Sharad Bhutra(HUF) , Bangalore V. The Income Tax Officer Ward-7(2)(4), Bangalore

ITA 2564/BANG/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5299 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 11-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURUPRASAD B L
• 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 C BENCH (SMC) : B ENGALURU SHRI JASON P BOAZ , ACCOUNTANT MEMBER I TA NO. 2 564 / BANG/2 0 1 8 (ASSESSMENT YEAR: 20 15 - 1 6 ) SHARAD BHUTRA (HUF), 555, NEW HOPE 2 ND A CROSS, 13THMAIN, BANASHANKARI 2 ND STAGE, BANGALORE - 560 070 PAN: AAQHS9116M VS. APPELLANT INCOME - TAX OFFICER, WARD 7 (2)( 4 ), BENGALURU. RESPONDENT APPELLANT BY : S MT. SUMAN LUNKAR , CA . RESPONDENT BY : SHRI GURUPRASAD B L, ADDL.CIT(DR) DATE OF HEARING : 08/10 /2018 DATE OF PRONOUNCEMENT : 12 / 10 /2018 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER OF THE CIT(A) - 7 , BENGALURU, DATED 30/07 /2018 FOR ASSESSMENT YEAR 2015 - 16. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS UNDER: - 2.1 THE ASSESSE E, HUF , FILE D ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2015 - 16 ON 03/08 / 2015 DECLARING INCOME OF RS. 2,49,990 / - FROM OTHER SOURCES AND CAPITAL GAINS (LTCG) OF RS. 40,67,562 / - CLAIMED AS EXEMPT U/S 10(38) OF THE INCOME - TAX ACT,1961 (IN SHORT THE ACT ). THE CASE WAS TAK EN UP FOR SCRUTINY AND THE ASSESSMENT WAS CONCLUDED U/S 143(3) O F THE ACT VIDE ORDER DATED 28/11 /2017, WHERE IN THE ASSESSEE S INCOME WAS DETERMINED AT RS. 38,72,621 / - IN VIEW OF THE CAPITAL GAINS OF RS. 36,22,721 / - DECLARED BY THE ASSESSEE, ARISING ON ACCOUN T OF SALE OF SHARES OF M/S. LIFE LINE DRUGS & PHARMA AND M/S. YAMINI INVESTMENTS , BEING HELD TO BE UNEXPLAINED CASH CREDITS U/S 68. ON APPEAL, THE CIT(A) - 7 , ITA NO. 2 564 /BANG/20 18 PAGE 2 BENGALURU, DISMISSED THE ASSESSEE S APPEAL VI DE THE IMPUGNED ORDER DATED 30/07 /2018. 3.1 AGGRIEVED BY THE ORDER OF THE CIT(A) - 5, BENGALURU, DATED 30/07 /2018 FOR ASSESSMENT YEAR 2015 - 16, THE ASSESSEE HAS PREFERRED THIS APPEAL WHEREIN IT HAS RAISED THE FOLLOWING GROUNDS: - ITA NO. 2 564 /BANG/20 18 PAGE 3 3.2 DURING THE COURSE OF HEARING, THE LD.AR FOR THE ASSESSEE SUBMIT TED 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 BUTORI A . IT IS SUBMITTED THAT IN THE CITED CASE (SUP RA) 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 (AO) 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 ADDITION 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 I NVESTIGATION DIRECTORATE OF DIT, KOLKATA, WITHOUT BRINGING THE SAME ON RECORD OR CONFRONTING THE ASSESSEE WITH OR SUPPLYING THE ASSESSEE COPIES OF THE DOCUMENTS RELIED UPON FOR MAKING THE ADDITION AN D PROVIDING HER OPPORTUNITIES FOR H ER REBUTTAL. IT IS PRAYED THAT IN VIEW OF THE ABOVE , THE ORDERS OF THE AUTHORITIES BELOW BE SET ASIDE AND THE ASSESSEE S APPEAL BE ALLOWED. 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 RES TORED THE ISSUE TO THE FILE OF THE AO HAVING OBSERVED THAT THE ADDITIONS WERE MADE BASED ON REPORTS OF THE INVESTIGATION DIRECTORATE AT KOLKATA A ND STATEMENTS 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 PROPOSED TO BE USED AGAINST THE ASSESSEE, ALLOW REBUTTAL THEREOF AND CROSS EXAMINATION OF PARTIES ON WHO SE TESTIMONY IS PROPOSED TO BE RELIED UPON AND THE MATTER BE ITA NO. 2 564 /BANG/20 18 PAGE 4 ADJUDICATED AFRESH AFTER AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND TO ALSO FILE DETAILS/SUBMISSIONS IN THIS REGARD. 3.4 IN REJOINDER, THE LD.AR FOR THE ASSESSEE DID NOT DI SPUTE 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 A ND 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 ARV IND KUMAR MOOLCHAND (SUPRA) AND PUKHRAJ HASMUKHLAL (SUPRA) . F OLLOWING 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 , CLAIM ED EXEMPT U/S 10(38) OF THE ACT , TO THE FIL E OF THE AO TO RE - ADJUDICATE THE ISSUE AFRESH; AFTER MAKING AVAILABLE TO THE ASSESSEE FOR REBUTTAL ALL DOCUMENTS ; INCLUDING STATEMENTS, INVESTIGATION REPORTS, ETC. RELIED UPON BY REVENUE FOR MAKING THE ADDITIONS/DISALLOWANCES AND PROVIDING ADEQUATE OPPORT UNITY TO THE ASSESSEE FOR CROSS - EXAMINATION OF PERSONS WHOSE STATEMENTS ARE BEING RELIED UPON. IT IS ACCORDINGLY ORDERED. 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 12TH OCTOBER , 2018 . SD/ - (JASON P BOAZ) ACCOUNTANT MEMBER PLACE : BENGALURU. D A T E D : 12 /1 0/ 201 8 *REDDY GP, S PS ITA NO. 2 564 /BANG/20 18 PAGE 5 COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE