Mahesh Chandra Chaurasia, Lucknow V. Dy. Commissioner of Income Tax, Lucknow

ITA 267/LKW/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4643 (ITAT-LUCKNOW)
• Duration Of Justice: 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-03-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 05-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Cost of acquisition

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.267/LKW/2015 ASSESSMENT YEAR:2011-12 D.C.I.T., CENTRAL CIRCLE-II, LUCKNOW. VS SHRI MAHESH CHANDRA CHAURASIA, 23, BATASHE WALI GALI, AMINABAD, LUCKNOW. PAN:ABIPC1468M (RESPONDENT) (APPELLANT) SHRI RAKESH GARG, ADVOCATE APPELLANT BY SHRI AMIT NIGAM, D. R. RESPONDENT BY 03/03/2016 DATE OF HEARING 17/03/2016 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE OR DER PASSED BY LEARNED CIT(A)-III, LUCKNOW DATED 29/01/2015 FOR THE ASSESS MENT YEAR 2011-12. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND ON FACTS IN PASSING THE ORDER WHICH IS I LLEGAL, IMPROPER AND AGAINST THE PRINCIPLES OF NATURAL JUST ICE. 2. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN PASSING THE ORDER WITHOUT GI VING ADEQUATE OPPORTUNITY OF BEING HEARD AND WITHOUT CONSIDERING THE SUBMISSION MADE BEFORE HIM. 3. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN MAKING ADDITION OF RS.9,82,4 48/- ON ACCOUNT OF LONG TERM CAPITAL GAIN. 3. IT WAS SUBMITTED BY LEARNED A. R. OF THE ASSESSE E THAT PHOTOCOPY OF DEMAT ACCOUNT STATEMENT FOR THE PERIOD FROM 01/12/2 007 TO 31/12/2007 IS AVAILABLE ON PAGE NO. 3 OF THE PAPER BOOK AND THE S AME FOR THE PERIOD FROM 2 01/04/2010 TO 31/03/2011 IS AVAILABLE ON PAGE NO. 4 OF THE PAPER BOOK. HE FURTHER SUBMITTED THAT AS PER THE DEMAT ACCOUNT STA TEMENT AVAILABLE ON PAGE NO. 3 OF THE PAPER BOOK, IT CAN BE SEEN THAT T HE SHARES OF ALLAHABAD BANK IN QUESTION WERE CREDITED IN THIS DEMAT ACCOUN T OF THE ASSESSEE DURING THIS PERIOD TO THE EXTENT OF 4,400 SHARES AN D AS PER THE DEMAT ACCOUNT STATEMENT AVAILABLE ON PAGE NO. 4 OF THE PA PER BOOK FOR FINANCIAL YEAR 2010-11, IT CAN BE SEEN THAT DURING THIS PERIO D, OUT OF THE SAME OPENING BALANCE OF 4,400 SHARES OF ALLAHABAD BANK, 4000 SHARES WERE SOLD OUT DURING THIS PERIOD. HE SUBMITTED THAT UNDER TH ESE FACTS, EVEN IF IT IS HELD THAT THE ASSESSEE HAS NOT EXPLAINED THE SOURCE OF ACQUISITION OF THESE SHARES, THE ADDITION MAY BE MADE IN THE YEAR OF PUR CHASE I.E. ASSESSMENT YEAR 2008-09 AND NOT IN ASSESSMENT YEAR 2011-12 WHE N THESE SHARES WERE SOLD BY THE ASSESSEE. 4. LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT AS PER PARA 6(VI) OF THE ASSESSMENT ORDER, IT IS NOTED BY THE A SSESSING OFFICER THAT DEMAT ACCOUNT FURNISHED BY THE ASSESSEE DO NOT REFL ECT PURCHASE OF SHARES OF ALLAHABAD BANK AND THEREFORE, THE EXEMPTION ON A CCOUNT OF LONG TERM CAPITAL GAIN OF RS.9,82,448/- IS DENIED AND THE SAM E IS BEING TREATED AS INCOME FROM OTHER SOURCES. BEFORE THIS, IN PARA 6( V) OF THE ASSESSMENT ORDER, IT IS NOTED THAT DESPITE OF GIVING SEVERAL O PPORTUNITIES, THE ASSESSEE COULD NOT FURNISH ANY SUPPORTIVE DOCUMENTS ON THE B ASIS OF WHICH DATE AND RATE OF PURCHASE OF SHARES COULD BE DETERMINED. HE NCE, IT IS SEEN THAT THE ASSESSING OFFICER IS DOUBTING THE DATE AND RATE OF PURCHASE OF THESE SHARES OF ALLAHABAD BANK WHICH WERE PURCHASED AS PER THE A SSESSEE ON 31/08/2002 AND THEREAFTER, THE SAME WERE DEMATERIAL IZED DURING DECEMBER 2007 AS PER THE COPY OF DEMAT ACCOUNT STATEMENT AVA ILABLE ON PAGE NO. 3 OF THE PAPER BOOK. EVEN IF THESE SHARES WERE PURCH ASED DURING DECEMBER, 3 2007 BEING THE MONTH IN WHICH THESE SHARES WERE NOT ED IN THE DEMAT ACCOUNT, THE ADDITION IN RESPECT OF THESE SHARES TO THE EXTENT OF COST OF PURCHASE CAN BE MADE IN THAT YEAR BEING ASSESSMENT YEAR 2008-09 AND NOT IN THE PRESENT YEAR. REGARDING THE GAIN ON SALE OF THESE SHARES ALSO, IT CANNOT BE SAID THAT THE GAIN IS NOT LONG TERM CAPIT AL GAIN EVEN IF THE DATE OF PURCHASE IS TAKEN AS DECEMBER, 2007 BEING THE DA TE OF CREDIT IN DEMAT ACCOUNT OF THE ASSESSEE THEN ALSO, THE PERIOD OF HO LDING IS MORE THAN ONE YEAR AND THEREFORE, THE GAIN IS LONG TERM CAPITAL G AIN ON SALE OF QUOTED SHARES WHICH IS EXEMPT AND ONCE IT IS HELD THAT THE LONG TERM CAPITAL GAIN IS EXEMPT, WHAT IS THE COST OF ACQUISITION AND HOW MUCH IS CAPITAL GAIN IS NOT RELEVANT BECAUSE WHATEVER BE THE GAIN, THE ENTIRE G AIN WILL BE EXEMPT. UNDER THESE FACTS, WE FEEL THAT THE ADDITION MADE IS NOT JUSTIFIED. HOWEVER, THE ASSESSING OFFICER IS AT LIBERTY TO EXAMINE THE EVIDENCE AND SOURCE OF ACQUISITION OF THESE SHARES AND IF THE ASSESSEE IS NOT ABLE TO EXPLAIN THE SOURCE, THE ADDITION MAY BE MADE IN THE YEAR OF PUR CHASE WHICH MAY BE ASSESSMENT YEAR 2003-04 OR 2008-09 BUT NO ADDITION CAN BE MADE IN THE PRESENT YEAR. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GAROD IA ) JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED:17/03/2016 *SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR