Abhishek Agarwal , Bangalore V. The Income Tax Officer Ward-4(3)(1), Bangalore

ITA 2521/BANG/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1198 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 04-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P. RENUGADEVI
• Keywords: Unexplained cash credit; Income from undisclosed sources; Opportunity of being heard; Set aside; Capital Gains
• Section: 68; 143(3); 201; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BANGALORE BENCH C BEFORE S HRI JASON P BOAZ , ACCOUNTANT MEMBER I.T . A. NO. 252 1 /BANG/20 18 (ASSESSMENT YEAR : 20 15 - 16 ) SRI A BHISHEK AGARWAL, NO.12/A, 1 ST FLOOR, 100 FEET ROAD, J.P. NAGAR, 6 TH PHASE, BANG ALORE - 560 078 . . APPELLANT. PAN AI R PA 2564J VS. INCOME TAX OFFICER, WARD 4(3)( 1 ), BANGALORE. .. RESPONDENT . APPELLANT BY : SHRI R.K. GANERIWALA, C.A. R E SPONDENT BY : SMT. P. RENUGADEVI, JCIT (D.R) DATE OF H EARING : 19.11.2018. DATE OF P RONOUNCEMENT : 27 .11 .201 8 . O R D E R PER SHRI JASON P BOAZ, A .M . : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 4 , BANGALORE , DT.26.06.2018 FOR THE ASSESSMENT YEAR 20 15 - 16. 2 IT A NO. 252 1 /BANG/201 8 2. BRIEFLY STATED, TH E FACTS OF THE CASE ARE AS UNDER : - 2.1 THE ASSESSEE, AN INDIVIDUAL, FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2015 - 16 ON 30.3.2016 DECLARING INCOME OF RS.23,31,810 UNDER THE HEAD BUSINESS , OTHER SOURCES AND LONG TERM CAPITAL GAINS (LTCG) OF RS.14,96,100 CLAIMED AS EXEMPT UNDER SECTION 10(38) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). THE CASE WAS TAKEN UP FOR SCRUTINY AND THE ASSESSMENT WAS CONCLUDED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DT.28.12.2017, WHEREIN THE ASSESSEE'S I NCOME WAS DETERMINED AT RS.38,75,780, IN VIE W OF THE SALE PROCEEDS OF RS. 15,43,970 ARISING ON ACCOUNT OF SALE OF 5,000 SHARES OF M/S. JACKSON INVESTMENT LTD., BEING HELD TO BE UNEXPLAINED CASH CREDITS UNDER SECTION 68. ON APPEAL, THE CIT (APPEALS) 4, BENGALURU, DISMISSED THE ASSESSEE'S APPEAL VIDE THE IMPUGNED ORDER DT.26.06.2018. 3.1 AGGRIEVED BY THE ORDER OF THE CIT (APPEALS) 4, BENGALURU, DT.26.06.2018 FOR ASSESSMENT YEAR 2015 - 16, THE ASSESSEE HAS PREFERRED THIS APPEAL WHEREIN IT HAS RAISED T HE FOLLOWING GROUNDS : - 3 IT A NO. 252 1 /BANG/201 8 4 IT A NO. 252 1 /BANG/201 8 5 IT A NO. 252 1 /BANG/201 8 3.2 DURING THE COURSE OF HEARING, THE LD.AR FOR THE ASSESSEE SUBMITTED THAT ON SIMILAR FACTS AND CIRCUMSTANCES, THE MATTER FOR CONSIDERATION IS SQUARELY COVERED BY THE DECISION OF THE ITAT, KOLKATA BENCH IN ITS ORDER IN ITA N O.2394/KOL/2017 IN THE CASE OF PRAKASH CHAND BUTORIA . IT IS SUBMITTED THAT IN THE CITED CASE (SUPRA) ALSO, THE ASSESSEE, AN INDIVIDUAL, FILED HIS RETURN OF INCOME CLAIMING INCOME ON SALE OF SHARES AS EXEMPT U/S 10(38) OF THE ACT. THE ASSESSING OFFICER (A O) TREATED THE RECEIPT OF SALE CONSIDERATION AS UNACCOUNTED INCOME AND MADE AN ADDITION U/S 68 OF THE ACT. ON APPEAL THE CIT(A) UPHELD THE AO S ORDER. HOWEVER, ON FURTHER APPEAL, THE ITAT, KOLKATA BENCH ALLOWED THE ASSESSEE S APPEAL OBSERVING THAT THE AD DITION WAS UNSUSTAINABLE SINCE THE AO MADE THE ADDITION IN A ROUTINE AND MECHANIZED MANNER: MERELY ON SUSPICIONS BASED ON REPORT OF ENQUIRIES MADE BY THE INVESTIGATION DIRECTORATE OF DIT, KOLKATA, WITHOUT BRINGING THE SAME ON RECORD OR CONFRONTING THE ASSE SSEE WITH OR SUPPLYING THE ASSESSEE COPIES OF THE DOCUMENTS RELIED UPON FOR MAKING THE ADDITION AND PROVIDING H IM OPPORTUNITIES FOR REBUTTAL. IT IS PRAYED THAT IN VIEW OF THE ABOVE, THE ORDERS OF THE AUTHORITIES BELOW BE SET ASIDE AND THE ASSESSEE S A PPEAL BE ALLOWED. 6 IT A NO. 252 1 /BANG/201 8 3.3 PER CONTRA, THE LD. DR FOR REVENUE SUBMITTED THAT ON SIMILAR FACTS AND CIRCUMSTANCES AS IN THE CASE ON HAND, ISSUE FOR CONSIDERATION IS COVERED BY THE DECISIONS OF THE BENGALURU ITAT IN THE CASES OF ARVIND KUMAR MOOLCHAND IN ITA NO.509/BANG/2017 AND PUKHRAJ HASMUKHLAL IN ITA NO.1927/BANG/2017 WHEREIN THE TRIBUNAL HAS RESTORED THE ISSUE TO THE FILE OF THE AO HAVING OBSERVED THAT THE ADDITIONS WERE MADE BASED ON REPORTS OF THE INVESTIGATION DIRECTORATE AT KOLKATA AND STATEMEN TS OF VARIOUS PERSONS WITHOUT CONFRONTING OR MAKING THEM AVAILABLE TO THE ASSESSEE FOR REBUTTAL. IN THOSE CASES, THE TRIBUNAL RESTORED THE MATTER TO THE FILE OF THE AO WITH THE DIRECTION TO CONFRONT THE ASSESSEE WITH THE REPORTS/DOCUMENTS/ STATEMENTS PROP OSED TO BE USED AGAINST THE ASSESSEE, ALLOW REBUTTAL THEREOF AND CROSS EXAMINATION OF PARTIES ON WHOSE TESTIMONY IS PROPOSED TO BE RELIED UPON AND THE MATTER BE ADJUDICATED AFRESH AFTER AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND TO ALSO FILE DETAILS/SUBMISSIONS IN THIS REGARD. 7 IT A NO. 252 1 /BANG/201 8 3.4 IN REJOINDER, THE LD.AR FOR THE ASSESSEE DID NOT DISPUTE THE PROPOSITION PUT FORTH BY THE LD. DR FOR RESTORING THIS ISSUE TO THE FILE OF THE AO FOR DE NOVO ADJUDICATION. 3.5 I HAVE HEARD BOTH PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD INCLUDING THE JUDICIAL DECISIONS CITED AND THE ORDERS OF THE AUTHORITIES BELOW. TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE JUDICIAL DECISIONS CITED, I FIND THAT THE ISSUE FOR CONSIDERATION IS SQUARELY COVERED BY THE ORDERS OF THE BENGALURU ITAT IN THE CASES OF ARVIND KUMAR MOOLCHAND (SUPRA) AND PUKHRAJ HASMUKHLAL (SUPRA). FOLLOWING THE AFORESAID ORDERS (SUPRA), I SET ASIDE THE ORDERS OF THE AO AND RESTORE THE MATTER OF TREATMENT OF PROFIT DECLARED ON SALE OF SHARES, CLAIMED AS EXEMPT U/S 10(38) OF THE ACT, TO THE FILE OF THE AO TO RE - ADJUDICATE THE ISSUE AFRESH; AFTER MAKING AVAILABLE TO THE ASSESSEE FOR REBUTTAL ALL DOCUMENTS; INCLUDING STATEMENTS, INVESTIGATION REP ORTS, ETC. RELIED UPON BY REVENUE FOR MAKING THE ADDITIONS/DISALLOWANCES AND PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE FOR CROSS - EXAMINATION OF PERSONS WHOSE STATEMENTS ARE BEING RELIED UPON. IT IS ACCORDINGLY ORDERED. 8 IT A NO. 252 1 /BANG/201 8 4. IN THE RESULT, THE ASSESSEE S APPEAL FOR ASSESSMENT YEAR 2015 - 16 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 2 7TH DAY OF NOV., 201 8 . SD/ - ( JASON P BOAZ ) ACCOUNTANT MEMBER BANGALORE, DT. 27 .11.2018. *REDDY GP COPY TO : 1 APPELLANT 4 CIT(A) 2 RESPONDENT 5 DR. ITAT, BANGALORE 3 CIT 6 GUARD FILE CERTIFIED TRUE COPY ASST. REGISTRAR INCOME TAX APPELLATE TRIBUNAL BANGALORE.