Rupinder Singh Kohli (HUF), New Delhi V. ITO Ward -45(3), New Delhi

ITA 2765/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4573 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 01-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital Gains
• Section: 271(1)(c); 69A; 147; 69; 148

Judgement Text

, . . , IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH S.M.C, NEW DELHI , ! ! BEFORE MS. SUSHMA CHOWLA, VICE PRESIDENT $ / ITA NO.2765/DEL/2019 % & & / ASSESSMENT YEAR 2010-11 RUPINDER SINGH KOHLI (HUF), BF-32, TAGORE GARDEN, NEW DELHI-110027. PAN-AALHR0841M .......... '( /APPELLANT VS THE ITO, WARD-45(3), NEW DELHI. . )*'( / RESPONDENT '(+, / APPELLANT BY : MS. RANO JAIN, ADVOCATE & MS. MANSI JAIN, CA )*'(+, / RESPONDENT BY : SH. PRADEEP SINGH GAUTAM, SR.DR +-. / DATE OF HEARING : 14.01.2020 /0 +-. / DATE OF PRONOUNCEMENT: 21 .02.2020 1 / ORDER THE PRESENT APPEAL FILED BY ASSESSEE IS AGAINST ORD ER OF CIT(A)-15, DELHI DATED 01.02.2019 RELATING TO ASSESSMENT YEAR 2010-11 AGAINST THE ORDER PASSED UNDER SECTION 143(3)/147 OF THE INCOME -TAX ACT, 1961 (IN SHORT THE ACT). 2. THE PRELIMINARY ISSUE RAISED IN THE PRESENT APPE AL IS AGAINST THE INITIATION OF PROCEEDINGS UNDER SECTION 147/148 OF THE ACT BY THE ASSESSING OFFICER. ITA NO.2765/DEL/2019 ASSESSMENT YEAR 2010-11 2 3. BRIEFLY IN THE FACTS OF THE CASE, THE PROCEEDING S WERE INITIATED BY RECORDING REASONS FOR RE-OPENING THE ASSESSMENT BY THE ASSESSING OFFICER UNDER SECTION 147/148 OF THE ACT. THEREAFTER, NOTIC E UNDER SECTION 148 OF THE ACT WAS ISSUED TO THE ASSESSEE. THE ASSESSEE IN REPLY, FILED THE RETURN OF INCOME ON 21.04.2017 DECLARING TOTAL INCOME OF RS.3 ,00,466/-. THEREAFTER, THE ASSESSMENT WAS COMPLETED UNDER SECTION 143/147 OF THE ACT BY MAKING AN ADDITION OF RS.1,51,500/-. 4. THE CIT(A) CONFIRMED THE INITIATION OF RE-ASSESS MENT PROCEEDINGS UNDER SECTION 147/148 OF THE ACT. 5. THE FIRST ISSUE WHICH IS RAISED BY THE ASSESSEE IS AGAINST THE INVOKING OF JURISDICTION BY THE ASSESSING OFFICER UNDER SECT ION 147/148 OF THE ACT. 6. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT AFT ER RECORDING THE REASONS FOR REOPENING THE ASSESSMENT, THE ASSESSING OFFICER HAD TO SEEK APPROVAL FROM THE PR. COMMISSIONER OF INCOME TAX BE FORE THE JURISDICTION IS INVOKED BY THE ASSESSING OFFICER. OUR ATTENTION WAS DRAWN TO PAGE-25 OF THE PAPER BOOK WHEREIN, COPY OF REASONS RECORDED FOR IN ITIATING THE PROCEEDINGS UNDER SECTION 147/148 OF THE ACT IS PLACED. HE FURT HER POINTED OUT THAT THERE WAS NO APPLICATION OF MIND BY THE PCIT AND ON LY WORD APPROVE IS WRITTEN. IN THIS REGARD, RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT IN 391 ITR 11 (DELHI). 7. THE LD. DR FOR THE REVENUE POINTED OUT THAT THE ASSESSEE HAD SHOWN PROFIT ON DERIVATIVES WHICH WERE TAKEN UNDER SECTIO N 115BB OF THE ACT. HE ITA NO.2765/DEL/2019 ASSESSMENT YEAR 2010-11 3 FURTHER STATED THAT SUCH TRADING CAN EITHER BE ASSE SSED AS INCOME FROM BUSINESS OR INCOME FROM CAPITAL GAINS; BUT THE ASSE SSEE HAD NOT SHOWN THE SAME. IN SUCH CIRCUMSTANCES, THE ASSESSING OFFICER RECORDED REASONS FOR REOPENING THE ASSESSMENT, WHICH WERE BASED ON INVES TIGATION CARRIED OUT BY THE DEPARTMENT. HE PLACED RELIANCE ON THE RATIO LAI D BY THE LATEST DECISION OF HONBLE DELHI HIGH COURT IN SONIA GANDHI VS ACIT IN W.P.(C) 8482/2018, C.M. APPL.32580-32582/2018 DATED 10.09.2018. 8. THE LD. AR FOR THE ASSESSEE IN REJOINDER SUBMITT ED THAT THIS ISSUE IS NOT PRESSED BY HIM, BUT IF YOU LOOK AT THE REASONS RECORDED FOR RE-OPENING THE ASSESSMENT THEN THE BASIS WAS NON DECLARATION O F CAPITAL GAINS OF RS.1,51,500/- BOOKED BY THE ASSESSEE THROUGH THE TR ANSACTIONS ENTERED WITH NMCE. HOWEVER, THE ASSESSING OFFICER MADE THE ADDITION UNDER SECTION 69 OF THE ACT BEING ALLEGED TRADING ACTIVITY PROFIT AND SAME WAS TAXED @ 30% BY INVOKING THE PROVISIONS OF SECTION 115BBE OF THE ACT. 9. ON THE PERUSAL OF RECORD AND AFTER HEARING BOTH THE AUTHORIZED REPRESENTATIVES, THE JURISDICTIONAL ISSUE RAISED BY THE ASSESSEE IS AGAINST THE EXERCISE OF JURISDICTION U/S 147/148 OF THE ACT. T HE LD.AR FOR THE ASSESSEE INITIALLY RAISED OBJECTIONS AGAINST THE VIOLATION O F PROVISION OF SECTION 151 OF THE ACT. HOWEVER, DURING THE COURSE OF HEARING ITS ELF, HE RAISED AN ALTERNATE PLEA THAT AS AGAINST THE REASONS RECORDED FOR THE R E-OPENING OF ASSESSMENT I.E. NON-DECLARATION OF CAPITAL GAINS IN THE RETURN OF INCOME; FINALLY ADDITION HAS BEEN MADE U/S 69A OF THE ACT AND ALSO FOR VIOLA TION OF PROVISION OF SECTION 115AA OF THE ACT. IN OTHER WORDS, THE ADDI TION MADE IN THE HANDS OF ITA NO.2765/DEL/2019 ASSESSMENT YEAR 2010-11 4 THE ASSESSEE IS ON A GROUND OTHER THAN THE GROUND ON WHICH REASONS WERE RECORDED FOR RE-OPENING THE ASSESSMENT U/S 147 OF T HE ACT. 10. THE HONBLE BOMBAY HIGH COURT IN CIT VS JET AIR WAYS (I) LTD. [2011] 331 ITR 236 (BOM.) HAVE LAID DOWN THE PRINCIPLE THA T IN CASE NO ADDITION IS MADE ON ACCOUNT OF THE REASONS RECORDED FOR RE-OPEN ING THE ASSESSMENT THEN THE ADDITION MADE ON ANY OTHER ACCOUNT IS NOT SUSTAINABLE. 11. IN THE FACTS OF THE PRESENT CASE ADMITTEDLY THE ASSESSING OFFICER HAD RECORDED REASONS FOR RE-OPENING THE ASSESSMENT, COP Y OF WHICH IS PLACED AT PAGE 25 OF THE PAPER BOOK AND HE NOTED AS UNDER:- ON PERUSAL OF ITD IT HAS BEEN FOUND THAT ASSESSEE HAS FILED ITR ON 25.03.2011 FOR THE A.Y. 2010-11 DECLARING INCOME OF RS.3,00,466/-. THE DECLARED INCOME FOR THE YEAR UNDER CONSIDERATIO N CONSISTS OF ONLY OTHER SOURCES INCOME TO THE TUNE OF RS.3,00,466/- . IT HAS BEEN FURTHER SEEN THAT THE ASSESSEE HAS NOT DECLARED THE CAPITAL GAINS OF RS.1,51,500/- BOOKED BY THE ASSESSEE THROUGH THE TR ANSACTIONS ENTERED WITH NMCE. 12. THE SATISFACTION THUS WAS ON ACCOUNT OF ESCAPEM ENT OF INCOME FROM ASSESSMENT OF CAPITAL GAINS OF RS.1,51,500/-. THE ADDITION UNDER THE SAID HEAD OF INCOME HAS NOT BEEN IN THE CASE OF THE ASSE SSEE. THE ASSESSING OFFICER IN FINAL ANALYSIS VIDE PARA 11 OBSERVED AS UNDER:- 11. IN VIEW OF ABOVE NARRATED FACTS AND THE INFORM ATION AVAILABLE ON RECORDS, THE INCOME OF RS.1,51,500/- (ALLEGED PROFI T EARNED FROM COMMODITY TRADING) IS ADDED BACK TO THE INCOME OF A SSESSEE U/S 69A OF THE INCOME TAX ACT FOR THE A.Y. 2010-11. THE INCOM E AMOUNTING TO RS.1,51,500/- IS TAXED @ 30% BY INVOKING PROVISIONS OF 115BBE OF THE ACT. FURTHER, I AM OF THE VIEW THAT THE ASSESSEE H AS FURNISHED INACCURATE PARTICULARS OF HIS INCOME FOR THE A.Y. 2010-11, PENALTY PROCEEDINGS U/S 271(1)(C) ARE BEING INITIATED SEPAR ATELY. ITA NO.2765/DEL/2019 ASSESSMENT YEAR 2010-11 5 13. IN OTHER WORDS, THE ADDITION WAS MADE U/S 69A O F THE ACT AND THE INCOME WAS TAXED AT THE RATE OF 30% BY INVOKING SEC TION 115BBE OF THE ACT. IN THE ABSENCE OF ANY ADDITION BEING MADE ON ACCOUN T OF THE REASONS RECORDED FOR RE-OPENING THE ASSESSMENT, OTHER ADDIT ION MADE IN THE HANDS OF THE ASSESSEE CANNOT BE SUSTAINED. ACCORDINGLY, THE SAME IS DELETED. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST FEBRUARY, 2020. SD/- (SUSHMA CHOWLA) ! / VICE PRESIDENT / DATED : 21 ST FEBRUARY, 2020 * AMIT KUMAR * 1+)%-2343-5 COPY OF THE ORDER IS FORWARDED TO : 1. '( / THE APPELLANT 2. )*'( / THE RESPONDENT 3. 6- 7 8 / THE CIT(A) 4. 9 6- / THE PR. CIT 5. 6. 3:;)%-% < < / DR, ITAT, DELHI ;=&>5 GUARD FILE. 1 / BY ORDER, *3-)%- //TRUE COPY// ? @ABC , < ASSISTANT REGISTRAR, ITAT, DELHI