Anil Kumar Shiyal, CHENNAI V. ITO Non Corporate Ward 11(1), CHENNAI

ITA 2066/CHNY/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9727 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 02-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B. SAGADEVAN
• Keywords: Capital Gains

Judgement Text

` , / SMC , IN THE INCOME TAX APPELLATE TRIBUNAL A / SMC BENCH: CHENNAI ... , , ! | BEFORE SHRI N.R.S. GANESAN , JUDICIAL MEMBER ./ ITA NO.2066/CHNY/2018 $ $ /ASSESSMENT YEAR: 2015-16 MR.ANIK KUMAR SHIYAL, 108, GOVINDAPPA NAICKEN STREET, PARRYS, CHENNAI-600 003. [PAN: CQUPS 0753 G] VS. THE INCOME TAX OFFICER, NON-CORPORATE WARD-11(1), CHENNAI-600 006. ( ( /APPELLANT) ( )*( /RESPONDENT) ( + / APPELLANT BY : MR.M.KARUNAKARAN, ADV. )*( + /RESPONDENT BY : MR.B. SAGADEVAN, JCIT + /DATE OF HEARING : 22.11.2018 + / 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 TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-13, CHENNAI, A ND PERTAINS TO THE AY 2015-16. 2. SHRI M.KARUNAKARAN, LD. REPRESENTATIVE OF THE AS SESSEE SUBMITTED THAT THE ASSESSEE PURCHASED AND SOLD THE SHARES OF M/S.KAILASH AUTO FINANCE LTD., AND THE CAPITAL GAINS WERE CLAIMED AS EXEMPTION U/S.10(38) OF THE ACT. HOWEVER, THE AO BY PLACING RELIANCE ON INVESTIGATION REPORT ITA NO.2066/CHNY/2018 :- 2 -: SAID TO BE RECEIVED FROM KOLKATA INVESTIGATION WING OF THE DEPARTMENT FOUND THAT M/S.KAILASH AUTO FINANCE LTD., IS A PENN Y STOCK COMPANY. HENCE, THE CAPITAL GAINS CANNOT BE ALLOWED AS EXEMP T U/S.10(38) OF THE ACT. THE LD. REPRESENTATIVE FURTHER SUBMITTED THAT THE INVESTIGATION REPORT OF THE KOLKATA INVESTIGATION WING, WAS NOT F URNISHED TO THE ASSESSEE. MOREOVER, THE ASSESSEE IS AN INNOCENT CI TIZEN INVESTED IN THE SHARES OF M/S.KAILASH AUTO FINANCE LTD. UNLESS AND UNTIL, NECESSARY COPIES OF THE DOCUMENTS ARE FURNISHED TO THE ASSESS EE, THERE CANNOT BE NO ADDITION. 3. I HEARD MR.B.SAGADEVAN, THE LD. DEPARTMENTAL REP RESENTATIVE ALSO. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT IT IS NOT IN DISPUTE THAT THE CLAIM OF THE ASSESSEE WAS DISALLOWED ON TH E BASIS OF THE INVESTIGATION REPORT SAID TO BE RECEIVED BY THE AO FROM INVESTIGATION WING DEPARTMENT AT KOLKATA. ADMITTEDLY, THE REPORT OF THE INVESTIGATION WING AT KOLKATA WAS NOT FURNISHED TO THE ASSESSEE. MOREOVER, IT IS NOT KNOWN, HOW THE DEPARTMENT IS CLAIMING M/S.KAILASH A UTO FINANCE LTD., IS A PENNY STOCK COMPANY. WE HAVE TO ASCERTAIN WHO AUTH ORIZED THE REGISTRATION OF SUCH COMPANY, WHICH IS A PUBLIC LIM ITED COMPANY, AND WHO AUTHORIZED FOR LISTING OF SUCH COMPANY IN THE STOCK EXCHANGE. BLAMING THE INNOCENT INVESTOR, AS IF, HE INVESTED IN THE PENNY STOCK COMPANY MAY NOT SERVE ANY PURPOSE. THERE SHOULD BE THOROUGH INVEST IGATION AND BRING THE FACTS ON RECORD, HOW THESE COMPANIES WERE REGISTERE D BY THE REGISTRAR OF COMPANIES AND ALLOWED TO ISSUE PUBLIC SHARES SO AS TO INVITE THE GENERAL ITA NO.2066/CHNY/2018 :- 3 -: PUBLIC FOR INVESTMENT. UNLESS AND UNTIL, THESE FAC TS ARE BROUGHT ON RECORD, THE CLAIM OF THE ASSESSEE CANNOT BE DOUBTED. MOREO VER, THE ROLE OF THE ASSESSEE IN PROMOTING THE SAID COMPANY, INFLATING T HE PRICE OF THE SHARES ALSO NEEDS TO BE EXAMINED. ACCORDINGLY, THE ORDE RS OF AUTHORITIES BELOW ARE SET-ASIDE AND THE ENTIRE MATTER IS REMITTED BAC K TO THE FILE OF THE AO. THE AO SHALL FURNISH ALL COPIES OF THE MATERIALS IN CLUDING INVESTIGATION REPORTS SAID TO BE RECEIVED FROM INVESTIGATION WING , KOLKATA, TO THE ASSESSEE AND THEREAFTER BRING ON RECORD, HOW THESE COMPANIES WERE ALLOWED TO REGISTER BY THE REGISTRAR OF COMPANIES A ND HOW THEY ARE ALLOWED TO ISSUE PUBLIC SHARES INVITING THE GENERAL PUBLIC TO INVEST THEIR FUNDS AND ROLE OF THE ASSESSEE IN SUCH MATTERS AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 3 RD DAY OF DECEMBER, 2018, IN CHENNAI. SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED: DECEMBER 03, 2018. TLN ITA NO.2066/CHNY/2018 :- 4 -: + )34 54 /COPY TO: 1. ( /APPELLANT 4. 6 /CIT 2. )*( /RESPONDENT 5. 4 ) /DR 3. 6 ( ) /CIT(A) 6. $ /GF