Shri Mukesh Singhvi, JODHPUR V. ACIT, JODHPUR

ITA 296/JODH/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7983 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-11-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 03-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBASH CHANDRA
• Assessee Lawyers: U C JAIN
• Keywords: Cost of acquisition
• Section: 143(3); 153A; 234B; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 296/JU/2011 ASSESSMENT YEAR : 2005-06 SHRI MUKESH SINGHVI, VS. THE ACIT, CENTRAL CIRCLE -1, JODHPUR JODHPUR PAN NO. AKIPS3853K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI U.C. JAIN RESPONDENT BY : SHRI SUBASH CHANDRA DATE OF HEARING : 23.11.2012 DATE OF PRONOUNCEMENT : ORDER PER N.K.SAINI, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 17.6.2011 OF CIT(A), JAIPUR. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEA L:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE ID. C1T(A) OUGHT TO HAVE CANCELLED THE ASSESSMENT ORDER PASSED BY ID AO U/S 143(3) READ WITH SECTION 153 A IN THE INDIVIDUAL NAME OF T HE APPELLANT PARTICULARLY WHEN THE WARRANT OF AUTHORIZATION TO S EARCH WAS ISSUED IN THE JOINT NAMES OF SEVERAL PERSONS. 2 2] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ID. CIT(A) IN CONFIRMING THE ASSESSMENT ORDER PASSED BY THE AO PARTICULARLY WHEN NO MATERIAL WAS FOUND AS A RESULT OF SEARCH WHICH J USTIFY ANY DE NOVO ASSESSMENT. 3] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE ID. CIT(A) IN CONFIRMING THE ADDITION OF RS. 3,02,026/- CLAIME D BY THE ASSESSEE AS LONG TERM CAPITAL GAIN FROM SALE OF SHARES AS INCOM E FROM OTHER SOURCES PARTICULARLY WHEN NO MATERIAL WAS FOUND AS A RESULT OF SEARCH WHICH JUSTIFY SUCH ADDITION. 4] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE ID. CIT(A) ERRED IN NOT FOLLOWING THE BINDING DECISION OF THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, JODHPUR BENCH BY WRONGLY STATIN G THAT THE DECISION CITED ARE UNDER SECTION 158BC PARTICULARLY WHEN ALL THE DECISIONS CITED WERE THE DECISIONS RENDERED U/S 153A OR U/S 153C. 5] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE ID. CIT(A) ERRED IN UPHOLDING THE CHARGING OF INTEREST U/S 234A AND 234B. 6] THAT THE PETITIONER MAY KINDLY BE PERMITTED TO RAISE ANY ADDITIONAL OR ALTERNATIVE GROUND AT OR BEFORE THE TIME OF HEAR ING. 7] THE PETITIONER PRAYS FOR JUSTICE & RELIEF. 3. GROUND NOS, 1 AND 2 WERE NOT PRESSED, AS SUCH, T HESE ARE DISMISSED AS NOT PRESSED. 4. GROUND NOS. 6 AND 7 ARE GENERAL IN NATURE, SO DO NOT REQUIRE ANY COMMENTS ON OUR PART. 3 5. GROUND NOS. 3 AND 4 RELATES TO THE CONFIRMATION OF ADDITION OF RS.3,02,026/- AS INCOME FROM OTHER SOURCES WHICH WA S CLAIMED BY THE ASSESSEE AS LONG TERM CAPITAL GAIN. 6. THE FACTS RELATED TO THE ABOVE ISSUE IN BRIEF AR E THAT A SEARCH U/S 132 OF THE ACT WAS CONDUCTED IN THIS CASE OF 25.3.2008 TO 27.3.2008. SUBSEQUENTLY, NOTICE U/S 153A OF THE ACT WAS ISSUED ON 12.9.2008. IN RESPONSE TO THAT NOTICE, RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 30.1.2009 DECLARING AN INCOME OF RS. 4,38,805/-. D URING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT THE COMPUTATION OF INCOME REVEALED THAT THE ASSESSEE HAD CLAIMED CA PITAL GAIN OF RS. 3,02,026/- AS PER FOLLOWING DETAILS:- ON SALE OF SHARES SALE CONSIDERATION (19-06-2004) RS. 3 ,53,786/- LESS:- COST OF ACQUISITION (03-04-2004) RS. 51 .760/- RS.3,02,026/- 7. THE ASSESSING OFFICER ASKED THE ASSESSEE TO GIVE EVIDENCE IN SUPPORT OF HIS CLAIM. SINCE NO DOCUMENTARY EVIDENCE WAS PR ODUCED BY THE ASSESSEE, THE AMOUNT OF RS. 3,53,786/- WAS TREATED AS INCOME FROM OTHER SOURCES AND THE CLAIM OF EXPENDITURE INCURRED AMOUNTING TO RS. 51,760/- HAD ALSO BEEN DISALLOWED. ACCORDINGLY, AN ADDITION OF RS. 3 ,53,786/-WAS MADE. 8. THE ASSESSEE CARRIED THE MATTER TO THE LD CIT(A ) AND SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER WAS BAD IN LAW AND BAD IN FACTS DUE TO FOLLOWING:- THAT THE SHORT TERM CAPITAL GAIN ON SALE OF SHARES IS DULY RECORDED IN THE BOOKS OF ACCOUNTS AND DECLARED IN T HE REGULAR RETURN OF INCOME FILED PRIOR TO SEARCH. NO MATERIAL 4 WAS FOUND AND SEIZED IN SEARCH WHICH SUGGESTS THAT THE SHORT TERM CAPITAL GAIN IS INGENUINE. THEREFORE, SUCH ADD ITION IS DEHORS THE MATERIAL FOUND IN THE SEARCH AND PERTAIN S TO REGULAR ASSESSMENT WHICH WAS NOT PENDING AT THE TIM E OF INITIATION OF SEARCH. THE ASSESSMENT U/S 153A IS N OT A DENOVO ASSESSMENT BUT IS MADE AFTER SEARCH IS CONDU CTED IN ORDER TO ASSESS THE INCOME ON THE BASIS OF EVIDENCE S COLLECTED AT THE TIME OF SEARCH. AS SUCH ALL THE IS SUES PERTAINING TO REGULAR ASSESSMENT WHICH WERE COMPLET E AT THE TIME OF INITIATION OF SEARCH CANNOT BE CONSIDERED I N THE ASSESSMENT MADE U/S 153 A. HENCE, THE ADDITION OF R S. 3,53,786/- SO MADE CONTRARY TO SCOPE OF SEC 153A IS BAD IN LAW AND DESERVES TO BE DELETED. 9. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LA WS:- SUNCITY ALLOYS (P) LTD. V/S. ACIT (2009) 124 TTJ (J D) 674 LMJ INTERNATIONAL LTD. V/S. DCIT (2008) 119 TTJ (KO L) 214 ACIT V/S. RUPESH BHOLIDAS PATEL IN ITA NO. 2390 TO 2394 /AHD./2007 ORDER DATED 25-01-2008. ANIL KUMAR BHATIA V/S. ACIT IN ITA NO. 2660 TO 2665 /DEL/2009 ORDER DATED 01.01.2010 10. THE LD CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT IN THE PROCEEDING U/S 153 A OF THE AC T, THE ASSESSING OFFICER WAS REQUIRED TO DETERMINE THE TOTAL INCOME OF THE A SSESSEE INCLUDING THE UNDISCLOSED INCOME AND THAT THE PROCEEDINGS U/S 153 A WAS AKIN TO PROCEEDINGS U/S 148/147 EXCEPT THAT THE REASONS WER E NOT REQUIRED TO BE RECORDED IN THE PROCEEDINGS U/S 153A BEING CONTRA-D ISTINCT FROM PROCEEDINGS U/S 147/148 OF THE ACT WHEREAS THE REAS ONS ARE REQUIRED TO BE RECORDED REGARDING INCOME ESCAPED ASSESSMENT. THE LD CIT(A) OBSERVED 5 THAT THE ASSESSEE HAD SHOWN SHORT TERM CAPITAL GAIN OF RS. 3,02,026/- IN THE