SHRIMATI SANTOSH BHATIA, JALANDHAR V. INCOME TAX OFFICER-3(2), JALANDHAR

ITA 245/ASR/2018

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9217 (ITAT-AMRITSAR)
• Duration Of Justice: 4 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 26-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 147; 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No. 245/Asr/2018 Assessment Year: 2009-10 Smt. Santosh Bhatia, H.No. ER-242-Pacca Bagh, Jalandhar [PAN: ALXPB 3590Q] Vs. Income Tax Officer, Ward-3(2), Jalandhar (Appellant) (Respondent) Appellant by : None Respondent by: Sh. S. M. Surendranath, Sr. DR Date of Hearing: 17.05.2022 Date of Pronouncement: 08.07.2022 ORDER Per Dr. M. L. Meena, AM: The captioned appeal is directed against the order of the Commissioner of Income Tax (Appeals)-2, Jalandhar (hereinafter referred to as “the CIT(A)”) in respect of assessment year 2009 – 10 wherein the assessee has raised the following grounds of appeal: “1. That having regard to the facts and circumstances of the case, Hon’ble CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned assessment order u/s 143(3)/147 and without ITA No. 245/Asr/2018 Santosh Bhatia v. ITO 2 complying with the mandatory conditions u/s 147 as envisaged under the Income Tax Act, 1961. 2. (i) That having regard to the facts and circumstances of the case, Hon’ble CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs. 5,39,602/- u/s 69A of the Act without considering the submissions of the assessee and ignoring the fact that assessee had genuine short term capital gain/loss. (ii) That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making addition of Rs. 5,39,602/- without considering the evidences proving the fact that the transactions were executed on electronic trading platform, is bad in law and against the facts and circumstances of the case. 3. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.” 2. At the time of hearing, none appeared for the assessee. We have rejected the adjournment application of the appellant and decided to hear the case on merits based on written submission and material on record after hearing the learned DR. 3. Apropos ground number 2(ii), the appellant assessee challenged the action of the learned CIT appeal is bad in law and against the facts of the case in confirming the action of the AO in making addition of Rs.539,602/– without considering the evidences proving to the fact that the transactions were executed on electronic trading platform. 4. Based on information received that appellant has received bogus long-term capital gains in the period under consideration on account of purchase and sale of shares of one particular company which deals in ITA No. 245/Asr/2018 Santosh Bhatia v. ITO 3 penny stock, the assessment proceedings initiated under section 147 of the act where assessee has not filed its return of income. In the course of scrutiny proceedings, the assessing officer (in short “the AO”) has made an addition of Rs. 539,602/- on account of bogus transaction of sale and purchase of shares under section 69A of the act. 5. The learned CIT appeal has confirmed the finding of the AO by stating that the assessee could not bring on record any evidence in support of these share transactions having being executed on electronic trading platform of NSE/BSE. 6. The counsel for the assessee submitted that the assessee has carried the share trading transactions on the electronic platform as evident from detailed financial ledgers maintained by the stockbrokers. He argued that the sale proceeds from these share transactions are short-term gains and that a script -wise client version of the year preceding to the relevant assessment years from both the brokers were filed during the appellate proceedings providing the fact that they were purchased in previous year and sold and current year and were held for a period of less than one year (APB page 106 110). The learned CIT appeal has not brought on record any evidence to disprove that the financial ledgers filed was bogus and incorrect to the effect that subject share transactions were carried on BSE/ NSE were not carried on electronic trading platform. 7. Per contra, the landed additional CIT DR stands by the impugned order. ITA No. 245/Asr/2018 Santosh Bhatia v. ITO 4 8. We heard the learned additional CIT DR and perusal of the record, written submissions of the appellant assessee and the impugned order. The AR objected to the assessment order being framed against the appellant assessee solely based on assumption of wrong and incorrect facts. The counsel contended that the assessee never had any share of M/s Dhanus Technologies Ltd. For the period of more than one year and so no exemption was ever claimed under section 10(38) of the act. However, the assessee did not indulge in trading of shares of M/s Dhanus Technologies Ltd. once, but did the sale and purchase of shares through the company several times on electronic trading platform. Accordingly, he pleads that assessee did not enjoy the passion case of the sales of the company in order to any capital formation from the said investments. 9. From the above, it is evident that the AO/CIT appeal has not brought any material evidence on record to establish that the financial ledgers filed was bogus and incorrect to the effect that subject share transactions were carried on BSE/ NSE were not carried on electronic trading platform. In our view, the AO was required to examine the source of investment, genuineness of transaction from the financial ledgers of the share broker company who has been dealing in the subject shares on electronic trading platform of NSE/BSE for the assessee. Accordingly, we consider that it is a fit case to be remanded back to the file of the AO to examine the matter afresh by passing a de novo assessment order. The AO is directed to consider the submissions of the assessee made during the course of assessment proceedings and would be filed in compliance to the query if ITA No. 245/Asr/2018 Santosh Bhatia v. ITO 5 any. No doubt, the assessee is required to cooperate in the assessment proceedings before the AO. 10. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 08.07.2022. Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr.PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(Appeals) (4) The CIT concerned (5) The Sr. DR, I.T.A.T. True Copy By Order