT: SHRI A. K. TIBREWAL, CA $0 / ORDER PER SHRI MAHAVIR SINGH, JM: THESE TWO APPEALS BY REVENUE ARE ARISING OUT OF SEP ARATE ORDERS OF CIT(A)-I, KOLKATA IN APPEAL NO. 318/CIT(A)-I/WD-3(4)/08-09 DATED 05.09.2 011. ASSESSMENTS WERE FRAMED BY ITO, WARD-3(4), KOLKATA U/S. 143(3)(II) OF THE INCOME-TA X ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2006-07VIDE HIS SEPARATE ORDERS DATED 29.12.2008. 2. THE ONLY COMMON ISSUE IN THESE TWO APPEALS OF RE VENUE IS AGAINST THE ORDER OF CIT(A) DELETING THE ADDITION MADE BY AO BY TREATING THE T RANSACTIONS FROM SALE OF SHARES AS CAPITAL GAINS AS AGAINST ASSESSMENT MADE BY AO AS BUSINES S INCOME. SINCE GROUNDS ARE COMMON AND FACTS ARE IDENTICAL, WE ARE DISCUSSING THE GROU NDS AND FACTS AS RAISED IN ITA NO. 1740/K/2011 IN THE CASE OF SMT. HASI RANI SARKAR. THE REVENUE HAS RAISED FOLLOWING THREE GROUNDS: 1.THE LD. CIT(A)-1, KOLKATA HAS ERRED ON THE FACTS & CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.28,96,562/- WHICH WAS M ADE BY THE ASSESSING OFFICER. 2 ITA NO.1739 & 1740/K/2011 HARAN CH. SARKAR & HASI RANI SARKAR.., AY:2006-07 2. THE LD. CIT(A)-1, KOLKATA, HAS ERRED IN NOT REAL IZING ABOUT THE INFLATED RATE AT RS.295.90 & 295.50 PER SHARE IN OFF MARKET. 3. THE LD. CIT(A)-1, KOLKATA, HAS GROSSLY ERRED IN NOT REALIZING ABOUT THE CIRCUMSTANCES UNDER WHICH THE TRANSACTIONS CONCERNS CLAIM TO HAVE TAKEN PLACE AS ELABORATELY DISCUSSED IN THE ASSESSMENT ORDER. 3. BRIEFLY STATED FACTS ARE THAT ASSESSEE FILED HER RETURN OF INCOME FOR AY 2006-07 CLAIMING EXEMPTION OF LTCG OF RS.28,96,562/- U/S. 10(38) OF THE ACT ON SALE OF 10000 SHARES OF NIHARIKA INDIA LTD. THE AO WHILE COMPLETING THE AS SESSMENT, TREATED THE LTCG AS BOGUS AND DISALLOWED THE EXEMPTION U/S. 10(38) OF THE ACT. T HE ASSESSEE PURCHASED 10000 SHARES OF NIHARIKA INDIA LTD. ON 24.03.2004 DURING THE FY 200 3-04 RELEVANT TO AY 2004-05. ACCORDING TO ASSESSEE, THE SHARES WERE PURCHASED FROM BUBNA S TOCK BROKING SERVICE PVT. LTD. OF 4, FAIRLIE PLACE, KOLKATA-700 001, A REGISTERED SHARE BROKER O F KOLKATA STOCK EXCHANGE LTD. THESE SHARES WERE PURCHASED BY ASSESSEE FROM SUCH BROKER IN PURSUANCE OF A CONTRACT NOTE NO. C0040322/024 ISSUED BY HIM AT THE PREVAILING MARKET RATE. ASSESSEE MADE PAYMENT FOR PURCHASE OF SHARES BY ACCOUNT PAYEE CHEQUE NO. 1281 93 DATED 26.03.2004 DRAWN ON UNITED BANK OF INDIA, HOWRAH BRANCH FROM HER SAVINGS BANK ACCOUNT NO. 94757. THE PURCHASE CONSIDERATION WAS AT A SUM OF RS.50,200/- AND THE A SSESSEE MADE PAYMENT OF RS.55,220/- BY DEBITING THE SAID AMOUNT IN HER BOOKS OF ACCOUNT T O SHARE INVESTMENT ACCOUNT. EVEN THE SHARE BROKER HAS CONFIRMED THE RECEIPT OF EXCESS PAYMENT. THESE SHARES PURCHASED BY ASSESSEE WERE DELIVERED BY THE BROKER ON 29.03.2004 FROM HIS DEMA T ACCOUNT MAINTAINED BY ASSESSEE WITH SHIVMANGAL SECURITIES (P) LTD., A REGISTERED DEPOSI TORY PARTICIPANT IN THE ASSESSEES DEMAT ACCOUNT MAINTAINED WITH HDFC BANK LTD., ANOTHER DEP OSITORY PARTICIPANT. THESE DETAILS WERE PRODUCED BEFORE THE AO DURING THE COURSE OF ASSESSM ENT PROCEEDINGS I.E. COPY OF ASSESSEES BANK ACCOUNT, DEMAT ACCOUNT, EVIDENCING PURCHASE OF SHARES, DELIVERY OF SHARES OF NIHARIKA INDIA LTD. THESE SHARES WERE SOLD BY ASSESSEE THRO UGH THE SAME BROKER IN 3 LOTS DURING THE PREVIOUS YEAR RELEVANT TO AY 2006-07 AFTER COMPLETI ON OF ONE YEAR. EVEN THE STT WERE CHARGED ON THE TRANSACTION DURING PURCHASE AS WELL AS DURING SALES. BUT THE AO TREATED THE TRANSACTION OF SALE AND PURCHASE AS BOGUS AND MADE ADDITION OF THIS LTCG OF RS.28,96,562/- AS UNACCOUNTED MONEY CLAIMED AS LTCG EXEMPT U/S. 10(38 ) OF THE ACT. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO RELYING ON THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. BHAGWATI PRASAD AGARWAL DATED 2 9.04.2009 REPORTED IN (2009) TMI 34738 ALLOWED THE CLAIM OF ASSESSEE BY OBSERVING AS UNDER : I HAVE CAREFULLY CONSIDERED THE ORDER OF THE AO, S UBMISSION OF THE APPELLANT, REMAND REPORT AND REPLY TO THE REMAND REPORT BY THE APPELL ANT. THE AO HAS NOT ALLOWED EXEMPTION U/S 10(33) FOR LTCG ARISING FROM THE SALE OF SHARES . THE AO DISALLOWED ASSESSEES CLAIM MAINLY ON THE GROUND THAT TRANSACTION WAS NOT ROUTE D THROUGH THE STOCK EXCHANGE AND HELD THAT TRANSACTIONS WERE NOT GENUINE. 3 ITA NO.1739 & 1740/K/2011 HARAN CH. SARKAR & HASI RANI SARKAR.., AY:2006-07 THE APPELLANT HAS SUBMITTED THAT THE TRANSACTION WE RE CARRIED OUT WITH THE REGISTERED SHARES BROKER AND IN THIS REGARD COPY OF THE CONTRA CT NOTES, THE APPELLANTS DEMAT A/C AND COPIES OF BANK PASSBOOK EVIDENCING THE TRANSACTIONS TAKEN PLACE. IT HAS FURTHER SUBMITTED BY THE APPELLANT THAT THERE IS NO REQUIREMENT OF LA W THAT TO CLAIM EXEMPTION U/S 10(38) THE TRANSACTION IS REQUIRED TO BE ROUTED THROUGH STOCK EXCHANGE. THE ONLY REQUIREMENT WAS THAT THE INCOME ARISING FROM THE TRANSFER OF A LONG -TERM CAPITAL ASSET BEING AN EQUITY SHARE IN A COMPANY WOULD BE EXEMPT U/S 10(38) WHERE SUCH TRANSACTION S CHARGEABLE TO SECURITIES TRANSACTION TAX. THE APPELLANT HAS THUS CLAIM THAT WHEN THE TRANSACTIONS ARE PROVED, ACCOUNTED FOR, STT CHARGED, DOCUMENTED AND SUPPORTED BY EVIDENCE THEN THE SAME CANNOT BE HELD TO BE BOGUS OR COLORFUL. THE APPELLANT HAS ALSO RELIED UPON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. BHAGWATI PRASAD AGARWAL DELIVERED O N 29TH APRL 2009 REPORTED IN 2009- TMI- 34738. THE HONBLE HIGH COURT IN AN APPEAL U/S 260A BY REVENUE HELD AS UNDER: THE ASSESSEE PRODUCED BEFORE THE COMMISSIONER OF I NCOME TAX (APPEAL) THE CONTRACT NOTES, DETAILS OF HIS DEMAT ACCOUNT AND, A LSO, PRODUCED DOCUMENTS SHOWNG THAT ALL PAYMENTS WERE RECEIVED BY THE ASSE SSEE THROUGH BANK. WE DO NOT, THEREFORE, THINK THAT THS APPEAL INVOLVES ANY SUBS TANTIAL QUESTION OF LAW REQURING INTERFERENCE BY THIS COURT UNDER SECTION 260A OF TH E LNCOME TAX ACT, 1961. THE APPEAL IS, THEREFORE, SUMMARILY DISMISSED. LN THE REMAND REPORT THE LD. AO HAS SIMPLY RELIED O N THE OBSERVATONS MADE IN THE IMPUGNED ASSESSMENT ORDER. THE ASSESSEE HAD RELIED ON VARIOUS DECISIONS OF ITAT AND ALSO THE DECSON OF HONBLE CALCUTTA HIGH COURT. HOWEVER, HE HAS NOT DEALT WITH THEM. LT IS SUBMITTED THAT THE DECSION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. BHAGWATI PRASAD AGAIWAL REPO RTED IN 2009-TM-34378 IS A BINDING DECSON ON ALL THE AUTHORITIES BELOW IT. T HE HONBLE HIGH COURT HAS UPHELD THE DECISION OF THE ITAT IN THAT CASE BY PAS SNG THE ORDER AS STATED HEREUNDER: COMMISSIONER OF LNCOME TAX (APPEAL), INTER ALIA, DE LETING THE ADDITION OF RS.34,81,165/-, WHICH WAS TREATED AS INCOME FROM OT HER SOURCES BASED ON THE INFORMATION RECEIVED FROM THE CALCUTTA STOCK EX CHANGE. THE AMOUNT WAS CLAIMED BY THE ASSESSEE AS LONG TERM CAPITAL GA INS. LT IS SUBMITTED BY MR. PRTHU DUDHARIA, LEARNED ADVOCATE FOR THE REVEN UE THAT THE RECORDS FROM THE CALCUTTA STOCK EXCHANGE SHOWS THAT THE NAM E OF THE ASSESSEE IS NOT APPEARING IN RESPECT OF THE TRANSACTIONS-N-QUE STION. THE TRBUNAL FOUND THAT THE CHAN OF TRANSACTION ENTERED INTO BY THE ASSESSEE HAVE BEEN PROVED, ACCOUNTED FOR, DOCUMENTED AND SUPPORTED BY EVIDENCE. THE ASSESSEE PRODUCED BEFORE THE COMMISSIONER OF LNCOME TAX (APPEAL) THE CONTRACT NOTES, DETAILS OF HIS DEMAT ACCOUNT AND, A LSO, PRODUCED DOCUMENTS SHOWING THAT ALL PAYMENTS WERE RECEIVED B Y THE ASSESSEE THROUGH BANK. WE DO NOT, THEREFORE, THINK THAT THI S APPEAL INVOLVES ANY SUBSTANTIAL QUESTION OF LAW REQUIRING INTERFERENCE BY THIS COURT UNDER SECTION 260A OF THE INCOME TAX ACT, 161. THE APPEA L IS, THEREFORE, SUMMARILY DISMISSED. THE FULL TEXT OF THE DECISION HAD ALREADY BEEN FURN ISHED ON THE LAST DATE OF HEARING. THE FACTS IN THE PRESENT CASE ARE SIMILAR TO THE FA CTS BEFORE THE HONBLE CALCUTTA HIGH COURT. LN THIS CASE ALSO THE TRANSACTIONS ARE ALL SUPPORTED BY CONTRACT NOTES, DEMAT ACCOUNTS, CONFIRMATION FROM BROKERS AND ALL T RANSACTIONS SUPPORTED BY ACCOUNT PAYEE CHEQUES. ALL DOCUMENTARY EVIDENCES WE RE FURNISHED BEFORE THE LD. AO AND ALSO BEFORE YOUR HONOUR. 4 ITA NO.1739 & 1740/K/2011 HARAN CH. SARKAR & HASI RANI SARKAR.., AY:2006-07 LN VIEW OF THE AFORESAID FACTS AND EVIDENCES ON REC ORD, IT IS SUBMITTED THAT THE ASSESSING OFFICER IS NOT JUSTFIED IN TREATING THESE TRANSACTIONS AS NON GENUINE THEREBY DENYING THE BENEFIT OF EXEMPTION OF SEC. 10 (38) RELATING TO LONG TERM CAPITAL GAIN ON SHARES AND SECURTIES. VARIOUS TRIB UNALS THROUGHOUT THE COUNTRY HAVE TAKEN THE SAME VIEW. THE APPELLANT ALSO RELIED UPON THE JUDGMENT OF JURI SDICTIONAL ITAT IN THE CASE OF ITO VS. NDHI TREXIM LTD. IN ITA NO.1414/K/06. IN VIEW OF THE FOREGOING DISCUSSION AND JUDGMENT OF THE JURISDICTIONAL HIGH COURT OF CALCUTTA IN THE CASE OF CIT VS. BHAGWATI PRASAD AGA RWAL REPORTED IN 2009-TMI-34378 (SUPRA) WHEN THE TRANSACTONS ARE ACCOUNTED FOR, ST T CHARGED DOCUMENTED AND SUPPORTED EVIDENCE INCLUDING CONTRACT NOTES TRANSACTION ARE G ENUNE AND CANNOT BE HELD AS BOGUS, THE APPELLANT GETS RELIEF ON THIS ISSUE. THE AO IS DIRECTED TO ALLOW THE EXEMPTION U/S 10(38) THE IT ACT AS PER THE PROVISIONS OF SECTION 10(38) OF THE IT ACT. AGGRIEVED, REVENUE CAME IN APPEAL BEFORE US. 4. BEFORE US, THE COMPLETE DETAILS I.E. THE TRANSAC TIONS WERE CARRIED OUT WITH REGISTERED BROKER, COPY OF CONTRACT NOTES, ASSESSEES DEMAT AC COUNT, COPY OF BANK PASS BOOKS ETC. WERE PRODUCED AND PLACED IN ASSESSEES PAPER BOOK. WE F IND THAT THE AO CARRIED OUT THE ENTIRE EXERCISE JUST ON THE BASIS OF CONJECTURE AND SURMIS ES AND DISALLOWED THE EXEMPTION CLAIMED BY ASSESSEE WITHOUT ANY BASIS. EVEN ASSESSEE HAS PROV ED THAT THE TRANSACTIONS ARE ACCOUNTED FOR AND STT IS ALSO CHARGED ON THESE TRANSACTIONS. THE ASSESSEE HAS COMPLETE DOCUMENTATION SUPPORTED BY EVIDENCE, WHICH THE AO NEVER TRIED TO INVESTIGATE. THE ASSESSEE HAS PRODUCED COMPLETE EVIDENCE TO SUPPORT HER CLAIM AND CIT(A) H AS RIGHTLY TREATED THE SALE TRANSACTION AS LTCG AND WE ALSO CONFIRM THE SAME. REVENUES APPEA L IS DISMISSED. 5. SIMILAR ARE THE FACTS IN THE CASE OF SHRI HARAN CHANDRA SARKAR, ITA NO.1739/K/2011. SINCE WE DISMISS THE REVENUES APPEAL IN ITA NO. 17 40/K/2011 IN THE CASE OF SMT. HASI RANI SARKAR, THIS APPEAL OF REVENUE IN ITA NO. 1739/K/20 11 IN THE CASE OF SHRI HARAN CHANDRA SARKAR IS DISMISSED AS THE FACTS ARE IDENTICAL. 6. IN THE RESULT, APPEALS OF REVENUE ARE DISMISSED. 7. ORDER IS PRONOUNCED IN THE OPEN COURT ON 20.12.2 013 SD/- SD/- . . . . ' '' ''# '#'# '# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 20TH DECEMBER, 2013 12 '3' 4 JD.(SR.P.S.) 5 ITA NO.1739 & 1740/K/2011 HARAN CH. SARKAR & HASI RANI SARKAR.., AY:2006-07 $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT ITO, WARD-3(4), KOLKATA. 2 ./,- / RESPONDENT SMT. HASI RANI SARKAR, 5/1, LAKE AVE NUE, KOLKATA-700 026 & SHRI HARAN CHANDRA SARKAR , BALTIKURI, BAKULT ALA, HOWRAH-711402 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .