Anusha Maheshwari, New Delhi V. ITO WARD - 39(5), New Delhi

ITA 1808/DEL/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 3158 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 02-11-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ISHTIYAQUE AHMED
• Section: 63; 2; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A” DELHI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.1808/DEL/2020 Assessment Year 2015-16 Anusha Maheshwari, KU-112, Vishakha Enclave, Pitam Pura, Delhi. v. ITO, Ward-39(5), New Delhi. TAN/PAN: AIPPM1192E (Appellant) (Respondent) I.T.A. No.1809/DEL/2020 Assessment Year 2015-16 Shruti Maheshwari, KU-112, Vishakha Enclave, Pitam Pura, Delhi. v. ITO, Ward-39(5), New Delhi. TAN/PAN: AMYPM0748F (Appellant) (Respondent) Appellant by: Shri A.K. Srivastava, CA Respondent by: Shri Ishtiyaque Ahmed, CIT Date of hearing: 28 03 2022 Date of pronouncement: 04 05 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: The c ap ti one d ap p eal s ha ve be en f ile d a t the i ns ta nc e o f the ass es se es a ga in st t he re vi si on al o rd er of the Pr . Co mmi ssi on er of Inc o me Ta x (A pp e als ), [ ‘P r. CI T’ in s hor t] , da te d 22.0 4. 20 20 p ass ed un der S ec ti on 26 3 of th e I nc o me Ta x Ac t, 1 96 1 ( th e Ac t) wh er eb y the as se ss me nt o rde r p as se d b y t he A ss es si ng Of f icer d ate d I.T.A. No.1808 & 1809/Del/2020 2 27. 12 .2 01 7 u nd er S ect io n 14 3( 3) of th e Ac t co nc er nin g As ses s me nt Yea rs 20 15 -1 6 w er e so ug ht to b e s et a sid e f or d e n ov o a s ses s men t i n ter ms of su per vi si o nar y j u ri sdi ct io n. 2. As p er t he g ro un ds of ap pea l, t he asse ss ee h as sou ght t o cha ll en ge th e j ur is dic ti on as su me d b y th e Pr. CI T unde r Sec ti on 2 63 of th e Ac t an d a s a co ro ll ar y, so ug ht t o i mp u gn th e re vi si ona l or de r pas se d b y P r. CI T. 3. Bri ef l y st ate d, th e ret ur n of t he a ss ess ee wa s sel ect ed f or co mpl et e scr ut in y b y C AS S. T he rea so ns as p er C AS S wer e “su sp ic io us sa le tr a nsa ct io n i n sh are [ pen n y s to ck ta b i n IT S)” . The ass es s men t w as c o mp let ed un der Se ct ion 14 3( 3) of the Act b y t he As ses si ng Of f icer acc ep ti ng t he r et ur n of inc o me vide ord er d at ed 27. 12 .2 01 7. Th er e af ter , th e P r. CI T i n ex er ci se of its rev is io na r y po wer s, is su ed sh o w ca us e n ot ice da t ed 1 1. 03 .2 02 0 und er S ec ti on 26 3 of th e Ac t r eq uir in g t he a ss es se e to s ho w ca us e a s to w h y th e ass es s men t wa s f ra me d un de r Se ct io n 143 (3 ) of the Act sho ul d no t be mod if ied /s et a s ide on t he g ro un d tha t su ch o rd er i s err on eo us ins of ar a s i t is pre j udi ci al t o t he i nt er est of the Re ven ue . The sh ow cau se no ti ce i ss ue d in th is re ga rd i s ex tr ac ted he re in f or re ad y ref er enc e. T o , A n u s h a M a h e s h w a r i K U - 1 1 2 V i s h a k h a E n c l a v e , P i t a m P u r a D e l h i 1 1 0 0 8 8 , D e l h i I n d i a P A N : A I P P P M 1 1 9 2 E A s s e s s m e n t Y e a r : 2 0 1 5 - 1 6 D a t e d 1 1 / 0 3 / 2 0 2 0 D I N & L e t t e r N o . I T B A / C O M / F / 1 7 / 2 0 1 9 - 2 0 / 0 1 2 6 4 5 1 6 8 3 ( 1 ) S i r / M a d a m / M / s . S u b j e c t : N o t i c e u / s . 2 6 3 o f t h e I n c o m e T a x , 1 9 6 1 , in t h e c a s e o f M s . A n u s h a M a h e s h w a r i ( P A N : A I P P M 1 1 9 2 E ) f o r A . Y . 2 0 1 5 -1 6 r e g . I.T.A. No.1808 & 1809/Del/2020 3 1 . T h e I n c o m e t a x r e t u r n d e c l a r i n g t a x a b l e i n c o m e of R s . 1 4 , 8 2 , 7 7 0 / - w a s f i l e d o n 2 9 / 0 9 / 2 0 1 5 . T h e c a s e w a s s e l e c t e d f o r C o m p l e t e S c r u t i n y b y C A S S . T h e r e a s o n f o r s e l e c t i o n w a s “ s u s p i c i o u s sa l e t r a n s a c t i o n i n s h a r e s ( P e n n y S t o c k t a b i n I T S ) ’ ’ . A s s e s s m e n t w a s co m p l e t e d u / s 1 4 3 ( 3 ) o n 2 7 . 1 2 . 2 0 1 7 a t r e t u r n e d i n c o m e . 2 . T r a d i n g i n 4 0 0 0 s h a r e s o f M / s . C h a n n e l N i n e E n t er t a i n m e n t L t d h a s b e e n m a d e . T h e a s s e s s e e h a s s o l d 4 0 0 0 s h a r e s a t R s . 1 7 , 4 3 , 6 0 0 / - T h e a s s e s e e h a s p u r c h a s e d s h a r e s a t R s . 2 . 5 e a c h a n d s ol d a t R s 4 3 5 . 7 5 / - e a c h . T h e p r o f i t o f t h e s h a r e h a s b e e n r o u t e d t h r o ug h s h a r e t r a d i n g a c c o u n t . A f t e r s e l l i n g o f f l o s s i n t r a d i n g s h a r e s of o t h e r c o m p a n y , i n c o m e o f R s . 9 , 4 1 , 3 5 8 / - h a s b e e n s h o w n a s o t h e r i nc o m e i n t h e c r e d i t s i d e o f p r o f i t a n d l o s s a c c o u n t . 3 . O n p e r u s a l o f c a s e r e c o r d s , i t h a s b e e n f o u n d th a t a s t h e A O h a s n o t m a d e p r o p e r e n q u i r y a n d v e r i f i c a t i o n o f s a l e a nd p u r c h a s e o f t h e s h a r e s . T h e v a r i o u s i n f o r m a t i o n a n d c o p y o f s t a t e m en t r e c o r d e d b y t he I n v e s t i g a t i o n w i n g o f s h a r e b r o k e r , a c c o m m o d a t i o n en t r y p r o v i d e r e t c , a v a i l a b l e i n I n d i v i d u a l t r a n s a c t i o n s s t a t e m e n t , h a ve n o t b e e n u s e d b y t h e A O . A s p e r i n f o r m a t i o n a v a i l a b l e , t h e s c r i p t M /s C h a n n e l N i n e E n t e r t a i n m e n t L t d h a s d e s c r i b e d a s p e n n y s t o c k . I n v a r i o u s s t a t e m e n t r e c o r d e d b y t h e i n v e s t i g a t i o n w i n g , i t h a s b e e n f o un d t h a t b o g u s t r a n s a c t i o n s h a v e b e e n c o n d u c t e d b y v a r i o u s b r o k e r s a n d a c c o m m o d a t i o n e n t r y p r o v i d e r i n t h i s s c r i p t , a n d b og u s p r o f i t / l o s s h a v e b e e n g e n e r a t e d . 4 . T h e A O h a s n o t m a d e s o m e c r u c i a l e n q u i r y a b o u t p r o f i t g e n e r a t e d o n s a l e o f p e n n y s t o c k l i k e a b n o r m a l i n c r e a s e i n p ri c e , h i s t o r y o f t h e a s s e s s e e i n t r a d i n g o f p e n n y s t o c k a n d e x p e r i e n c e of t r a d i n g i n s h a r e s e t c . 5 . T h e f a c t s m e n t i o n e d a b o v e s h o w s t h a t A O h a s n o t m a d e p r o p e r i n q u i r y a n d v e r i f i c a t i o n i n r e s p e c t o f t r a d i n g o f pe n n y s t o c k . T h e a s s e s s m e n t o r d e r p a s s e d b y t h e A s s e s s i n g O f f i c e r i n r e s p e c t o f A . Y . 2 0 1 5 - 1 6 i s e r r o n e o u s i n s o f a r a s i t i s p r e j u d i c i a l t o t h e i n t e r e s t s o f t h e r e v e n u e a s t h e A O h a s p a s s e d t h e a s s e s s m e n t o r de r w i t h o u t m a k i n g I.T.A. No.1808 & 1809/Del/2020 4 i n q u i r e s o r v e r i f i c a t i o n w h i c h s h o u l d h a v e b e e n m a de d u r i n g t h e a s s e s s m e n t p r o c e e d i n g s . T h e r e f o r e , I i n t e n d t o i n i ti a t e p r o c e e d i n g s u / s 2 6 3 o f t h e I n c o m e T a x A c t a n d p a s s a s u i t a b l e o r d e r. 6 . S e c t i o n 2 6 3 o f t h e I n c o m e T a x A c t 1 9 6 1 s t a t e s t ha t “ T h e P r i n c i p a l C o m m i s s i o n e r o r] C o m m i s s i o n e r m a y c al l f o r a n d e x a m i n e t h e r e c o r d o f a n y p r o c e e d i n g u n d e r t h i s A c t, a n d i f h e c o n s i d e r s t h a t a n y o r d e r p a s s e d t h e r e i n b y t h e A s s es s i n g O f f i c e r i s e r r o n e o u s i n s o f a r a s i t i s p r e j u d i c i a l t o t h e i n te r e s t s o f t h e r e v e n u e , h e m a y , a f t e r g i v i n g t h e a s s e s s e e a n o p p o rt u n i t y o f b e i n g h e a r d a n d a f t e r m a k i n g o r c a u s i n g t o b e m a d e s u c h in q u i r y a s h e d e e m s n e c e s s a r y , p a s s s u c h o r d e r t h e r e o n a s t h e c i rc u m s t a n c e s o f t h e c a s e j u s t i f y , i n c l u d i n g a n o r d e r e n h a n c i n g o r mo d i f y i n g t h e a s s e s s m e n t , o r c a n c e l l i n g t h e a s s e s s m e n t a n d d i r e c ti n g a f r e s h a s s e s s m e n t . E x p l a n a t i o n 1 . - ... ... ... ... . . E x p l a n a t i o n 2 . - F o r t h e p u r p o s e s o f t h i s s e c t i o n , it i s h e r e b y d e c l a r e d t h a t a n o r d e r p a s s e d b y t h e A s s e s s i n g O f f ic e r s h a l l b e d e e m e d t o b e e r r o n e o u s i n s o f a r a s i t i s p r e j u d i c ia l t o t h e i n t e r e s t s o f t h e r e v e n u e , i f , i n t h e o p i n i o n o f t h e P r i n c i p a l C om m i s s i o n e r o r C o m m i s s i o n e r 1 . t h e o r d e r i s p a s s e d w i t h o u t m a k i n g i n q u i r i e s o r v e r i f i c a t i o n w h i c h s h o u l d h a v e b e e n m a d e ; 2 . t h e o r d e r i s p a s s e d a l l o w i n g a n y r e l i e f w i t h o u t i n q u i r i n g i n t o t h e c l a i m ; 3 . t h e o r d e r h a s n o t b e e n m a d e i n a c c o r d a n c e w i t h a n y o r d e r , d i r e c t i o n o r i n s t r u c t i o n i s s u e d b y t h e B o a r d u n d e r s e c t i o n 1 1 9 ; o r 4 . t h e o r d e r h a s n o t b e e n p a s s e d i n a c c o r d a n c e w i th a n y d e c i s i o n w h i c h i s p r e j u d i c i a l t o t h e a s s e s s e e , r e n d e r e d b y th e j u r i s d i c t i o n a l H i g h C o u r t o r S u p r e m e C o u r t i n t h e c a s e o f t h e a s s es s e e o r a n y o t h e r p e r s o n . ’ ’ 7 . I n t h i s c o n n e c t i o n , y o u a r e r e q u i r e d t o s h o w c a us e a s t o w h y t h e I.T.A. No.1808 & 1809/Del/2020 5 a s s e s s m e n t m a y n o t b e r e f r a m e d u / s 2 6 3 o f t h e I . T . A c t , 1 9 6 1 . Y o u m a y f i l e y o u r r e p l y i n t h e o f f i c e o f t h e u n d e r s i g n e d a lo n g w i t h r e c o r d s o n 1 7 . 0 3 . 2 0 2 0 3 . 3 0 P . M . a t R o o m N o . 1 9 0 4 , 1 9 t h F l o o r , E - 2 B l o c k D r . S . P . M u k h e r j e e C i v i c C e n t r e , M i n t o R o a d , N e w D e l h i – 1 1 0 0 0 2 . ” 4. As p er t he sh ow c a use no ti ce, the Pr .C IT o bs er ved on t he bas is of pe ru sal of c as e re cor ds t ha t t he ass es se e i s en ga ge d i n sh are tra di ng act iv it ie s a nd h as in te r a li a t rad ed in 40 00 sh ar es of M /s . Ch an nel Ni ne E nt e rta in me nt L td . Wh i le th e as se ss ee h as pur cha se d sha re s at a meag re cos t of Rs .2 .5 pe r sh are , t he s ai d s har e w ere eve nt ua ll y s ol d at ast ro no mi ca l p ri ce of Rs .4 35 .7 5 p er s har e. It w as all eg ed th at t he As ses si ng Of f ice r ha s o mit te d t o ma ke pr op er inq ui r y a nd v er if ic ati on s ab ou t th e pr of its g en er ate d on sal e of suc h pen n y st oc k a nd f ai led to en qui re in to abn or ma l i ncr ea se i n pr ic es of the s ha re s etc . Th e res po ns e an d ex pla na ti on of the a sse ss ee i n res po ns e t o t he sh o w c au se no tic e was tak en no te of b y t h e P r. CIT i n its o rd er . On c on si der at io n th ere of , th e Pr. CI T pa ss ed t h e rev is io na l ord er u nd er Sec ti on 2 63 of th e A c t r. w. E xp la nat io n 2 the re to wh ere b y t he a sse ss me nt or de r wa s set as id e wi th a di re c tio n to t he As ses si ng Of f icer to mak e f res h a ss ess me nt de no vo af ter ma ki ng sui ta bl e e nq uir ie s to war ds tr an sa ct ion s i n p en n y s toc ks an d tax ab il it y of th e s a le co ns ide ra ti on u n der S ec tio n 68 of t he Ac t r .w . Sec ti on 11 5B B E o f the A ct as per t he d ir ec tio ns , s et out in th e rev is io na l o rd er . 5. Ag gri ev ed b y t he a f ores ai d ac ti on of the P r. CI T, t he re sp ect iv e ass es se es a re in appe al b ef ore the T ri bu na l ag i tat in g th e su per vi si on ar y j ur i sdi ct io n u su rp ed b y th e P r. CI T und er S ect io n 2 63 of the Ac t a s w el l as t he co ns eq ue nti al o rd er pa ssed un der Se ct io n 26 3 of th e Act . 6. Ld. co un sel f o r th e ass es se e br oa dl y re ite ra ted th e su b mis sio ns I.T.A. No.1808 & 1809/Del/2020 6 ma de b ef or e t he Pr. CI T a nd su b mi tte d i n f ur the ra nc e th at th e all eg at io n of the P r.C IT tha t A ss es si ng Of f ice r h as f ai l ed t o ma ke req ui si te i nq ui r y and ve rif ic at io n on s al e of C h annel Ni ne Ent er ta in me nt Lt d. sh ar es i s f ac tu al l y i nc or re ct. Ela bo rat in g th e bac kg ro un d of ass e sse e, t he l d. co u nse l poi nt ed o ut t ha t t he as se ss ee is M BA Fin an ce a nd al so pas se d ex a mi na ti on s co nd uc ted b y th e sto ck e xc ha ng e an d the mar ke t re gu lat or , i.e ., S E BI i n the f ie ld sec ur it y mar ke t. The a ss es see i s thu s acc o mp lis he d an d has suf f ici ent tr ac k r eco rd of in ves t m ent in th e eq ui t y ma rk et con ti nu ou sl y. I t w a s po in te d ou t t hat t he p rof it ari si ng f r o m s al e of sha re s h as b een d ecl ar ed as a ‘ bu si nes s in co me’ i n t he or di nar y cou rs e f or t he r ea so ns of p lu ng e ta ken in the st oc k mar ke t w it h reg ul ar it y. It wa s t hu s su b mit te d th at the wh ole f ac ts a re req uir ed t o be ap pre ci at ed in th e p ecu li ar ba ck gr ou nd of th e a ss es se e c onc er ne d. It wa s s ub mi tt ed th at the re le va nt evi de nc es an d docu me nt s con ce rn in g t he p ur cha se an d s ale tr a nsa ct io n h av e be en dul y f il ed bef or e t he A ss es si n g Of f ice r as ca ll ed f or. It w as f u rt her su b mit te d tha t th e a ll eg ed ab nor ma l in cre as e in the p ri ce of t he co mp an y, i. e., Ch an nel E nt er tai n me nt Lt d. i n i ts e lf ca nn ot be t he re as on f or all eg in g t ra ns act io ns to be cl an de st in e o r i nd ul ge nce of the a sse ss ee in an y ma nn er . T h e p ri ce of t he s har es we re mar ket o ri ent ed b ei ng lis te d o n t he s to ck exc ha ng e. Th e as se sse e h as en ter ed in t o a mea ge r pur ch as e of 10 00 s har es o n 1 0. 11 .2 01 2 an d up on the is s ue of bo gu s sha re , the a ss es se e o wn ed 4 00 0 sh a res p os t bo nu s. Thes e sh ar es wer e e ve nt ual l y so l d in th e s to ck ma rk et a nd th e resu lt an t prof i t w as dec la re d a s bu sin e ss in co me . I t was f urt her p oi nte d o ut th at th e ass es s men t wa s f ra me d un de r CA S S. The as ses se e w as r equ ir ed t o exp la in th e CA SS rea so ns i. e. ‘s us pic io us sa le tr ans act io ns in sha re s’ (pe nn y s to c k T AR in I T S). It was f u rt he r cont en ded th at the As ses si ng Of f icer has mad e po in te d inq ui ri es a nd e lic i ted r ep li es I.T.A. No.1808 & 1809/Del/2020 7 the re on . I t w as p oin te d o ut th at ev en i n t he co nt ext of Sec ti on 10( 38 ) i.e . ex e mpt Lo ng Te r m C ap it al Gai n, t he H on’bl e Del hi H ig h Co urt i n P CI T vs . S mt . Kr is hn a De v i & Or s in I TA N o.1 25 /2 02 0 jud g men t da te d J a nua r y 1 5, 20 21 o b ser ve d tha t qu an tu m l ea p i n pri ce of s ha re wi th out a dv er se ev id en ce wo ul d no t jus tif y a dd it io n un der Sec ti on 6 8 r. w. S ect io n 1 15 BB E of the Act . T he ga ins a ri si ng on sa le of s ha re s i n th e in sta nt c ase w ere d ul y r epor te d i n t he b oo ks of acc ou nt as ‘ bu s ine ss i nco me ’ an d the ta x we re paid on no r mal rat e. It wa s su b mit ted t hat it i s n ot th e ca se w he re th e a sse ss ee ha s cla i med an y k in d o f exe mpt io n f ro m t axa ti on on sa le of sha re s. It i s a cas e w he re t he ass es see ha s tr ea ted the in co me a risi ng f ro m i mpu gne d sa le of s har es a s or di nar y b usi ne ss a ct iv it y, an d the ref o re, no pr ej ud ice ca n be en vi sa ge d t o t he Re ve nu e f ro m su ch tra ns ac tio ns . It w as su b mit ted t hat a n on -s pe aki n g o rde r of t he As ses si ng Of f icer b y i ts elf wi ll n ot g ive ari se to t he p re su mp tio n of lac k of inq ui r y. T he ex te nt a nd man ner of in qu ir y is i n qu est io n wh ich c an no t be or din ar il y d ic ta te d b y th e re vis io na l Co m mi ssi on er . 7. Ld. D R f o r th e Re ven ue , on t he ot he r h an d, re li ed u po n t he act io n of the P r. CI T. It wa s su b mit te d tha t n o wo rth- wh ile i nq ui r y was co nd uc te d b y the As se ss in g O f f icer in th e c ou r se of t he ass es s men t. I t w as s ub mi tt ed t ha t mer e co ll ec tio n of basi c doc u men ts or i nf o r ma ti on c an no t b e equ ate d w it h th e req ui sit e inq ui r y on t he co nt our s of Se cti on 2 63 of th e A ct r. w. Ex pla na ti on -2 the re to . A r ef er en c e wa s mad e t o t he dec is io n of C o- or di nat e B en ch in P oo ja G upt a Vs. P CI T i n I TA No .4 05 7/ Del /2 01 8 wh ere th e rev is io na l a ct io n o f the P r. CI T wa s end or se d b y t he C o-o rd in at e Be nch . I t w as th u s co nt en de d t ha t f or si mi la rit y of rea so n, no inf er en ce wi th t he r evi si on al or de r is c all ed f or. 8. W e h ave c ar ef ul l y c o nsi de re d th e riva ls s ub mi ss io ns a nd I.T.A. No.1808 & 1809/Del/2020 8 per us ed t he i mp ug ned r ev is io nal o rd er as w el l as the ass es s men t ord er u nd er re vi si o n. Du ri ng t he as se ss me nt ye a r, in qu est io n, t he ass es se e h as rec ei v ed Rs. 17 ,4 3, 60 0/ - o f Chan ne l N ine E nt ert ai n men t on sa le of 40 00 s ha res w hi ch i s al leg e d to be u ne xpla in ed cash c re di t ari si ng f ro m s al e of pe nn y s to ck i n s ub sti tu ti on of ‘ bu si ne ss in co me ’ of f ered b y a ss es se e . 8.1 In t he matt er , i t i s the ca se of th e a ss e sse e tha t t he as se ss me nt was se lec te d f or s c rut in y s pec if ic all y f or ver if ic ati on of tran sa ct io ns un der ta ke n b y t he ass es se e i n pe nn y sto ck . A d et ailed s ho w c au se not ic e u nd er Sec ti o n 14 2( 1) wa s i ss ue d on 08 .1 2. 20 17 al leg in g t ha t cap it al ga in s a ri si ng f r o m tr an sa cti o n i n s ha re s of Ch ann el N ine Ent er ta in me nt L td . have no t bee n d is clo se d in t he ret ur n an d th at suc h g ai ns , b as ed o n re po rt of th e i nv est ig at io n w in g K o lka ta /D el hi is b o gu s an d a cc o mmo d at io n e ntr y i n re sp ec t of w hi ch exe mp ti on un der Sec ti on 1 0( 3 8) of the Act ha s bee n in co rr ect ly c l ai med . Th e ass es se e wa s sp ec if ica ll y sh ow c au s ed a s to w h y t he rece ip t of Rs .1 7,4 3, 60 0/ - s ho uld no t be tre at ed a s un ex pl ai ned ca sh cre di t. T he ass es se e f ile d a re pl y to th e af o res ai d s ho w ca us e n ot i ce w he re in , bes id es f u rn is hi ng nec es sa r y de ta ile d inf or ma ti on an d do cu men ta r y evi de nc es in r el at i on t o t ra ns act io ns , it w as al so su b mit te d t ha t ass es se e h as no t c lai me d a n y ex e mpt ion u nde r Sec ti on 10( 38 ) o n the se t ra nsa ct io ns a nd th e in co me a ris i ng o n s al e of s har e s h as b ee n tre at ed as b us in es s ac ti vit y b y t he a ss ess ee . I t is f urt he r cas e of th e ass es se e t ha t af t er co ns id eri ng t he i nf or mat io n a vail ab le wi th th e As ses si ng Of f icer a nd c on du ct in g ne ce ssa r y in qu iri es in t he p ec ul iar f acts t ow ar ds al le g ed bo gu s tr an sa cti o ns, t he a ss ess men t was f ra me d un der Sec ti on 1 4 3( 3) of th e Ac t wh er ein t he e xp la nati on of f ered b y the as se ss ee we re a cce pt ed in th e c ont ext of th e c as e i n d isc ha rg e of qua si -j ud ic ial f un ct ion s. I.T.A. No.1808 & 1809/Del/2020 9 8.2 The rev is io ns al C o mmi s si on er h as i ss ued sh ow c au se n oti ce dat ed 1 1. 03 .2 02 0 a lle gi ng t ha t th e As ses si ng Of f icer h as not mad e pro pe r i nq uir y a nd ver if ica ti on of sal e and pu rc ha se of s ha res . It wa s ob ser ve d b y th e P r .CI T t ha t th e as se s see ap pea rs to b e an i nv es tor and not a t ra de r. T he A sse ss in g Of f ic er wa s ul ti ma te l y dir ec te d to ma ke as se ss me nt af res h af ter c on du ct i ng re le va nt inqu ir ie s. 9. On w ei gh in g th e f a cts in p er sp ect iv e, we n ot e that e du ca t ion al bac kg ro un d of the ass es se e gi ve s an i mp res si on t ha t th e ass es se e is wel l v ers ed wi th the f u nct io ni ng of the s to ck mar ket and h as rea so na bl e ex per ie nce i n t he f iel d. H enc e, t he a ct io n of asse ss ee t o tre at t he ga in s ar isi ng f r o m sa le o f impu gn ed pe nn y sto ck as bu sin es s inc o me app ea rs to be u n que st io na bl e. No ti cea bl y, th e ass es se e h as n ot av ail ed an y b e nef it u nde r Se cti on 1 0( 38 ) of t he A ct thu s, f ac ia ll y, no ‘ pre ju di ce’ ap pe ar s to h av e ca used to t he R ev en ue . The Pr .C IT ha s a t te mpt ed to rea li gn the na tu re of inc o me f ro m bu sin es s i nc o me t o cap it al ga in wi th o ut g iv in g a n y re as o nab le ba si s f or d oi ng s o in the r ev is io nal o rd er. T he w ho le ob jec ti ve of rev is io na l p ro ce ed i ng s a pp ea rs to b e to ta x t he i nco me ari si ng o n sal e of i mpu gn ed sha re s o n hi gh er r ate , i .e ., 60 % un d er Sec ti on 11 5B BE of t he A ct . 10. Par ad ox ic al l y, w hi l e o n on e h an d th e Pr. CI T se ek s i nq ui r y a nd ver if ica ti on in r es p ect of tr an sa ct io ns i n p en n y stoc k whe r eas , o n th e oth er ha nd, th e P r.C IT ha s gi ve n a con cl us iv e di re ct ion to the As ses si ng Of f ice r to tr eat t he co m ple te sa le tr an sact ion s to be bro ug ht to ta x u nd er S ec ti on 68 of t he Act an d i mp os i tio n of t ax the re on at h ig he r rat e un der S ec ti on 11 5B B E of th e Act . In ou r mi nd, su ch ap pr oac h of th e Pr .C IT ef f ect iv el y nu ll if ie s th e di re cti on of the As se ss in g O f f icer to make pro per i nq ui r y. Once a f indi ng of con cl us iv e n at ure is giv en , t he o utc o me of e nq ui r y lo ss es it s I.T.A. No.1808 & 1809/Del/2020 10 rel ev an ce. S uc h ac t ion of th e Pr. CI T c ann ot b e co unten an ced i n la w. 11. The a ss es se e h av in g of f er ed th e in co me ar is in g on p ur cha se and sa le of sh ar es as bu si nes s i nc o me an d d ul y ac cepte d b y t he As ses si ng Of f icer , the r ea li gn me nt of inco me pr op ose d i n a rev is io na l pr oc ee di ng i s n ot ba ck ed b y an y co ge nt ba si s a nd i s i n t he rea l m of su r mis es. The as se ss ee has p aid ta xe s at th e n or mal ra te on suc h i nc o me, a nd the ref o re, no p re ju dic e ca n b e at tri b ute d t o th e int er es t of t he R ev enu e me rel y b e cau s e t he hi gh er ra te of ta x c an be cha rg ed u nd er S ec tio n 1 15 BB E. T he jud g men t of Hon ’bl e De lh i Hi gh Co ur t i n K ri s hna D ev i & Or s. c ast s do ubt o n s uc h tre at me nt ari si ng f ro m s al e of sha re s. U nd er suc h c irc u ms tan ce s, s ta rtl in g spi ke , c an no t b e t he r ea so n, in it se lf , to in v oke ju ri sd i cti on un de r Sec ti on 26 3 of th e Act par ti cu lar l y, wh ere th e ga ins ar isi ng f r o m sal e of sha re s ar e not c ov ere d b y t ax c onc es si on u nd er S ect io n 10( 38 ) of t he Ac t. The ca se la ws ci te d o n b eha lf of th e ass es se e a s wel l a s Rev en ue has be en pe ru se d. No ne of th e d e cisio ns ar e app li ca bl e w he n n o p re ju di ce is f ou nd to h av e b ee n c aus ed t o t he Re ven ue . T he o pe rat io n of Se ct io n 26 3 is a no n s ta rter in t he abs en ce of an y pr eju di ce s ho w to h ave c au se d to r evenu e. T he dec is io n r ef err ed t o on be ha lf of th e R eve nu e i n cas e of P ooj a Gu pt a (su pr a ) is in th e c o nte xt of dif f ere nt f a ctu al ma tr ix , i. e. , t he a ss es se e the re in cl ai me d ex e mp tio n f r o m t ax l ia bil it y u n de r Sec ti o n 1 0( 38 ) of the A ct ca us in g pr e jud ic e to th e re ve n ue. 10. In t he li gh t of th e del in ea tio ns ma de , th e r ev isi on al or der of the P r. CI T is se t as ide a nd q ua she d. 11. In th e res ul t, t he ap pea l of th e as se ss ee is a ll ow ed. I.T.A. No.1808 & 1809/Del/2020 11 IT A No .1 80 9/ Del /2 02 0 ( As se ss me nt Y ear 2 01 5- 16 ) 12. The f a ct an d is s ue i nv ol ve d i n t he c ap ti on ed a pp eal is ide nt ic al. He nc e, the pr oce ss of rea so ni ng d is cu s sed in IT A No. 1 80 8/ Del /2 02 0 app li es m uta ti s m uta nd is i n t he pr ese nt ca se . Co ns eq uen tl y, f or t he s i mila ri t y of re a so ns, the order of the P r. CI T is se t asi de a nd q ua she d. 13. In th e res ul t, t he ap pea l in IT A N o.1 80 9/ Del /2 02 0 is al lo w ed. 14. In t he co mb in ed r esu lt , b ot h t he ap p eal s of t he as se sse e ar e all ow ed . Order pronounced in the open Court on 04/05/2022. Sd/- Sd/- [SAKTIJIT DEY] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 04/05/2022 Prabhat