M.Bhagyawanti, CHENNAI V. ITO NCW 4(5), CHENNAI

ITA 2641/CHNY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1580 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 12-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Assessee Lawyers: B RAMAKRISHNAN
• Keywords: Set aside; Capital Gains

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI ... , . ! , # $ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ./ ITA NO.2637/CHNY/2018 & '& / ASSESSMENT YEAR : 2010-11 SMT. USHA DEVI, NO.119, AUDIAPPA NAICKEN STREET, SOWCARPET, CHENNAI - 600 079. PAN : AAFPJ 8304 D V. THE INCOME TAX OFFICER, NON CORPORATE WARD - 6(3), CHENNAI - 600 006. ()*/ APPELLANT) (+,)*/ RESPONDENT) ./ ITA NO.2638/CHNY/2018 & '& / ASSESSMENT YEAR : 2013-14 SMT. NIRMALA DEVI SURESH KUMAR, NO.41, NARAYANA MUDALI STREET, SOWCARPET, CHENNAI - 600 079. PAN : AASPS 4466 N V. THE INCOME TAX OFFICER, NON CORPORATE WARD - 6(3), CHENNAI - 600 006. ()*/ APPELLANT) (+,)*/ RESPONDENT) ./ ITA NOS.2639, 2640 & 2641/CHNY/2018 & '& / ASSESSMENT YEARS : 2010-11, 2011-12 & 2013-14 SMT. M. BHAGYAWANTI, NO.119, AUDIAPPA NAICKEN STREET, SOWCARPET, CHENNAI - 600 079. PAN : AJLPM 5885 D V. THE INCOME TAX OFFICER, NON CORPORATE WARD - 4(5), CHENNAI - 600 006. ()*/ APPELLANT) (+,)*/ RESPONDENT) 2 I.T.A. NOS.2637 TO 2648/CHNY/18 ./ ITA NO.2642/CHNY/2018 & '& / ASSESSMENT YEAR : 2010-11 SMT. SUSHILA DEVI, NO.119, AUDIAPPA NAICKEN STREET, SOWCARPET, CHENNAI - 600 079. PAN : ABFPK 0618 Q V. THE INCOME TAX OFFICER, NON CORPORATE WARD - 6(3), CHENNAI - 600 006. ()*/ APPELLANT) (+,)*/ RESPONDENT) ./ ITA NO.2643/CHNY/2018 & '& / ASSESSMENT YEAR : 2010-11 SHRI SANDEEP KUMAR, NO.91, NARAYANA MUDALI STREET, SOWCARPET, CHENNAI - 600 079. PAN : BFNPS 5811 Q V. THE INCOME TAX OFFICER, NON CORPORATE WARD - 6(3), CHENNAI - 600 006. ()*/ APPELLANT) (+,)*/ RESPONDENT) ./ ITA NO.2644/CHNY/2018 & '& / ASSESSMENT YEAR : 2012-13 SMT. MANJUDEVI NATHMAL, NO.41, NARAYANA MUDALI STREET, SOWCARPET, CHENNAI - 600 079. PAN : AADPN 2578 H V. THE INCOME TAX OFFICER, NON CORPORATE WARD - 5(2), CHENNAI - 600 006. ()*/ APPELLANT) (+,)*/ RESPONDENT) ./ ITA NO.2645/CHNY/2018 & '& / ASSESSMENT YEAR : 2010-11 SMT. NITA DEVI, NO.75/68, 1 ST FLOOR, ARIHANT RESIDENCY, SYDENHAMS ROAD, PERIAMET, CHENNAI - 600 003. PAN : AEYPN 7438 K V. THE INCOME TAX OFFICER, NON CORPORATE WARD - 5(2), CHENNAI - 600 006. ()*/ APPELLANT) (+,)*/ RESPONDENT) 3 I.T.A. NOS.2637 TO 2648/CHNY/18 ./ ITA NO.2646/CHNY/2018 & '& / ASSESSMENT YEAR : 2010-11 SMT. RITADEVI DILIPKUMAR, NO.119, AUDIAPPA NAICKEN STREET, SOWCARPET, CHENNAI - 600 079. PAN : AEHPR 7711 L V. THE INCOME TAX OFFICER, NON CORPORATE WARD - 6(1), CHENNAI - 600 006. ()*/ APPELLANT) (+,)*/ RESPONDENT) ./ ITA NO.2647/CHNY/2018 & '& / ASSESSMENT YEAR : 2012-13 SHRI JUGRAJ NATHMAL, NO.41, NARAYANA MUDALI STREET, SOWCARPET, CHENNAI - 600 079. PAN : AADPN 2577 J V. THE INCOME TAX OFFICER, NON CORPORATE WARD - 6(3), CHENNAI - 600 006. ()*/ APPELLANT) (+,)*/ RESPONDENT) ./ ITA NO.2648/CHNY/2018 & '& / ASSESSMENT YEAR : 2013-14 SMT. LEELA DEVI, NO.47, NARAYANA MUDALI STREET, SOWCARPET, CHENNAI - 600 079. PAN : AABPL 6989 Q V. THE INCOME TAX OFFICER, NON CORPORATE WARD - 5(3), CHENNAI - 600 006. ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANTS BY : SH. B. RAMAKRISHNAN, FCA +,)* - . / RESPONDENT BY : SHRI R. CLEMENT RAMESH KUMAR, ADDL.CIT / - 0# / DATE OF HEARING : 04.06.2019 12' - 0# / DATE OF PRONOUNCEMENT : 07.06.2019 4 I.T.A. NOS.2637 TO 2648/CHNY/18 / O R D E R PER BENCH : THE APPEALS FILED BY INDEPENDENT ASSESSEES ARE DI RECTED AGAINST THE RESPECTIVE ORDERS OF THE COMMISSIONER O F INCOME TAX (APPEALS)-5, CHENNAI. SINCE COMMON ISSUE ARISES FO R CONSIDERATION IN ALL THESE APPEALS, WE HEARD THESE APPEALS TOGETH ER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. SH. B. RAMAKRISHNAN, THE LD. REPRESENTATIVE FOR THE ASSESSEES, SUBMITTED THAT THE ASSESSEES CLAIMED EXE MPTION UNDER SECTION 10(38) OF THE INCOME-TAX ACT, 1961 (IN SHOR T 'THE ACT') IN RESPECT OF LONG TERM CAPITAL GAINS ARISING OUT OF T HE SHARES SOLD BY THEM. THE LD. REPRESENTATIVE FURTHER SUBMITTED TH AT THE ASSESSING OFFICER MAINLY PLACED HIS RELIANCE ON THE INVESTIGA TION REPORT OF INVESTIGATION WING OF THE DEPARTMENT AT KOLKATA. A CCORDING TO THE LD. REPRESENTATIVE, A COPY OF THE SAID INVESTIGATIO N REPORT WAS NOT FURNISHED TO THE ASSESSEES. THEREFORE, THE LD. REP RESENTATIVE SUBMITTED THAT AN OPPORTUNITY MAY BE GIVEN TO THE A SSESSEES BY REMITTING BACK THE MATTER TO THE FILE OF THE ASSESS ING OFFICER. 5 I.T.A. NOS.2637 TO 2648/CHNY/18 3. ON THE CONTRARY, SHRI R. CLEMENT RAMESH KUMAR, T HE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT HE IS P LACING RELIANCE ON THE ORDERS OF THE ASSESSING OFFICER AS WELL AS T HE CIT(APPEALS). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEES MADE INVESTMENTS IN THE SHARES, SOLD THE SAME IN DU E COURSE AND DISCLOSED LONG TERM CAPITAL GAINS ON THE SALE OF TH ESE SHARES, AS SHOWN IN THE FOLLOWING TABLE: NAME OF THE ASSESSEE ASSESS- MENT YEAR NO. OF SHARES SOLD AMOUNT RECEIVED ON SALE OF SHARES LONG TERM CAPITAL GAIN CLAIMED UNDER SECTION 10(38) SMT. USHA DEVI 2010-11 3000 SHARES OF M/S BAKRA PRATHISTHAN LTD. 10.57,500/- 10.57,500/- SMT. NIRMALA DEVI SURESH KUMAR 2013-14 3500 SHARES OF M/S BLUE PRINT SECURITIES LTD. 4,60,425/- 4,44,502/- SMT. M. BHAGYAWANTI 2010-11 2011-12 2013-14 3000 SHARES OF M/S BAKRA PRATHISTHAN LTD. 3500 SHARES OF M/S BLUE PRINT SECURITIES LTD. 1600 SHARES OF M/S BAKRA PRATHISTHAN LTD. 10,57,500/- 10,47,500/- 5,70,240/- 9.92,504/- 10,35,011/- 5,37,455/- SMT. SUSHILA DEVI 2010-11 3000 SHARES OF M/S BAKRA PRATHISTHAN LTD. 10,69,000/- 10,69,000/- SHRI SANDEEP KUMAR 2010-11 3000 SHARES OF M/S BAKRA PRATHISTHAN LTD. 7,40,250/- 7,40,250/- SMT. MANJUDEVI NATHMAL 2012-13 3500 SHARES OF M/S BLUE PRINT SECURITIES LTD. 10,37,249/- 10,74,400/- SMT. NITA DEVI 2010-11 3500 SHARES OF M/S BAKRA PRATHISTHAN LTD. 10,57,500/- 9,92,868/- 6 I.T.A. NOS.2637 TO 2648/CHNY/18 RITA DILIPKUMAR 2010-11 3000 SHARES OF M/S BAKRA PRATHISTHAN LTD. 10,57,499/- 10,57,499/- SHRI JUGRAJ NATHMAL 2012-13 3000 SHARES OF M/S BLUE PRINT SECURITIES LTD. 10,74,325/- 10,37,249/- SMT. LEELA DEVI 2013-14 3500 SHARES OF M/S BLUE PRINT SECURITIES LTD. 10,81,087/- 10,46,087/- THE LONG TERM CAPITAL GAINS CLAIMED BY THE ASSESSEE S UNDER SECTION 10(38) OF THE ACT WERE DISALLOWED BY THE AS SESSING OFFICER ON THE GROUND THAT THE COMPANIES IN WHICH THE ASSES SEES INVESTED ARE PENNY STOCK COMPANIES. HOWEVER, IT IS NOT BROU GHT ON RECORD HOW THE ASSESSEES ARE INVOLVED IN PROMOTING THE PEN NY STOCK COMPANIES AND HOW THE ASSESSEES INVOLVED IN INFLATI NG THE SHARES OF THE COMPANIES. MOREOVER, THE COPY OF THE INVEST IGATION REPORT SAID TO BE RECEIVED FROM INVESTIGATION WING OF THE DEPARTMENT AT KOLKATA WAS NOT FURNISHED TO THE ASSESSEES. ON IDE NTICAL CIRCUMSTANCES, THIS TRIBUNAL IN THE CASE OF KANHAIY ALAL & SONS (HUF) V. ITO IN I.T.A. NO.1849/CHNY/2018, HAS REMIT TED BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR REC ONSIDERATION. IN FACT, THIS TRIBUNAL HAS OBSERVED AT PARA 4 OF ITS O RDER DATED 06.02.2019 AS FOLLOWS:- 4. WE HEARD SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE ALSO. ADMITTEDLY, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEES ON THE BASIS OF THE INFORMATION SAID TO B E 7 I.T.A. NOS.2637 TO 2648/CHNY/18 RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT AT KOLKATA WITH REGARD TO INVESTMENT MAD E BY THE ASSESSEES IN THE PENNY STOCK COMPANY. IT IS NOT IN DISPUTE THAT A COPY OF THE INVESTIGATION REPORT SAID TO BE RECEIVED FROM KOLKATA WAS NOT FURNISHED TO TH E ASSESSEE. MOREOVER, DETAILS OF THE ENQUIRIES SAID TO BE MADE BY THE ASSESSING OFFICER WERE ALSO NOT FURNISH ED TO THE ASSESSEES. IN THOSE CIRCUMSTANCES, THIS TRI BUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFF ICER HAS TO RECONSIDER THE ISSUE AFRESH AFTER FURNISHING THE MATERIAL RELIED UPON BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BEL OW ARE SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL BRING ON RECORD THE ROLE OF THE ASSES SEES IN PROMOTING THE COMPANY AND THE RELATIONSHIP OF TH E ASSESSEES, IF ANY WITH THE PROMOTERS, ROLE OF THE ASSESSEES IN INFLATING THE PRICE OF SHARES, ETC. T HE ASSESSING OFFICER SHALL ALSO FURNISH A COPY OF THE INVESTIGATION REPORT SAID TO BE RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT AT KOLKATA AND OTHER MATERIALS IF ANYTHING IN HIS POSSESSION AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WI TH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEES. 5. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFFICER. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITI ES BELOW ARE SET ASIDE AND THE ISSUE RAISED BY THE ASSESSEES WITH RE GARD TO DEDUCTION UNDER SECTION 10(38) OF THE ACT IS REMITT ED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SH ALL EXAMINE THE MATTER AS DIRECTED BY THIS TRIBUNAL IN THE CASE OF KANHAIYALAL & 8 I.T.A. NOS.2637 TO 2648/CHNY/18 SONS (HUF) (SUPRA) AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE OPPO RTUNITY TO THE ASSESSEES. 6. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSE SSEES ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 7 TH JUNE, 2019 AT CHENNAI. SD/- SD/- ( . ! ) ( ... ) (M. BALAGANESH) (N.R.S. GANESAN) # / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 7 TH JUNE, 2019. KRI. - +056 76'0 /COPY TO: 1. )* /APPELLANT 2. +,)* /RESPONDENT 3. / 80 () /CIT(A)-5, 4. PRINCIPAL CIT-9, CHENNAI 5. 69 +0 /DR 6. :& ; /GF.