Kedarnath Khandelwal, Kolkata V. DCIT, C ircle- 35, Kolkata, Kolkata

ITA 2160/KOL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48201 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-06-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 03-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R PURAKAYASTHA
• Assessee Lawyers: S D VERMA
• Keywords: Business income; Earning of tax free income; Revised return
• Section: 143(3)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH-B: KO LKATA ( ) . . , , . . , ,) [BEFORE HONBLE SHRI B.R. MITTAL, J.M. & HONBLE SH RI C.D. RAO, A.M] ! ! ! ! /I.T.A. NO. 2160/KOL./2010 '# '# '# '# $% $% $% $% /ASSESSMENT YEAR : 2005-2006 KEDARNATH KHANDELWAL, KOLKATA -VS. - DEPUTY COMMISSIONER OF INCOME TAX, (PAN : AFJPK 8098 J) CIRCLE-35, KOLKAT A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.D. VERMA, A.R. RESPONDENT BY : SHRI B.R. PURAKAYASTHA, D.R. & & & & /O R D E R PER SHRI B. R. MITTAL, JUDICIAL MEMBER / . . , : THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2005-06 AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XX, KOLKATA DA TED 22.10.2010 ON FOLLOWING GROUNDS :- LD. COMMISSIONER OF INCOME TAX(APPEALS)-XX, KOLKAT A HAS ERRED IN LAW AND IN FACTS IN UPHOLDING ORDER PASSED BY THE A SSESSING OFFICER UNDER SECTION 143(3) WHEREIN EXEMPT INCOME OF RS.3,42,094 /- UNDER THE HEAD LONG TERM CAPITAL GAIN HAS BEEN ASSESSED UNDER TH E HEAD BUSINESS INCOME IGNORING THE REVISED RETURN FILED FOR ASSES SMENT YEAR 2004-05. 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. 3. WE OBSERVE THAT THE ASSESSEE CLAIMED LONG-TERM C APITAL GAIN OF RS.3,42,094/- ON SALE OF 50,000 SHARES OF BELLARY STEEL AND CLAIMED EXEMPTIO N UNDER SECTION 10(38) OF THE ACT AND WHEREAS ASSESSING OFFICER TREATED THE SAME AS SHARE TRADING PROFIT. ASSESSING OFFICER HAS STATED THAT IN THE PRECEDING ASSESSMENT YEAR, I.E. ASSESSM ENT YEAR 2004-05, THE ASSESSEE HAD SHOWN THE SAID SHARES AS TRADING STOCK BUT SUBSEQUENTLY FILED THE REVISED RETURN AND SHOWED THE SAID SHARES AS INVESTMENT. ASSESSING OFFICER STATED THAT THE AB OVE STEP OF THE ASSESSEE IS AN AFTER-THOUGHT ITA NO. 2160/KOL.2010 2 AND ACCORDINGLY DID NOT ACCEPT THE CLAIM OF THE ASS ESSEE AS LONG-TERM CAPITAL GAIN. LD. CIT(APPEALS) HAS ALSO CONFIRMED THE ACTION OF THE A SSESSING OFFICER. 4. AT THE TIME OF HEARING OF THE APPEAL, LD. AUTHOR IZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD SHOWN THE SAID SHAR ES AS STOCK TRADING WRONGLY AND SUBSEQUENTLY REVISED THE RETURN AND SHOWED THE SAID SHARES UNDER THE HEAD INVESTMENT. LD. AR REFERRED PAGES 28 TO 30 OF THE PAPER BOOK TO SUB STANTIATE HIS ABOVE SUBMISSION. HE FURTHER SUBMITTED THAT ASSESSEE ALSO PAID TAX WHICH AROSE O N ACCOUNT OF SHOWING THE SAID SHARES UNDER THE HEAD INVESTMENT IN THE PRECEDING ASSESSMENT Y EAR, I.E. ASSESSMENT YEAR 2004-05 AND THE DEPARTMENT ACCEPTED THE REVISED RETURN AS WELL AS T HE TAX PAID BY THE ASSESSEE CONSEQUENTLY. HE SUBMITTED THAT THE SAID SHARES HAD BEEN SOLD BY THE ASSESSEE IN THE ASSESSMENT YEAR UNDER CONSIDERATION AS AN INVESTMENT AND, THEREFORE, THE PROFIT AROSE TO THE ASSESSEE IN RESPECT OF THOSE SHARES AMOUNTING TO RS.3,42,094/- HAS RIGHTLY BEEN CLAIMED AS LONG-TERM CAPITAL GAIN. 5. AT THE TIME OF HEARING, LD. DEPARTMENTAL REPRESE NTATIVE DID NOT DISPUTE THE ABOVE CONTENTION OF THE ASSESSEE BUT RELIED ON THE ORDER OF THE AUTHORITIES BELOW. 6. IN VIEW OF THE ABOVE FACTS AND CONSIDERING THAT THE ASSESSEE HAD REVISED THE RETURN IN THE PRECEDING ASSESSMENT YEAR AND ALSO PAID TAX, WHICH BECAME PAYABLE ON ACCOUNT OF SHOWING THE SAID SHARES UNDER THE HEAD INVESTMENT ON 09.09.20 05 AND THE RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR 2005-06 WAS FILED ON 25.10 .2005, I.E. SUBSEQUENT TO THE FILING OF THE REVISED RETURN, WHICH IS APPARENT FROM THE ASSESSME NT ORDER. WE ARE OF THE CONSIDERED VIEW THAT IT IS NOT JUSTIFIED TO DISBELIEVE THE CONTENTI ON OF THE ASSESSEE AND CONSIDER THE SAID SHARES AS TRADING STOCK INSTEAD OF INVESTMENT AS CLAIMED BY T HE ASSESSEE WITHOUT BRINGING ANY MATERIAL ON RECORD CONTRARY TO THE SUBMISSIONS OF THE ASSESSEE. THEREFORE, WE SET ASIDE THE ORDERS OF REVENUE AUTHORITIES AND ALLOW THE GROUND OF APPEAL TAKEN BY THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.06. 2011. SD/- SD/- [C. D. RAO ( . . )] [ B.R . MITTAL / . . ] ACCOUNTANT MEMBER/ JUDICIAL MEMBER/ ] DATED : 10/ 06/ 2011 ITA NO. 2160/KOL.2010 3 COPY OF THE ORDER FORWARDED TO: 1. SHRI KEDARNATH KHANDELWAL, C/O. S.D. VERMA, NO. 7, RABINDRA SARANI, 2 ND FLOOR, ROOM NO. 211, KOLKATA-1.. 2. DCIT, CIRCLE-35, KOLKATA, 18, RABINDRA SARANI, KOL KATA-1. 3 COMMISSIONER OF INCOME-TAX (APPEALS)- KOLK ATA 4 . CIT- , KOLKATA 5 . DR, KOLKATA BENCHES, KOLKATA (TRUE COPY) BY ORDER ASSISTANT REGISTRAR I.T.A.T., KOLKATA. LAHA, SR. P.S.