Shri Umed Singh , Bangalore V. The Assistant Commissioner of Income Tax Circle-6(2)(1), Bangalore

ITA 2326/BANG/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8659 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 06-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S T SESHADRI
• Assessee Lawyers: S V RAVISHANKAR
• Keywords: Salary income; Source of fund; Benefit of exemption
• Section: 143(3); 142(1); 234B; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI JASON P BOAZ, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO . 2 326 /BANG/201 8 ASSESSMENT YEAR : 20 1 4 - 1 5 SHRI UMED SINGH, NO. 1103, ANDRAHALLI MAIN ROAD, VISHWANEEDHAM POST, BANGALORE 560 091. PAN: AADPU9140Q VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 6 (2) (1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI S.V. RAVISHANKAR, ADVOCATE RESPONDENT BY : SHRI S.T. SESHADRI, JCIT (DR) DATE OF HEARING : 17.12.2018 DATE OF PRONOUNCEMENT : 21. 1 2 .2018 O R D E R PER SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF CIT(A)-6, BENGALURU IN ITA NO.-E-FILE/C-6(2)(1)/CIT(A)-6/2017 -18 PASSED U/SEC 143(3) AND SEC. 250 OF IT ACT DATED 23.03.201 8. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN SO FAR AS IT IS AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUITY AND WEIGHT OF EVIDENCE, NATURAL JUST ICE, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE APPELLANT DENIES HIMSELF LIABLE TO BE ASSESS ED TO TOTAL ITA NO. 2326/BANG/2018 PAGE 2 OF 6 INCOME OF RS. 54,74,630/- AS AGAINST THE RETURNED I NCOME OF RS. 38,03,380/- ON THE FACTS AND CIRCUMSTANCES OF T HE CASE. 3. THE AUTHORITIES BELOW ERRED IN LAW IN HOLDING TH AT SECTION 68 OF THE ACT IS APPLICABLE TO THE IMPUGNED CASE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT JUSTIFIED IN LAW IN CONFIRMING THE ADDITION U/S 68 OF THE ACT BEING SALE CONSIDERATION RECEIVED ON SALE OF EQ UITY SHARES ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN LAW IN DENYING THE BENEFIT OF EXEMPTION U/S 10(38) OF THE ACT ON T HE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE SALE PROCEEDS PERTAIN TO SALE OF LONG TERM EQUITY SHARES HENCE EXEMPT U/S 10(38) OF THE ACT ON THE FACTS AND CIRCU MSTANCES OF THE CASE. 7. THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN LAW IN DENYING THE EXEMPTION GRANTED BY THE STATUTE ON MERE SUSPIC ION ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THE AUTHORITIES BELOW ERRED IN HOLDING THAT THE TRANSACTION OF SALE OF EQUITY SHARES IS A BOGUS TRANSACTION ONL Y ON SURMISES AND CONJECTURES WITHOUT ANY EVIDENCE ON TH E FACTS AND CIRCUMSTANCES OF THE CASE. 9. THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE APPELLANT HAS SOLD THE SHARES THROUGH RECOGNIZED ST OCK EXCHANGE AND THE TRANSACTION WAS SUPPORTED BY CONTR ACT NOTES, BANK STATEMENT, DEMAT STATEMENTS AND THEREFO RE THE EXEMPTION OUGHT TO HAVE BEEN GRANTED ON THE FACTS A ND CIRCUMSTANCES OF THE CASE. 10. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) WAS NOT JUSTIFIED IN LAW IN CONFIRMING THE ACTION OF TH E LEARNED ASSESSING OFFICER OF MECHANICALLY RELYING ON SOME INVESTIGATION REPORTS OF THE DEPARTMENT WITHOUT APP LYING MIND IF THEY APPLY TO THE IMPUGNED CASE. ACCORDINGL Y, THE ORDER PASSED IS BAD IN LAW AND NOT SUSTAINABLE ON T HE FACTS ITA NO. 2326/BANG/2018 PAGE 3 OF 6 AND CIRCUMSTANCES OF THE CASE. 11. THE AUTHORITIES BELOW FAILED TO CONSIDER THE UNIMPEACHABLE MATERIAL ON RECORD SUBSTANTIATING THE CLAIMS MADE BY THE APPELLANT AND CONSEQUENTLY PASSED PERVE RSE ORDER ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 12. THE APPELLANT DENIES THE LIABILITY TO PAY INTER EST UNDER SECTION 234A 234B AND 234C OF THE ACT IN VIEW OF TH E FACT THAT THERE IS NO LIABILITY TO ADDITIONAL TAX AS DET ERMINED BY THE ASSESSING OFFICER. WITHOUT PREJUDICE, THE RATE, PER IOD AND ON WHAT QUANTUM THE INTEREST HAS BEEN LEVIED ARE NOT I N ACCORDANCE WITH THE LAW AND ARE NOT DISCERNABLE FRO M THE ORDER AND HENCE DESERVES TO BE CANCELLED ON THE FAC TS AND CIRCUMSTANCES OF THE CASE. 13. THE APPELLANT CRAVES LEAVE OF THIS HON'BLE TRIB UNAL, TO ADD, ALTER, DELETE, AMEND OR SUBSTITUTE ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL AS MAY BE NECESSARY AT THE TIME O F HEARING. 14. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING OF APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED FOR THE ADVANCEMENT OF SUBSTANTIAL CAUSE OF JUSTICE AND EQUITY. 3. BRIEF OF THE FACTS ARE THAT THE ASSESSEE IS AN I NDIVIDUAL AND FILED THE INCOME TAX RETURN FOR ASSESSMENT YEAR 2014-15 O N 29.11.2014 DISCLOSING TOTAL INCOME OF RS. 38,03,380 /- WITH SOURCES OF INCOME BEING INCOME FROM SALARY, HOUSE PROPERTY, BUSINESS, CAPITAL GAINS AND OTHER SOURCES. SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE U/S. 14 3(2) OF IT ACT WAS ISSUED AND FURTHER NOTICE U/S. 142(1) R.W.S. 12 9 OF THE IT ACT ALONG WITH THE QUESTIONNAIRE WAS ALSO ISSUED. IN R ESPONSE TO THE NOTICES, THE LD. AR OF ASSESSEE APPEARED AND FILED THE DETAILS AS CALLED FOR BY THE LD. AO AND THE CASE WAS DISCUSSED . ITA NO. 2326/BANG/2018 PAGE 4 OF 6 4. THE AO IN THE COURSE OF ASSESSMENT PROCEEDINGS F OUND THE ASSESSEE HAS SOLD 5,500 SHARES OF TUNI TEXTILE MILL S (P) LTD. FOR A SALE CONSIDERATION OF RS. 16,71,256/- AND THE LD. A R OF ASSESSEE WAS REQUIRED TO SUBMIT INFORMATION OF SALE CONTRACT , PURCHASE CONTRACT AND DEMAT A/C DETAILS IN RESPECT OF TRANSA CTION OF SALE OF SHARES. BUT THE ASSESSEE COULD NOT FURNISH ANY DOC UMENTARY EVIDENCE TO SUPPORT THE SALE TRANSACTIONS AND FURTH ER AO FOUND THAT THE ASSESSEE HAS CLAIMED EXEMPTION U/S. 10(38) WHICH CANNOT BE ALLOWED WITHOUT SUPPORTING DOCUMENTS. THE AO CO NSIDERING THE FACTS THAT THE ASSESSEE COULD NOT SUBSTANTIATE THE TRANSACTIONS WITH ANY SUPPORTING DOCUMENTS IN RESPECT OF SALE OF THE SHARES, HENCE MADE AN ADDITION OF RS. 16,71,256/- U/S. 68 O F IT ACT AND ASSESSED THE TOTAL INCOME OF RS. 54,74,630/- AND PA SSED THE ASSESSMENT ORDER U/SEC 143(3) OF IT ACT DATED 05.12 .2016. 5. AGGRIEVED BY THE ASSESSMENT ORDER THE ASSESSEE H AS FILED AN APPEAL BEFORE CIT(A). IN THE APPELLATE PROCEEDING CIT(A) FOUND THAT NO INFORMATION WAS FILED BY THE ASSESSEE IN RE SPECT OF THE CLAIM OF EXEMPTION BEFORE THE AO AND FURTHER FOUND THAT THERE IS DIFFERENCE IN THE RATES OF SHARES SOLD AS PER BSE A ND THE TRANSACTION OF SALE BY THE ASSESSEE AND EVEN BEFORE THE CIT(A) THE ASSESSEE COULD NOT SUBSTANTIATE WITH ANY EVIDEN CE AND LD. CIT(A) CONFIRMED THE ACTION OF ASSESSING OFFICER AN D DISMISSED THE APPEAL OF THE ASSESSEE. 6. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE H AS ASSAILED ON APPEAL BEFORE THE TRIBUNAL. BEFORE US THE LD. AR O F ASSESSEE SUBMITTED THAT THE ASSESSEE HAS HELD SHARES FOR MOR E THAN ONE YEAR AND THEREFORE THE ASSESSEE IS ELIGIBLE FOR EXE MPTION U/S. ITA NO. 2326/BANG/2018 PAGE 5 OF 6 10(38) AND FURTHER THE ASSESSEE WAS PREVENTED FROM SUBMITTING INFORMATION ON SHARES AS THERE WAS NO PROPER OPPORT UNITY PROVIDED IN THE COURSE OF ASSESSMENT PROCEEDINGS AND EMPHASI ZED THAT ONLY TWO HEARINGS WERE PROVIDED BY AO AND THE ASSES SEE COULD NOT COLLECT AND SUBMIT THE DETAILS OF SALE CONTRACT , PURCHASE CONTRACT AND DEMAT A/C AND OTHER DETAILS. FURTHER LD. AR OF ASSESSEE PRAYED FOR AN OPPORTUNITY TO SUBSTANTIATE WITH EVIDENCE BEFORE THE LOWER AUTHORITIES AND SUBMITTED PAPER BO OK WITH COPY OF CONTRACT NOTE, LEDGER ACCOUNT, BANK PASS BOOK AN D SHAREHOLDING STATEMENT TO SUBSTANTIATE THAT THE SHARES WERE PURC HASED THROUGH BANKING CHANNEL. PER CONTRA, THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. PRIMA FACIE THE ASSESSEE HAS SOLD THE SHAR ES HELD BY HIM FOR MORE THAN ONE YEAR AND THE PROCEEDS ARE CREDITE D TO ASSESSEES BANK ACCOUNT WHICH IS NOT DISPUTED. THE FACTS REMAINS THAT THE ASSESSEE COULD NOT SUPPORT WITH EVIDENCE B EFORE THE ASSESSING AUTHORITIES. WE ON PERUSAL OF THE PAPER BOOK FILED BY THE ASSESSEE FOUND THAT THE ASSESSEE HAS PURCHASED THE SHARES IN THE FINANCIAL YEAR 2011-12 AND SUBSEQUENTLY WERE SOLD IN ASSESSMENT YEAR 2014-15 AND THE TRANSACTION HAS BEE N THROUGH BANKING CHANNEL AND THE LD. AR ALSO FILED THE SUPPO RTING DETAILS ON SHARE PRICE. 8. WE FIND FROM THE ASSESSMENT ORDER, THE LD. AO HA S HELD THE HEARING OF CASE ON 08.11.2016 AND 05.12.2016 AND TH E ASSESSMENT ORDER U/SEC 143(3) WAS PASSED ON 05.12.2 016. WE CONSIDERING THE SUBMISSIONS OF THE LD. AR ARE OF TH E OPINION THAT ITA NO. 2326/BANG/2018 PAGE 6 OF 6 THE ASSESSEE WAS HAVING NECESSARY DETAILS BUT FOR V ARIOUS REASONS COULD NOT BE SUBSTANTIATED. THEREFORE THE ASSESSEE SHOULD BE PROVIDED WITH ONE MORE OPPORTUNITY AND AC CORDINGLY IN THE INTEREST OF SUBSTANTIAL JUSTICE, WE SET ASIDE T HE ORDER OF CIT(A) AND RESTORE THE ENTIRE DISPUTE TO THE FILE OF AO TO VERIFY AND EXAMINE THE DOCUMENTARY EVIDENCE AND ASSESSEE SHALL CO- OPERATE IN FURNISHING THE CLARIFICATIONS AND DETAIL S AT THE EARLIEST BEFORE THE ASSESSING AUTHORITY AND WE ALLOW THE GRO UNDS OF APPEAL FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF DECEMBER, 2018. SD/- SD/- (JASON P BOAZ) (PAVAN KUMAR GA DALE) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 21 ST DECEMBER, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.