Shri Tanmay B.Shah, Valsad V. The Income tax Officer,Ward-4, Valsad

ITA 1863/AHD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6891 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 01-04-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 31-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R K TOPIWALA
• Keywords: Opportunity of being heard; Additional evidence; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI D.K.TYAGI, HONBLE JUDICIAL MEMBER, AND SHRI D. C. AGRAWAL, HONBLE ACCOUNTANT MEMBER ITA NO.1863/AHD/2010 ASSESSMENT YEAR:2006-07 DATE OF HEARING:1.4.11 DRAFTED:4.4.11 SHRI TANMAY B SHAH, PROP. OF M/S. KAMDHENUE FOODS, MATRU CHHAYA, MULLAWADI, VALSAD PAN NO.ANZPS3162P V/S . INCOME TAX OFFICER, WARD-4, VALSAD (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI RAJESH UPADHYAY, AR RESPONDENT BY:- SHRI R.K. TOPIWALA, DR O R D E R PER D.K.TYAGI, JUDICIAL MEMBER:- THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF COM MISSIONER OF INCOME-TAX(APPEALS), VALSAD IN APPEAL NO. CIT(A)/VL S/439/08-09 DATED 21- 12-2009 FOR THE ASSESSMENT YEAR 2006-07. 2. THOUGH THE ASSESSEE HAS TAKEN FIVE GROUNDS OF AP PEAL BUT AT THE TIME OF HEARING GROUND NO.4 & 5 WERE NOT PRESSED, HENCE, THE SAME ARE DISMISSED AS NOT PRESSED. 3. GROUND NO.1 & 2 RELATE TO DISALLOWANCE OF EXPEND ITURE UNDER THE HEAD OF TELEPHONE & POSTAGE EXPENSES AND VEHICLE EXPENSE S. THE ASSESSING OFFICER DISALLOWED A SUM OF RS.18,454/- BEING 1/5 TH OF RS.92,269/- EXPENSES ITA NO. 1863/AHD/2010 A.Y. 2006-07 SH TANMAY B SHAH V. ITO WD-4 VLS PAGE 2 INCURRED ON TELEPHONE AND POSTAGE BY ASSESSEE. THIS DISALLOWANCE WAS REDUCED BY LD. CIT(A) TO 1/10 TH OF THE SAID EXPENSES. SIMILARLY, OUT OF VEHICLE EXPENSES OF RS.2,16,200/- A SUM OF RS.43,240/- WAS DISALLOWED ON ACCOUNT OF PERSONAL USE OF VEHICLE BY ASSESSEE. THIS DISALLOWA NCE WAS RESTRICTED BY LD. CIT(A) TO 10% OF THE EXPENSES. WE FIND NO INFIRMITY IN THE ORDER PASSED BY LD. CIT(A) AS HE HAS BEEN REASONABLE IN RESTRICTING THE DISALLOWANCE TO 10% OF THE TOTAL EXPENDITURE INCURRED BY ASSESSEE ON THESE HEADS. THEREFORE, GROUND NO.1 & 2 TAKEN BY ASSESSEE ARE DISMISSED. 4. GROUND NO.3 RAISED BY ASSESSEE IS AS UNDER:- 3. LR. A.O. HAS ERRED IN LAW AND ON FACTS IN NOR A CCEPTING LONG TERM CAPITAL GAIN ON SHARES OF RS.9,15,835/- DEALT IN TH ROUGH STOCK BROKER OF RECOGNIZED STOCK EXCHANGE, AFTER PAYING S.T.T. SERV ICE CHARGES ETC. AND TRANSACTIONS ARE DONE FROM DEMAT A/C. LONG TERM CAPITAL GAIN ON SALE OF SHARES BEING EXEMPT. LR. A.O HAS ERRED IN L AW AND ON FACTS TO TREAT IT AS TAXABLE INCOME LR. CIT(APLS) HAS ALSO E RRED TO CONFIRM A.OS ACTION. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSE SSING OFFICER FOUND THAT ASSESSEE HAD ADJUSTED THE SHORT TERM CAPITAL G AINS OF RS.11,18,302/- ON SHARE OF RS.11,18,302/- AND THAT OF RS.92,122/- ON SALE OF GOLD AGAINST LOSS FROM BUSINESS AND PROFESSION. HE ALSO FOUND THAT AS SESSEE HAS CLAIMED A SUM OF RS.9,15,835/- EXEMPT AS LONG TERM CAPITAL GA INS ON SHARES. THE ASSESSEE WAS REQUIRED TO FURNISH THE DETAILS DATE O F PURCHASE, COST OF ACQUISITION OF SHARES AND COPY OF DEMAT A/C. THE AS SESSEE COULD NOT SUBMIT THE DETAILS CALLED FOR EXCEPT THAT THE LEDGER ACCOU NT OF RESPECTIVE SHARES IN RESPECT OF SHORT TERM CAPITAL GAINS AND A STATEMENT SHOWING THE DATE ON WHICH THE SHARES WERE BROUGHT IN THE DEMAT ACCOUNT, NUMBE R AND COST OF ACQUISITION OF SHARES AND THAT OF SALE CONSIDERATION AND DATE O F SALE. THE ASSESSING OFFICER WAS OF THE VIEW THAT ASSESSEE HAS FAILED TO SUBSTANTIATE ITS CLAIM OF SHORT TERM CAPITAL GAINS OF RS.11,18,302/- AND THE LONG TERM CAPITAL GAINS OF RS.9,15,835/- FROM SHARES TRADED THROUGH RECOGNIZED STOCK EXCHANGE. HE THEREFORE, TREATED LONG TERM CAPITAL GAINS OF RS.9, 15,835/- AS SHORT TERM CAPITAL ITA NO. 1863/AHD/2010 A.Y. 2006-07 SH TANMAY B SHAH V. ITO WD-4 VLS PAGE 3 GAINS AND TAXED AT THE NORMAL RATE. BEFORE LD. CIT( A) NO DETAILS WERE FILED TO SHOW THAT RS.9,15,835/- WAS A LONG TERM CAPITAL GAI NS AND LD. CIT(A) UPHELD THE ACTION OF ASSESSING OFFICER. BEFORE US ASSESSEE HAS FILED HDFCI BANKS DEMAT A/C STATEMENT WHICH IS AVAILABLE IN THE PAPER BOOK FROM PAGES 12 TO 34. AS IT IS VITAL PIECE OF EVIDENCE TO DECIDE THE ISSUE AT HAND, IT WAS ADMITTED AS ADDITIONAL EVIDENCE AND IN THE INTEREST OF NATUR AL JUSTICE AND FAIR PLAY THE MATTER IS RESTORED BACK TO THE FILE OF ASSESSING OF FICER FOR FRESH ADJUDICATION IN THE LIGHT OF THIS ADDITIONAL EVIDENCE AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THIS GROUND OF ASSESSE ES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 08/04/2011 SD/- SD/- (D.C.AGRAWAL) (D.K. TYA GI) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 08/04/2011 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-VLS 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD