Pradeep Kumar, CHENNAI V. ITO, CHENNAI

ITA 2347/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7991 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 30-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: A S SRIRAMAN
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . . . , . , % BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. ASSESS MENT YEAR ( /APPELLANT) ( /RESPONDENT) 2346/MDS/2015 2009 10 MR. M. SAMPATH RAJ JAIN, 37, RANGANATHAN ROAD, NUNGAMBAKKAM, CHENNAI-600 034. PAN: AANPS3632F THE INCOME TAX OFFICER, NON-CORPORATE WARD-3(3) CHENNAI. 2347/MDS/2015 2009 10 MR.PRADEEP KUMAR, 5, JAMBULINGAM STREET, NUNGAMBAKKAM, CHENNAI-600 034. PAN: AAFPK5839G THE INCOME TAX OFFICER, NON-CORPORATE WARD-3(4) CHENNAI. 2348/MDS/2015 2009 10 SMT. SHARMILA 37, RANGANATHAN ROAD, NUNGAMBAKKAM, CHENNAI-600 034. PAN: AQZPS8314G THE INCOME TAX OFFICER, NON-CORPORATE WARD-3(3) CHENNAI. % / APPELLANT BY : MR. A.S.SRIRAMAN, ADVOCATE *+% /RESPONDENT BY : MR. P.RADHAKRISHNAN, JCIT %2 /DATE OF HEARING : 15 TH FEBRUARY, 2016 %2 /DATE OF PRONOUNCEMENT : 17 TH FEBRUARY, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM: THESE THREE APPEALS ARE FILED BY DIFFERENT ASSESSEE S AGGRIEVED BY THE SEPARATE ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-4, CHENNAI ALL DATED 09.11.2015 IN ITA NO.60, 33 & 34/2015-16/2009-10/CI T(A)-4, PASSED UNDER SECTION 143(3) R.W.S. 147 & 250(6) O F THE ACT IN THE CASE OF SHRI M.SAMPATH RAJ JAIN, SHRI PRADEE P KUMAR 2 ITA NOS.2346 TO 2348MDS/2015 AND SMT. SHARMILA FOR THE ASSESSMENT YEAR 2009-10 RESPECTIVELY. SINCE IDENTICAL ISSUES ARE INVOLVED IN THESE THREE APPEALS, THEY ARE HEARD TOGETHER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THOUGH THE ASSESSEES HAVE CHALLENGED THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) RAISING ELABO RATE GROUNDS, THE COMMON EFFECTIVE GROUNDS IN THESE APP EALS ARE AS UNDER:- I) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE REASSESSMENT IGNORING T HE PRINCIPLES LAID DOWN BY THE SUPREME COURT AND THE ORDER OF REASSESSMENT IS INVALID AND WITHOUT JURISD ICTION. II) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN SUSTAINING THE ORDER OF THE LEARNED ASSESSING OFFICER IN RELATION TO THE CLAIM OF EXEMP TION UNDER SECTION 10(38) AND 10(34) OF THE ACT FOR THE PROFIT EARNED ON SALE OF SHARES . III) THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) FAILED TO CONSIDER THE GROUND NOS. 3 & 4 RAISED BEF ORE HIM WHICH VITIATES THE ORDER. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEES A RE INDIVIDUALS FILED THEIR RETURN OF INCOME FOR THE AS SESSMENT YEAR 2009-10 AND THEREAFTER ALL THE RESPECTIVE CA SES WERE TAKEN UP FOR SCRUTINY AND ASSESSMENT WAS FINALIZED UNDER 3 ITA NOS.2346 TO 2348MDS/2015 SECTION 143(3) OF THE ACT WHEREIN THE LEARNED ASSES SING OFFICER HELD THAT THE ASSESSEE HAS CONCEALED UNDISC LOSED INCOME BY SALE OF SHARES WHICH ARE SHAM TRANSACTION S. SUBSEQUENTLY, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) ALSO CONFIRMED THE ORDER OF THE LEARNED A SSESSING OFFICER. 4. AT THE OUTSET, THE LEARNED AUTHORIZED REPRESENTA TIVE SUBMITTED BEFORE US THAT THE SHARES PURCHASED AND S OLD BY THE ASSESSEE WAS TREATED AS SHAM BY THE LEARNED ASS ESSING OFFICER BASED ON THE ASSESSMENT IN THE CASE OF THE SHARE BROKER WITH WHOM THE ASSESSEE HAD DEALT WITH. HE FU RTHER SUBMITTED THAT PURCHASE AND SALE OF SHARES WERE NOT INDEPENDENTLY VERIFIED BY THE LEARNED ASSESSING OFF ICER; HOWEVER, THEY WERE TREATED TO BE SHAM MERELY BASED ON THE ASSESSMENT OF THE SHARE BROKERS WITH WHOM THE ASSES SEES HAD MADE TRANSACTIONS WHEREIN IT WAS REVEALED THAT THE SHARE BROKER WAS INDULGING IN BOGUS TRANSACTIONS. THE LEA RNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE DECISI ONS OF THE REVENUE WITHOUT VERIFYING THE FACTS IN THE CASE OF THESE ASSESSEES ARE ERRONEOUS AND THEREFORE THERE IS NO M ERIT IN 4 ITA NOS.2346 TO 2348MDS/2015 THEIR ORDERS. IT WAS THEREFORE PLEADED THAT THE ORD ERS OF THE REVENUE MAY BE SET ASIDE. 5. LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON TH E ORDERS OF THE LEARNED ASSESSING OFFICER AND LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND ARGUED IN SUPPORT OF THE SAME. 6. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PER USED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF THE CASES, IT IS APPARENT THAT THE REVENUE HAD NOT MADE ANY INDEPENDENT VERIFICATION ON THE TRANSACTIONS MADE B Y THESE ASSESSEES THROUGH THE SHARE BROKERS. THE LEARNED DEPARTMENTAL REPRESENTATIVE ALSO COULD NOT CONTROVE RT TO THIS FINDINGS WHICH WERE BROUGHT TO THE KNOWLEDGE OF THE BENCH. IN THESE CIRCUMSTANCES ALL THE PARTIES AGREED FOR R EMITTING THE MATTER BACK TO THE FILE OF THE LEARNED ASSESSING OF FICER FOR DE NOVO CONSIDERATION. CONSIDERING THE FACTS AND CIRCU MSTANCES OF THESE CASES, IN THE INTEREST OF JUSTICE, WE HERE BY REMIT ALL THE THREE APPEALS BACK TO THE FILE OF THE LEARNED A SSESSING OFFICER TO CONSIDER THE MATTER AFRESH AND VERIFY TH E TRANSACTIONS MADE BY THE ASSESSEES WITH THE SHARE B ROKER AND THEREAFTER DECIDE THE MATTER IN ACCORDANCE WITH MERIT AND 5 ITA NOS.2346 TO 2348MDS/2015 AS PER LAW. AT THE SAME TIME, WE ALSO CAUTION ALL T HE ASSESSEES TO PROMPTLY CO-OPERATE BEFORE THE REVENUE BY FURNISHING ALL THE REQUISITE MATERIALS REQUIRED BY THE REVENUE FOR ARRIVING AT THEIR DECISIONS, FAILING WHICH THE REVENUE AUTHORITIES SHALL BE AT THE LIBERTY TO PASS APPROPR IATE ORDER ON MERITS, AFTER AFFORDING SUFFICIENT OPPORTUNITY TO T HE ASSESSEES OF BEING HEARD. 7. IN THE RESULT, ALL THE THREE APPEALS OF THE ASSE SSEES ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 17 TH FEBRUARY, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) 9: < / JUDICIAL MEMBER < / ACCOUNTANT MEMBER 9 /CHENNAI, > /DATED 17 TH FEBRUARY, 2016 SOMU % *:BC DC /COPY TO: 1. APPELLANT 2. RESPONDENT 3. E () /CIT(A) 4. E /CIT 5. C *::H /DR 6. K /GF .