Shyama Devi Bhutra , Bangalore V. The Income Tax Officer Ward-5(2)(4), Bangalore

ITA 2683/BANG/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9202 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 26-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Principle of natural justice; Opportunity of cross examination; Source of fund; Set aside; Capital Gains
• Section: 68; 143(3); 142(1); 133(6); 250; 143(2); 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, B E NGAL U R U BEFORE SHRI JASON P BOAZ , ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER ITA NO. 2683 /BANG/20 18 (ASSESSMENT YEAR: 20 15 - 16 ) MS. SHYAMA DEVI BHUTRA, NO.3, 3 RD CROSS, MYSORE ROAD, BENGALURU - 560 026. PAN:AAPPB 6293 H VS. APPELLANT INCOME - TAX OFFICER, WARD 5(2)(4), BENGALURU. RESPONDENT APPELLANT BY : SHRI SUMAN LUNKAR, CA. RESPONDENT BY : DR. P.V.PRADEEP KUMAR, ADDL.CIT(DR) DATE OF HEARING : 20 /12/2018 DATE OF PRONOUNCEMENT: 21 / 12/2018 O R D E R PER PAVAN KUMAR GADALE , J M : THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX(APPEALS) - 5, BENGALURU, IN ITA NO.10419/CIT(A) - 5/2017 - 18 PASSED U/S 143(3) AND 250 OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] DATED 25/07/2018 FOR THE ASSESSMENT YEAR 2015 - 16. 2. THE ASSESSEE HAS RAIS ED THE FOLLOWING GROUNDS OF APPEAL: ITA NO. 2683/ BANG/201 8 PAGE 2 OF 6 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2015 - 16 DISCLOSING TOTAL INCOME OF RS.14,08,590/ - AND HAVING SOURCES OF INCOME OF INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES . SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS DUE TO SUSPICIOUS SALE OF TRANSACTIONS IN SHARES AND THE ASSESSEE CLAIM ED EXEMPTION U/S 10(38) IN RESPECT OF LONG TERM CAPITAL GAINS AND PAID SECURITY TRANSACTION TAX (STT). ACCORDINGLY, NOTICES U/S 143(2) AND 142(1) OF IT ACT WERE ISSUED. T HE LD. AR OF THE ASSESSEE APPEAR ED AND ITA NO. 2683/ BANG/201 8 PAGE 3 OF 6 FURNISHED REQUISITE DETAILS AND CASE WAS DISCUSSED. THE AO FOUND THAT ASSESSEE HAS SOLD 12000 EQUITY SHARES OF GCM SECURITIES LTD., FOR A SALE CONSIDERATION OF RS.63,97,890/ - AND THE SHARES WERE ACQUIRED BY THE ASSESSEE ON 12/02/2013 FOR RS.2,40,00 0/ - AND THE ASSESSEE HAS CLAIMED EXEMPTION OF LONG - TERM CAPITAL GAINS ON SALE OF SHARES U/S 10(38) OF THE ACT. 4. THE AO OBSERVED THAT GENUINENESS OF THE TRANSACTION HAS TO BE VERIFIED AND FURTHER THE SHARES OF M/S. GCM SECURITIES LTD., WERE STOCK SPL IT DURING THE YEAR 2014 FROM FACE VALUE OF RS.10 TO RS.1. HENCE , THE NUMBER OF SHARES HELD BY THE ASSESSEE HAS INCREASED TO 120000 SHARES OF RS.1 PAID UP. THE THE LD. AR SUBMITTED THE COPY OF BANK ACCOUNT REFLECTING PURCHASE OF SHARES AND DEMAT ACCOUNT , C ONTRACT NOTE S ISSUED BY THE BROKERS. WHEREAS THE AO, AFTER MAKING INQUIRY MADE SPECIFIC OBSERVATION S ON INCREASE IN NUMBER OF SHARES AND SALE VALUE AT PARA.4 OF PAGES 3 TO 7 OF THE ASSESSMENT ORDER AND ALSO REL IED ON THE JUDICIAL DECISIONS AND FINALLY TRE AT ED THE SALE CONSIDERATION AS UNEXPLAINED CREDIT U/S 68 OF THE ACT AND WITHDRAWN EXEMPTION CLAIM ED U/S 10(38) OF THE ACT BY THE ASSESSEE . ASSESSED THE TAXABLE INCOME AT RS.75,66,480/ - AND PASSED THE ORDER U/S 143(3) OF THE ACT DATED 29/12/2017. 5 . AGGRIE VED BY THE ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT(A). IN APPELLATE ORDER, T HE CIT(A), AFTER CONSIDERING THE SUBMISSIONS AND THE GROUNDS OF APPEAL AND FINDINGS BY THE ASSESSING AUTHORITY AND RELI ED ON THE JUDICIAL DECISIONS AND CONFIRMED THE ACTION OF AO AND DISMISSED THE A PPEAL OF THE ASSESSEE. A GGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 6 . BEFORE US, THE LD. AR SUBMITTED THAT THE AO MADE FISHING ENQUIRIES AND LETTER U/S 133(6) OF WAS MADE AND COLLECTED ITA NO. 2683/ BANG/201 8 PAGE 4 OF 6 INFORMATION FROM BUYERS OF SHARES AND USED AGAINST THE ASSESSEE FOR MAKING ADDITION AND NO OPPORTUNITY WAS PROVIDED TO THE ASSESSEE TO EXAMINE THE PERSONS. THE LD. AR SUB STANTIATED WITH PAPER BOOK AND WRITTEN SUBMISSIONS BEFORE THE APPELLATE A UTHORITIES AND COPY OF SHARE APPLICATION, CONTRACT NOTES, LEDGER ACCOUNT FROM STOCK BR OKER, B ANK ACCOUNT AND D EMAT ACCOUNT AND LETTERS FILED BEFORE THE LOWER AUTHORITIES . FURTHER T HE LD. AR EMPHASIZED THAT THE ASSESSEE WAS PREVENTED FROM VERIFYING TH E FAC T S AND BENEFIT OF THE CROSS EXAMINATION OF PERSONS WHOSE AVERMENTS ARE DEALT BY THE AO WITHOUT PROVIDING AN OPPORTUNITY. THE AO HAS SOLELY RELIED ON THE INVESTIGATION REPORT OF DIRECTOR OF IN VESTIGATION, K OLKATA AND MADE ADDITION U/SEC.68 OF THE ACT AND P RAYED FOR AN OPPORTUNITY OF HEARING AND ALLOW THE APPEAL OF ASSESSEE. CONTRA, LEARNED DR SUPPORTED THE ORDER OF THE CIT(A) AND HIGHLY OPPOSED THE SUBMISSIONS AND MENTIONED THAT ADEQUATE OPPORTUNITY WAS PROVIDED TO THE ASSESSEE AND PRAYED FOR DISMISSAL OF THE APPEAL. 7 . WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. THE LD. AR SUBMITTED THAT THERE IS GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE IN THE ABSENCE OF CROSS EXAMINATION OF THE PERSON S WHERE AVERMENTS ARE UNILATERALLY CONSID ERED BY THE AO FOR ADDITION. THE LD. AR ALSO SUBSTANTIATED THE CASE BY FILING PAPER BOOK BEING VITAL FOR DECIDING THE CASE ON GENUINENESS OF THE TRANSACTION AND ALSO CERTIFIED THAT DOCUMENTS/PAPERS ARE AVAILABLE WITH THE LOWER AUTHORITIES. WHEREAS THE LEA RNED DR SUBMITTED THAT THE ASSESSEE HAS NOT CO - OPERATED IN SUBMITTING THE INFORMATION AND RELIED ON HON BLE SUPREME COURT DECISION IN K. C.TRIPATHI VS. STATE BANK OF INDIA AND OTHERS (1984 AIR 273) AND EMPHASIZED THAT NO OPPORTUNITY BE GRANTED. THE LD. AR ITA NO. 2683/ BANG/201 8 PAGE 5 OF 6 SUPPORTED THE CASE WI TH THE DECISION OF THE CO - ORDINATE BENCH OF TRIBUNAL ON SIMILAR ISSUE IN THE CASE OF SAWAN KUMAR MEHTA (HUF) IN ITA NO.1627/BANG/2018 DATED 05/10/2018 FOR ASSESSMENT YEAR 2014 - 15 WHERE THE MATTER WAS RESTORED TO THE FILE OF THE AO TO R E - ADJUDICATE THE ISSUE AFRESH AND PROVIDE PROPER OPPORTUNITY OF CROSS EXAMINATION. THE LD.DR COULD NOT CONTROVERT THE LD. AR SUBMISSION ON CROSS EXAMINATION AND CO - ORDINATE BENCH DECISION. WE FOUND STRENGTH IN THE SUBMISSIONS OF THE LD. AR SUPPORTED BY D OCUMENTARY EVIDENCE OF PURCHASE AND SALE OF SHARES AND DEMAT ACCOUNT AND BANK ACCOUNT DETAILS AND THE JUDICIAL DECISION . ACCORDINGLY WE, FOLLOW ING JUDICIAL PRECEDEN CE ARE OF THE SUBSTANTIVE OPINION THAT ON PRINCIPLES OF NATURAL JUSTICE, THE ASSESSEE SHOUL D BE PROVIDED ONE MORE OPPORTUNITY TO SUBSTANTIATE WITH DOCUMENTS AND THE CROSS EXAMINATION OF THE PERSONS AS PRAYED. ACCORDINGLY, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE ENTIRE DISPUTED ISSUE TO THE FILE OF AO AND ALLOW THE GROUNDS OF APPEAL OF T HE ASSESSEE FOR STATISTICAL PURPOSES. 8 . IN THE RESULT, THE ASSESSEE S APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST DECEMBER, 2018. S D/ - SD/ - (JASON P BOAZ) (PAVAN KUMAR GADALE) ACCOUNTANT MEMB ER JUDICIAL MEMBER PLACE : B EN GAL URU D A T E : 21 / 12 / 2018 SRINIVASULU, SPS COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) - 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE ITA NO. 2683/ BANG/201 8 PAGE 6 OF 6 BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE