Chanchal Kumari Jain , Bhilwara V. ITO, Ward-3, Bhilwara

ITA 213/JODH/2019

• Counselvise Citation: [2020] 109 COUNSELVISE.COM (IT) 9701 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 25-06-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A S YADAV LD
• Assessee Lawyers: AMIT KOTHARI CA LD
• Keywords: Cost of acquisition; Reassessment proceedings; Capital Gains
• Section: 143(3); 68; 148

Judgement Text

1 ITA NO.213/JODH/2019 SMT. CHANCHAL KUMARI JAIN ASSESSMENT YEAR: 2014-15 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR , , BEFORE HONBLE SHRI SANDEEP GOSAIN, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.213/JODH/2019 ( / ASSESSMENT YEAR: 2014-15) SMT. CHANCHAL KUMARI JAIN 143-A/A, SHASTRI NAGAR BHILWARA, RAJASTHAN-311 001. / VS. INCOME TAX OFFICER WARD-3, BHILWARA RAJASTHAN-311 001. ./ ./PAN/GIR NO. ADNPJ-8347-F ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : SHRI AMIT KOTHARI (CA)- LD. AR REVENUE BY : SHRI A.S. YADAV - LD. SR. DR / DATE OF HEARING : 03/11/2020 / DATE OF PRONOUNCEMENT : 21/12/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2014-15 CONTEST THE ORDER OF L D. COMMISSIONER OF INCOME-TAX(APPEALS), AJMER, [IN SHORT REFERRED T O AS CIT(A)], APPEAL NO.266/2017-18 DATED 15/04/2019. THE ONLY GROUND PRESSED IN THE APPEAL IS GROUND NO.2 WHICH READ AS UNDER: - 2 ITA NO.213/JODH/2019 SMT. CHANCHAL KUMARI JAIN ASSESSMENT YEAR: 2014-15 2. THE ID. CIT(A) HAS ERRED IN NOT ALLOWING DEDUC TION OF RS.1,50,019/- OUT OF EXPENSES INCURRED TOWARDS SHORT TERM CAPITAL GAI NS SHOWN BY THE APPELLANT. THE DETERMINATION OF SHORT TERM CAPITAL GAINS AT RS.3,40,759/- AS AGAINST RS. 1,90,740/- DECLARED BY THE APPELLANT IS BAD IN LAW AND BAD ON FACTS. AS EVIDENT, THE ASSESSEE IS AGGRIEVED BY RE-COMPUTA TION OF SHORT- TERMS CAPITAL GAINS. 2. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD INCLUDING WRITTEN SUBMI SSIONS AND DOCUMENTS PLACED IN THE PAPER BOOK. THE JUDICIAL PR ECEDENTS AS RELIED UPON DURING THE COURSE OF HEARING HAVE DULY BEEN DELIBERATED UPON. OUR ADJUDICATION TO THE SUBJECT MATTER WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 3.1 THE MATERIAL FACTS ARE THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL WAS ASSESSED U/S 143(3) R.W.S. 147 ON 30 /10/2017. THE REASSESSMENT PROCEEDINGS WERE TRIGGERED PURSUANT TO RECEIPT OF CERTAIN INFORMATION THAT THE ASSESSEE PROCURED BOGU S SHORT-TERM CAPITAL GAIN (STCG). ACCORDINGLY, NOTICE U/S 148 WA S ISSUED ON 26/09/2016. 3.2 THE ASSESSEE REFLECTED STCG OF RS.1.90 LACS WHI CH AROSE FROM SALE OF 25000 SHARES OF AN ENTITY NAMELY M/S A NUKARAN COMMERCIAL ENTERPRISES LTD. (ACEL). THE SAME WERE S OLD FOR RS.5.40 LACS DURING THE YEAR AS AGAINST PURCHASE PR ICE OF RS 3.50 LACS. THE SALE AS WELL AS PURCHASES TOOK PLACE ON S AME DATE I.E. 01/01/2014. THE SHARES WERE STATED TO BE PURCHASED FROM AN INDIVIDUAL NAMELY SHRI ARVIND MOONKA . HOWEVER, THE SALE TOOK PLACE BY WAY OF SALE NOTE ON PLAIN PAPER AND THE SHARES W ERE NOT HELD IN 3 ITA NO.213/JODH/2019 SMT. CHANCHAL KUMARI JAIN ASSESSMENT YEAR: 2014-15 ASSESSEES D-MAT ACCOUNT WHICH LED LD. AO TO DOUBT THE GENUINENESS OF THE TRANSACTION. FURTHER, M/S ACEL W AS LISTED AS BOGUS SUSPICIOUS ENTITY BY INVESTIGATION ENTITY, KO LKATA. THE SHARES OF THIS ENTITY WERE ALLEGEDLY MANIPULATED IN ORDER TO PROVIDE ENTRIES OF BOGUS STCG TO VARIOUS BENEFICIARIES. THEREFORE, TREATING THE ENTITY AS PENNY STOCK, THE ENTIRE SALE CONSIDERATIO N OF RS.5.40 LACS WAS ADDED BACK TO THE INCOME OF THE ASSESSEE U/S 68 WHICH WOULD BE TAXABLE @30% IN TERMS OF SEC.115BBE(1) OF THE AC T. THE LD.AO ALSO ESTIMATED COMMISSION OF 1.5% ON SALE CONSIDERA TION AND MADE ANOTHER ADDITION OF RS.8,111/- TO BE TAXED AT SAME RATE I.E. 30%. 3.3 BEFORE LD. CIT(A), IT WAS POINTED OUT BY THE AS SESSEE THAT PURCHASE CONSIDERATION OF RS.2 LACS WAS PAID THROUG H BANKING CHANNELS WHEREAS THE BALANCE RS.1.50 LACS WAS PAID IN CASH. THE SHARES WERE DULY TRANSACTED THROUGH D-MAT ACCOUNT H ELD WITH STOCK BROKER M/S MANGAL KESHAV SECURITIES LTD. THE SHARES WERE SOLD THROUGH MECHANISM OF STOCK EXCHANGE AND M/S ACEL WA S LISTED AS WELL AS REGULARLY TRADED ENTITY. THE APPLICABLE STA MP DUTY AS WELL AS SECURITIES TRANSACTIONS TAX (STT) WAS PAID ON SALE AND NET CONSIDERATION WAS RECEIVED IN ASSESSEES BANK ACCOU NT. IN SUPPORT, DOCUMENTARY EVIDENCES LIKE BROKERS SALE NOTE, BANK STATEMENTS, D- MAT STATEMENT ETC. WAS ALSO FILED. IT WAS PLEADED T HAT SINCE THE ASSESSEE FILED EACH AND EVERY DOCUMENT REQUIRED TO PROVE THE GENUINENESS OF THE TRANSACTIONS, THE CLAIM WAS TO B E ACCEPTED. THE LD. CIT(A), WHILE CONCURRING WITH ASSESSEES SU BMISSIONS, DENIED THE BENEFIT THE PURCHASE COST OF RS.1.50 LAC S STATED TO BE 4 ITA NO.213/JODH/2019 SMT. CHANCHAL KUMARI JAIN ASSESSMENT YEAR: 2014-15 PAID BY THE ASSESSEE IN CASH TOWARDS PURCHASES PRIC E OF THE SHARES. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEA L BEFORE US. 4. UPON DUE CONSIDERATION OF FACTUAL MATRIX, IT IS EVIDENT THAT SUBSTANTIAL PART OF THE SALE AS WELL AS PURCHASE TR ANSACTION HAS ALREADY BEEN ACCEPTED BY LD.CIT(A). THE ASSESSEE HA S PLACED ON RECORD CONFIRMATION OF ACCOUNTS FROM SHRI ARVIND MO ONKA. UPON PERUSAL OF THE SAME, IT IS QUITE EVIDENT THAT THE S HARES HAVE BEEN PURCHASED AT TOTAL COST OF RS.3.50 LACS. THE PURCHA SE COST OF RS.2 LACS HAS BEEN PAID THROUGH BANKING CHANNEL ON 23/12 /2013 WHEREAS BALANCE CONSIDERATION OF RS.1.50 LACS HAS B EEN PAID IN CASH ON 17/04/2014. THIS BEING THE CASE, THERE IS N O REASON TO DENY THE BENEFIT OF PURCHASE COST OF RS.1.50 LACS T O THE ASSESSEE. THEREFORE, WE DIRECT LD. AO TO ALLOW DEDUCTION OF P URCHASE COST OF RS.1.50 LACS. 5. THE APPEAL STANDS PARTLY ALLOWED. ORDER PRONOUNCED U/R 34(4) OF INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963. SD/- SD/- (SANDEEP GOSAIN) (MAN OJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 21/12/2020 SR.PS:-JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #$' / THE RESPONDENT 3. % ( ) / THE CIT(A) 4. % / CIT CONCERNED 5. &'#( ) , ) , ) / DR, ITAT, JODHPUR 5 ITA NO.213/JODH/2019 SMT. CHANCHAL KUMARI JAIN ASSESSMENT YEAR: 2014-15 6. '+,-! / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, JODHPUR.