R.Jayanthi, CHENNAI V. ACIT Non Corp. Circle 4(1), CHENNAI

ITA 2822/CHNY/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5312 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 23-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Keywords: Speculation loss

Judgement Text

, / SMC , IN THE INCOME TAX APPELLATE TRIBUNAL B / SMC BENCH: CHENNAI , ! , ' | BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER ./ ITA NOS.2821 & 2822/CHNY/2017 /ASSESSMENT YEARS: 2009-10 & 2010-11 SMT. R.JAYANTHI, C/O.VICTOR GRACE & CO., CHARTERED ACCOUNTANTS, SPENCER PLAZA, O-704, 7 TH FLOOR, PHASE-I, 769, ANNA SALAI, CHENNAI-600 002. [PAN: AAFPJ 8255 P ] VS. THE ASST. COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE-4(1), CHENNAI. ( ' /APPELLANT) ( ()' /RESPONDENT) ./ ITA NOS.2823 & 2824/CHNY/2017 /ASSESSMENT YEARS: 2009-10 & 2010-11 SHRI JUMARMAL OSTWAL, C/O. VICTOR GRACE & CO., CHARTERED ACCOUNTANTS, SPENCER PLAZA, O-704, 7 TH FLOOR, PHASE-I, 769, ANNA SALAI, CHENNAI-600 002. [PAN NO. AAAPO 2073 P] VS. THE ASST. COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE-4(1), CHENNAI. ( ' /APPELLANT) ( ()' /RESPONDENT) ' * / APPELLANT BY : NONE ()' * /RESPONDENT BY : MR.B.SAGADEVAN, JCIT * /DATE OF HEARING : 17.04.2018 * / DATE OF PRONOUNCEMENT : 17.04.2018 ITA NOS.2821 TO 2824/CHNY/2017 :- 2 -: / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : ITA NOS.2821 & 2822/CHNY/2017 ARE THE APPEALS FILE D BY THE ASSESSEE SMT. R.JAYANTHI, AGAINST THE ORDER OF COMM ISSIONER OF INCOME TAX (APPEALS)-5, CHENNAI, IN ITA NO.194/CIT(A)-5/20 16-17 DATED 31.10.2017 & ITA NO.191/CIT(A)-5/2016-17 DATED 31.1 0.2017 FOR THE AYS 2009-10 & 2010-11 RESPECTIVELY. 2. ITA NOS.2823 & 2824/CHNY/2017 ARE THE APPEALS FI LED BY THE ASSESSEE SHRI JUMARMAL OSTWAL, AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-5, CHENNAI, IN ITA NO.193/CIT( A)-5/2016-17 DATED 31.10.2017 & ITA NO.195/CIT(A)-5/2016-17 DATED 31.1 0.2017 FOR THE AYS 2009-10 & 2010-11 RESPECTIVELY. 3. SHRI B.SAGADEVAN, JCIT, REPRESENTED ON BEHALF OF THE REVENUE AND NONE REPRESENTED ON BEHALF OF THE ASSESSEE. 4. AT THE TIME OF HEARING, PETITIONS FOR ADJOURNMEN T HAD BEEN FILED STATING THAT THE COUNSEL OF THE ASSESSEE WAS CURREN TLY OUTSIDE THE COUNTRY DUE TO A FAMILY ENGAGEMENT. THE ADJOURNMENT APPLIC ATIONS FILED ARE NOT SIGNED BY THE COUNSEL OF THE ASSESSEES. FURTHER, A NOTICE FOR HEARING WAS ISSUED BY RPAD AND SERVED AS EARLY AS FIRST WEEK OF MARCH, 2018. ITA NOS.2821 TO 2824/CHNY/2017 :- 3 -: CONSEQUENTLY, THE ADJOURNMENT LETTERS FILED IN BOTH THE CASES STAND REJECTED AND THE APPEALS ARE DISPOSED OFF ON MERITS . 5. IT WAS SUBMITTED BY THE LD.DR THAT THE ASSESSEES ARE INDIVIDUALS WHO HAD CLAIMED LOSS IN RESPECT OF THE PURCHASE AND SALE OF SHARES IN THE FORWARD OPTIONS. IT WAS A SUBMISSION THAT A PART O F THE LOSS WAS BOOKED THROUGH CLIENT CODE MODIFICATIONS. THE LD.DR DREW MY ATTENTION TO THE ASSESSMENT ORDER PARA NO.7 TO EXPLAIN, WHAT WAS THE NATURE OF THE CLIENT CODE MODIFICATIONS AND HOW THE SO-CALLED SHAM TRANS ACTION IS DONE. AFTER PERUSAL OF THE ASSESSMENT ORDER, THE LD.DR WAS ASKE D TO SPECIFY AS TO WHAT WAS THE CLIENT CODE OF THE ASSESSEE AND WHICH WAS THE CLIENT CODE WHICH WAS MODIFIED SO AS TO GENERATE THE LOSS IN TH E HANDS OF THE ASSESSEES. IT WAS SUBMITTED BY THE LD.DR THAT THESE DETAILS HAVE NOT BEEN PRODUCED BY THE ASSESSEE. IT WAS A SUBMISSION THAT IN THE COURSE OF THE ASSESSMENT, THE LD.AR OF THE ASSESSEE HAD SPECIFICA LLY MENTIONED THAT THE CLIENT CODE MODIFICATIONS HAD TAKEN PLACE AT THE BR OKERS END AND THE ASSESSEE HAD NO KNOWLEDGE OF IT. ON A FURTHER QUER Y, AS TO WHAT WAS THE TOTAL TRANSACTIONS DONE BY THE ASSESSEE AND HOW MAN Y OF THE SAID TRANSACTIONS RESULTED IN THE CLIENT CODE MODIFICATI ONS BEING DONE AND OUT OF THE SAME, HOW MANY SHOWED A PROFIT FIGURE AND HO W MANY SHOWED A LOSS FIGURE. TO THIS ALSO, IT WAS A SUBMISSION THAT NONE OF THE DETAILS HAVE BEEN PRODUCED BY THE ASSESSEE BUT THE ASSESSEE HAS ONLY SAID THAT THE CLIENT CODE MODIFICATIONS HAVING BEEN DONE BY THE B ROKER, ONLY BROKER CAN ITA NOS.2821 TO 2824/CHNY/2017 :- 4 -: EXPLAIN. IT WAS A PRAYER THAT THE ORDER OF THE LD. CIT(A) WAS LIABLE TO BE SUSTAINED. 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. 7. A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT ALL THE FACTS REQUIRED FOR ADJUDICATING THE ISSUE ARE NOT AVAILAB LE. ALL THAT IS AVAILABLE IN THE ASSESSMENT ORDER IS THE MODUS OPERANDI. THERE IS NO IDENTIFICATION AS TO WHICH IS THE CLIENT CODE MODIFICATIONS WHICH HAV E BEEN MODIFIED TO WHICH TRANSACTIONS MODIFICATIONS HAVE BEEN DONE AND WHEN SUCH MODIFICATIONS HAVE BEEN DONE AND WHETHER SUCH TRANS ACTIONS GAVE RISE TO ANY SPECULATIVE LOSS AS PER SEC.73 OR NOT. THIS BE ING SO, ALSO TAKING INTO CONSIDERATION THE FACT THAT THE ASSESSEE IN HIS REP LY TO THE AO VIDE THE LD.ARS LETTER DATED 08.12.2016 HAS CATEGORICALLY S TATED THAT THE CLIENT CODE MODIFICATIONS WAS AT THE BROKERS END AND THE ASSESSEE HAD NO KNOWLEDGE OF IT AND THAT ONLY BROKER CAN EXPLAIN TH E CLIENT CODE MODIFICATIONS, THE ISSUES IN THESE APPEALS ARE REST ORED TO THE FILE OF THE AO FOR RE-ADJUDICATION AFTER GRANTING THE ASSESSEE ADE QUATE OPPORTUNITY TO SUBSTANTIATE ITS CASE. THE ASSESSEE SHALL PRODUCE ALL SUCH EVIDENCES INCLUDING PRODUCING BROKERS WHO HAVE DONE THE CLIEN T CODE MODIFICATIONS, IF NECESSARY, FOR THE PURPOSE OF SUBSTANTIATING THE IR CLAIM OF LOSS, IF SO REQUIRED BY THE AO. ITA NOS.2821 TO 2824/CHNY/2017 :- 5 -: 8. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE ES ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON APRIL 17, 20 18, AT CHENNAI. SD/- ( ) (GEORGE MATHAN) ! /JUDICIAL MEMBER /CHENNAI, 2 /DATED: APRIL 17, 2018. TLN * (34 54 /COPY TO: 1. ' /APPELLANT 4. 6 /CIT 2. ()' /RESPONDENT 5. 4 ( /DR 3. 6 ( ) /CIT(A) 6. /GF