JAIPRAKASH GUPTA HUF, MUMBAI V. ITO 14(2)(2),

ITA 2803/MUM/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93072 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 04-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 12-05-2015
• Court: TRIBUNAL
• Department Lawyers: NEELIMA V NADKARNI
• Assessee Lawyers: HARISH AGARWAL
• Keywords: Business income
• Section: 133(6); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO.2803/M/2015 (AY:2007 - 2008 ) JAIPRAKASH GUPTA HUF, 404 - A, WAGHWADI, KALBADEVI, MUMBAI - 2. / VS. ITO WARD 14(2)(2), MUMBAI. ./ PAN : AACHJ6146G ( / APPELLANT) .. ( / RESPONDENT ) I.T.A. NO.2804/M/2015 (AY:2007 - 2008 ) JAIPRAKASH GUPTA, 404 - A, WAGHWADI, KALBADEVI, MUMBAI - 2. / VS. ITO WARD 14(2)(2), MUMBAI. ./ PAN : AACPG7723M ( / APPELLANT) .. ( / RESPONDENT ) / ASSESSEE BY : SHRI HARISH AGARWAL, AR / REVENUE BY : MS. NEELIMA V. NADKARNI, DR / DATE OF HEARING : 30.06 .2015 / DATE OF PRONOUNCEMENT : 07 .07.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS UNDER CONSIDERATION. ITA NO.2803/M/2015 IS FILED BY THE ASSESSEE IN THE CASE OF JAIPRAKASH GUPTA ( HUF ) AND ITA NO.2804/M/2015 IS FILED BY THE ASSESSEE IN THE CASE OF JAIPRAKASH GUPTA (INDIVIDUAL). SINCE, THE ISSUES RAISED IN BOTH THE APPEALS ARE IDENTICAL, THEREFORE, FOR THE SAKE OF CONVENIENCE, THEY ARE CLUBBED, HEARD COMBINEDLY AND DISPOSED OF IN THIS CONSOLIDATED ORDER. APPEAL WISE ADJUDIC ATION IS GIVEN IN THE FOLLOWING PARAS OF THIS ORDER. GROUNDS OF APPEAL IN ITA NO.2803/M/2015 READ AS UNDER: 1. CIT (A) ERRED IN OBSERVING THAT TRANSACTION OF SPECULATION INCOME AND SHORT TERM CAPITAL GAIN ARE NOT GENUINE. 2. CIT (A) ALSO ERRED IN OBS ERVING THAT SALES PROCEEDS OF SHARES OF CRAZY INFOTECH RS. 2,28,676/ - SHALL BE TAKEN AS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. HE ERRED IN NOT DEDUCTING RS. 31,618/ - COST OF THOSE SHARES THOUGH REFLECTED IN BANK STATEMENTS PRODUCED BEFORE HIM. 2 3 . IN VIEW OF THE ABOVE TREATMENT, THE SHORT TERM CAPITAL GAIN WAS CONFIRMED BY THE CIT (A) AS INCOME FROM OTHER SOURCES AND TAXED ACCORDINGLY AGAINST MY CLAIM TO TREAT THE SAME AS INCOME FROM SHORT TERM CAPITAL GAIN WITHOUT CONSIDERING MY SUBMISSIONS DURIN G THE HEARING OF APPEAL. GROUNDS OF APPEAL IN ITA NO.2804 /M/2015 READ AS UNDER: 1. CIT (A) ERRED IN OBSERVING THAT PAYMENTS OF RS. 4,144/ - AND ADJUSTMENT OF RS. 29,566/ - ARE FICTITIOUS WITHOUT GIVING ANY REASON. 2. CIT (A) ALSO ERRED IN OBSERVING THAT SALES PROCEEDS OF SHARES OF CRAZY INFOTECH RS. 2,45,658/ - SHALL BE TAKEN AS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. HE ERRED IN NOT DEDUCTING RS. 33,710/ - COST OF THOSE SHARES THOUGH REFLECTED IN BANK STATEMENTS PRODUCED BEFORE HIM. 3. IN VIEW OF THE ABOV E TREATMENT THE SHORT TERM CAPITAL GAIN WAS CONFIRMED BY THE CIT (A) AS INCOME FROM OTHER SOURCES AND TAXED ACCORDINGLY AGAINST MY CLAIM TO TREAT THE SAME AS INCOME FROM SHORT TERM CAPITAL GAIN WITHOUT CONSIDERING MY SUBMISSIONS DURING THE HEARING OF APPEA L. 4. CIT (A) ALSO ERRED IN MENTIONING RS. 2,59,601/ - AS BUSINESS INCOME. CORRECT BUSINESS INCOME IS RS. 2,93,389/ - . IT APPEARS THAT OUT OF THIS AMOUNT, CIT HAS DEDUCTED LOSS FROM HOUSE PROPERTY INCOME RS. 38,328/ - . 2. IN BOTH THE APPEALS, THE MAIN ISSUE RAISED RELATING TO THE SHORT TERM CAPITAL GAINS IS COMMON APART FROM OTHER MINOR ISSUES. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS IS A CASE OF PURCHASE OF SHARES OF CRAZY INFOTECH, WHICH WAS SUBSEQUENTLY SOLD AND EARNED SHORT TERM CA PITAL GAINS BY THE ASSESSEES. IN THE ASSESSMENT PROCEEDINGS, AO DOUBTED THE SAID TRANSACTIONS OF PURCHASE AND SALE OF SHARES ON THE GROUND THAT THEY WERE OFF - MARKED TRANSACTIONS. RELYING ON PAPER BOOK FILED BEFORE THE TRIBUNAL, LD COUNSEL FOR THE ASSESSE E SUBMITTED THAT THIS MATTER HAS TO BE REMANDED IN BOTH THE APPEALS AS THE ASSESSING OFFICER HAS FAILED TO CONDUCT BASE INQUIRIES WITH THE BROKERS M/S. ALLIANCE INTERMEDIARIES & NETWORK PVT LTD, THE BROKER WHO ISSUED THE CONTRACT NOTES, COPY OF WHICH IS PL ACED ON TO THE RECORD. HE ALSO FURNISHED THE BANK COPIES IN SUPPORT OF THE CLAIM. LD COUNSEL FURTHER FILED CERTAIN JUDGMENTS TO SUPPORT THE CASE OF THE ASSESSEE. 3. ON THE OTHER HAND, LD DR SUBMITTED THAT THE CRAZY INFOTECH STOCK IS ONE OF THE PENNY S TOC KS AND THEIR PURCHASE AND SALE IS AIMED AT CONVERSION OF UNACCOUNTED MONEY. IT IS THE CASE WHERE THE BROKERS WERE NOT EXAMINED BY THE AO AS THEY ARE NOT AVAILABLE TO THE DEPARTMENT. 4. ON HEARING BOTH THE PARTIES AND ON PERUSAL OF THE RELEVANT MATERIAL PL ACED ON TO THE RECORD, I FIND THE ASSESSING AUTHORITIES HAVE DECIDED THE ISSUE BASING ON THE PAPERS PLACED BEFORE THEM INSTEAD OF CONDUCTING INQUIRY IN THE MATTER. ASSESSING OFFICER SHOULD HAVE TAKEN INITIATION IN EXAMINING THE BROKER IN QUESTION BY ISSUI NG 3 SUMMONS U/S 131 OR LETTERS U/S 133(6) OF THE ACT. IN MY OPINION, THESE ARE THE FIT CASES FOR BRINGING MORE FACTS ON TO THE RECORDS. THEREFORE, I PROCEED TO REMAND THE ISSUE TO THE FILE OF THE AO FOR ONE MORE ROUND OF THE ASSESSMENT PROCEEDINGS. ASSES SING OFFICER IS DIRECTED TO UNDERTAKE REQUISITE AND NECESSARY INQUIRIES IF THE ASSESSEE, THE BROKERS, THE SCRIPS INVOLVED ETC BEFORE COMING TO THE CONCLUSIONS. ACCORDINGLY, ALL THE GROUNDS RAISED BY THE ASSESSEES IN BOTH THE APPEALS ARE ALLOWED FOR STATIS TICAL PURPOSES. 5. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH JULY, 2015. SD/ - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER MUMBAI ; 7 .7 .2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI