Aarti Davey, CHENNAI V. ITO Non Corporate Range 11(5), CHENNAI

ITA 2300/CHNY/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8690 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 20-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AR V SREENIVASANJCITD R
• Assessee Lawyers: D ANAND
• Keywords: Wrong claim; Benefit of exemption

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI , , , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER & S HRI INTURI RAMA RAO , ACCOUNTANT MEMBER ./ I.T.A.NOS.2299/CHNY/2017 / ASSESSMENT YEAR : 2014-15 SHRI ASHWIN KUMAR DAVEY , 43,SEMBUDOSS STREET, PARRYS CORNER,CHENNI 600 001. VS. INCOME TAX OFFICER, NON CORPORATE RANGE-11(5), CHENNAI. [PAN AALPA 3699 L ] ( / APPELLANT) ( /RESPONDENT) ./ I.T.A.NOS.2300/CHNY/2017 / ASSESSMENT YEAR : 2014-15 SMT. AARTI DAVEY , 43,SEMBUDOSS STREET, PARRYS CORNER,CHENNI 600 001. VS. INCOME TAX OFFICER, NON CORPORATE RANGE-11(5), CHENNAI. [PAN AJBPD 1135 H ] ( / APPELLANT) ( /RESPONDENT) ./ I.T.A.NOS.2301/CHNY/2017 / ASSESSMENT YEAR : 2014-15 SHRI DHARMESH DAVEY (HUF) , 43,SEMBUDOSS STREET, PARRYS CORNER,CHENNI 600 001. VS. INCOME TAX OFFICER, NON CORPORATE RANGE-11(3), CHENNAI. ITA NOS.2299 TO 2301/CHNY/2017 :- 2 -: [PAN AAGHD 1086 D ] ( / APPELLANT) ( /RESPONDENT) !' # $ / APPELLANT BY : MR.D.ANAND,ADVOCATE %&!' # $ /RESPONDENT BY : MR.AR.V.SREENIVASAN,JCIT,D.R ' ( # ) / DATE OF HEARING : 18 - 12 - 201 8 *+ # ) / DATE OF PRONOUNCEMENT : 18 - 12 - 201 8 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER ITA NO.2299 /CHNY/2017 IS THE APPEAL FILED BY THE ASSESSEE, SHRI ASHWIN KUMAR DAVEY AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-13, CHENNAI, I N ITA NO.95/CIT(A)-13/2014-15 DATED 14.07.2017 FOR ASSESS MENT YEARS 2014-15, ITA NO.2300 /CHNY/2017 IS THE APPEAL FILE D BY THE ASSESSEE, SMT. AATI DAVEY AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-13, CHENNAI, IN ITA NO.89/C IT(A)- 13/2014-15 DATED 14.07.2017 FOR ASSESSMENT YEARS 20 14-15, AND ITA NO.2301 /CHNY/2017 IS THE APPEAL FILED BY THE A SSESSEE, SHRI DHARMESH DAVEY(HUF) AGAINST THE ORDER OF THE COMMIS SIONER OF INCOME TAX (APPEALS)-13, CHENNAI, IN ITA NO.90/CIT( A)-13/2014- 15 DATED 14.07.2017 FOR ASSESSMENT YEARS 2014-15. SINCE THE ITA NOS.2299 TO 2301/CHNY/2017 :- 3 -: ISSUES RAISED IN ALL THESE APPLES ARE INTERLINKED, ALL THE APPEALS FILED BY DIFFERENT ASSESSEES ARE DISPOSED OF BY THIS COMMON ORDER. 2. SHRI D.ANAND REPRESENTED ON BEHALF OF THE ASSES SEE AND SHRI AR.V.SREENIVASAN REPRESENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY LD.A.R THAT THE ASSESSEES H AD PURCHASED SHARES OF M/S.NCL RESEARCH LIMITED AND M/S.RISA INT ERNATIONAL DURING APRIL AND JUNE, 2012. THE ASSESSEES SHARE PURCHASE WAS MADE THROUGH ONE MR.VIJAY VISHAL SHAH, MEMBER BSE AND P URCHASE OF SHARES WERE DONE THROUGH ONLINE MEDIUM BY PAYMENT O F SECURITY TRANSACTION TAX (STT). THESE SHARES WERE SOLD BY TH E ASSESSEES BETWEEN OCTOBER,2013 AND JANUARY,2014 THROUGH M/S.G LOBAL CAPITAL MARKET ,MEMBER BSE AND STT WAS PAID ON THIS TRANSAC TION ALSO. THE ASSESSEES HAD MADE ABOUT ` 10 LAKHS TO ` 14 LAKHS PROFITS IN THE TRANSACTION AND EACH HAD CLAIMED LONG TERM CAPITAL GAINS. THE LD. ASSESSING OFFICER ON THE GROUND THAT HE HAD RECEIVE D CERTAIN REPORT FROM THE DIRECTORATE OF INVESTIGATION, KOLKATA WHER EIN ORGANIZED RACKET OF GENERATING BOGUS ENTRIES OF LONG TERM CAPITAL GA INS EXEMPT FROM TAX HAD BEEN FOUND, TREATED THE TRANSACTION DONE BY THE ASSESSEE AS BOGUS AND NON-GENUINE AND CONSEQUENTLY DISALLOWED T HE CLAIM OF EXEMPTION U/S.10(38) OF THE ACT AND TREATED THE SAM E AS UNDISCLOSED ITA NOS.2299 TO 2301/CHNY/2017 :- 4 -: INCOME U/S.68 OF THE ACT. IT WAS A SUBMISSION THAT THE TRANSACTIONS HAD BEEN DONE BY THE ASSESSEE BETWEEN 2012 AND 2014 AND THE ASSESSEES TRANSACTIONS WERE DONE THROUGH ONLINE TR ANSACTIONS THROUGH THE BSE ON WHICH STT HAD ALREADY BEEN PAID NEITHER THE ASSESSEES NAME NOR THE ASSESSEES BROKER NAME APPEARED IN ANY OF THE INVESTIGATION REPORTS IN RESPECT OF THE RACKET FOR GENERATING BOGUS ENTRIES. IT WAS A SUBMISSION THAT M/S.NCL RESEARCH LIMITED AND M/S.RISA INTERNATIONAL, BOTH THE COMPANIES HAD COME UNDER SCRUTINY. ADMITTEDLY, IT WAS A SUBMISSION THAT THE ASSESSEES HEREIN HAD NO CONNECTION EITHER WITH THE DIRECTORS OR MANAGING DI RECTORS, OR ANYBODY IN THE TWO COMPANIES. IT WAS A SUBMISSION THAT SUBS EQUENTLY THE TWO COMPANIES HAVE BEEN REMOVED FROM THE SO CALLED INVE STIGATION LIST, AND THEIR SHARES ARE EVEN NOW TRADED IN THE STOCK E XCHANGE AS NO ADVERSE INFERENCE HAS BEEN DRAWN IN RESPECT OF THE TRANSACTIONS. ONLY ON PURE SUSPICION, THE ASSESSEES TRANSACTION HAD B EEN TREATED AS BOGUS TRANSACTION. IT WAS A SUBMISSION THAT THIS IS NOT A CASE OF PENNY STOCK. IT WAS A FURTHER SUBMISSION THAT THE CLAIM O F ASSESSEE MAY BE ALLOWED. 4. IN REPLY, THE LD.D.R SUBMITTED THAT THE ASSESSE E HAD MADE SUBSTANTIAL PROFITS ON PURCHASE AND SALE OF SHARES IN A VERY SHORT PERIOD AND IT IS NOTHING, BUT PENNY STOCK. THE LD.D .R SUBMITTED THAT THE ISSUE IN THIS APPEAL WAS NOW SQUARELY COVERED B Y THE DECISION OF ITA NOS.2299 TO 2301/CHNY/2017 :- 5 -: CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SHRI HEERACHAND KANUNGA FOR ASSESSMENT YEARS 2010-11 & 2011-12 IN I TA NOS.2786 & 2787/MDS/2017 VIDE ORDER DATED 03.05.2018. IT WAS A PRAYER THAT ON IDENTICAL DIRECTIONS, THE ISSUE IN THESE APPEALS CA N ALSO BE RESTORED TO THE FILE OF LD. ASSESSING OFFICER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THIS IS NOT A C ASE WHERE THE LD. ASSESSING OFFICER HAS BEEN ABLE POINT OUT WHERE THE ASSESSEE HAS MADE A BOGUS CLAIM OF LONG TERM CAPITAL GAINS EXEM PT U/S.10(38) OF THE ACT. FURTHER, PERUSAL OF THE ASSESSMENT ORDER C LEARLY SHOWS THAT FROM PAGE-1, PARA-3 TO PARA 5.3, THE LD. ASSESSING OFFICER HAS ONLY MADE ALLEGATION IN RESPECT OF THESE TWO COMPANIES A ND THE MODUS OPERANDI OF THE BOGUS CLAIM U/S.10(38) OF THE ACT. THE EVIDENCES CLEARLY SHOW THAT THE TRANSACTIONS OF PURCHASE AND SALE OF THE SHARES BY THE ASSESSEES HEREIN ARE THROUGH ONLINE TRANSACT ION BY PAYING STT. THIS IS NOT A CASE FOR OFF-LINE PURCHASE, NOR IS TH E CASE OF DIRECT PURCHASE. NEITHER IS THE ASSESSEES NAME COMING OUT IN THE INVESTIGATION REPORT, WHICH HAS BEEN RECEIVED BY TH E LD. ASSESSING OFFICER FROM DIRECTORATE OF INVESTIGATION, KOLKATA. THIS BEING SO, THE CLAIM OF ASSESSEE CANNOT BE DISALLOWED MERELY ON PR ESUMPTIONS AND THE LD. ASSESSING OFFICER IS DIRECTED TO GRANT THE ASSESSEE BENEFIT OF EXEMPTION U/S.10(38) OF THE ACT AS CLAIMED IN RESPE CT OF LONG TERM ITA NOS.2299 TO 2301/CHNY/2017 :- 6 -: CAPITAL GAINS GENERATED BY PURCHASE AND SALE OF SHA RES OF M/S.NCL RESEARCH LIMITED AND M/S.RISA INTERNATIONAL AS CLAI MED BY THE ASSESSEE. 6. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE IN THE CASE OF SHRI ASHWIN KUMAR DAVEY, SMT. AARTI DAVEY, AND SHRI DHARMESH DAVEY (HUF) ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 18 TH DECEMBER, 2018, AT CHENNAI. SD/ - SD/ - ( , ) (INTURI RAMA RAO) ! '# /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) $ '# / JUDICIAL MEMBER , ( / CHENNAI - / DATED: 18 TH DECEMBER, 2018. K S SUNDARAM . # %)/0 1 0 ) / COPY TO: 1 . !' / APPELLANT 4. ' 2) / CIT 2. %&!' / RESPONDENT 5. 034 %)5 / DR 3. ' 2) () / CIT(A) 6. 48 9( / GF