RETURN OF INCOME AND PAID TAX AT THE SPECIAL RATE OF 10% U/S 111A, HOWEVER, INSPITE OF BEING SPECIFICALLY ASKED TO FUR NISH THE EVIDENCE, THE ASSESSEE AGREED TO THE ADDITION, THEREFORE, THERE W AS NO REASON FOR GRIEVANCE BY THE ASSESSEE SINCE HE HAD AGREED TO TREAT THE CA PITAL SHOWN AS NORMAL INCOME. THE LD CIT(A) FURTHER OBSERVED THAT THE AS SESSING OFFICER HAD ADDED THE COST OF ACQUISITION ALSO AND THEREBY CONS IDERED THE ENTIRE CLAIM OF SALE PROCEEDS AS INCOME WHICH WAS NOT JUSTIFIED. H E, THEREFORE, CONFIRMED THE ADDITION OF RS. 3,02,026/- INSTEAD OF RS. 3,53, 786/- MADE BY THE ASSESSING OFFICER. NOW THE ASSESSEE IS IN APPEAL. 11. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO EVIDENCE OR DOCUMENT WAS FOUND DURING THE COURSE OF SEARCH AND THE INCOME WAS SHOWN AS LONG TERM CAPITAL GAIN BY THE ASSESSEE IN THE RE GULAR RETURN OF INCOME EARLIER FILED. IT WAS FURTHER STATED THAT THE ASSE SSEE AGREED TO ADDITION AND SURRENDERED ON THE CONTENTION THAT NO PENALTY WILL BE LEVIED. HOWEVER, THE ASSESSING OFFICER INITIATED THE PENALTY PROCEED INGS, THEREFORE, THE LD CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE ASSESSEE PARTICULARLY WHEN THE ASSESSEE DISCLOSED THIS INCOM E IN REGULAR RETURN OF INCOME. HE FURTHER SUBMITTED THAT THE LD CIT(A) ON THE ONE HAND ACCEPTED THE EXPENSES RELATING TO THE TRANSACTION AS GENUIN E ON THE OTHER HAND DID NOT ACCEPT THE CLAIM OF THE ASSESSEE AS LONG TERM C APITAL GAIN. 12. IN HIS RIVAL SUBMISSIONS, THE LD. DR STRONGLY S UPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT TH E ASSESSEE DID NOT FILE ANY EVIDENCE IN SPITE OF VARIOUS OPPORTUNITIES GIVE N BY THE ASSESSING 6 OFFICER, THEREFORE, THE ADDITION WAS RIGHTLY MADE B Y THE ASSESSING OFFICER AND SUSTAINED BY THE LD CIT(A). 13. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIALS AVAILABLE ON RECORD. IN THE PRESENT CASE, THE CLAIM OF THE ASSESSEE IS THAT THIS INCOME WAS DISCL OSED IN THE REGULAR BOOKS OF ACCOUNT, COPIES OF WHICH IS PLACED AT PAGE NO.19 OF THE ASSESSEES COMPILATION. IT WAS CLAIMED THAT THE ASSESSING OFF ICER ACCEPTED THE INCOME AS LONG TERM CAPITAL GAIN IN THE REGULAR ASSESSMEN T OF INCOME U/S 143(3) OF THE ACT, SO THERE WAS NO OCCASION TO TREAT THE SAME AS INCOME FROM OTHER SOURCES WHILE FRAMING THE ASSESSMENT U/S 153A OF TH E ACT. WE, THEREFORE, CONSIDERING THE CONTRADICTORY STAND TAKEN BY THE AS SESSING OFFICER DEEM IT FIT AND APPROPRIATE TO REMAND THIS ISSUE BACK TO TH E FILE OF THE ASSESSING OFFICER TO DECIDE THE SAME AFRESH IN ACCORDANCE WIT H LAW AFTER VERIFYING THE AFORESAID FACT FROM HIS RECORD. 14. THE NEXT ISSUE VIDE GROUND NO.5 RELATED TO CHAR GING OF INTEREST U/S 234A AND 234B OF THE ACT. THIS WAS A CONTENTION OF BOTH THE PARTIES THAT IT IS CONSEQUENTIAL IN NATURE, WE ORDER ACCORDINGLY. 15. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON _________ ) (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : DECEMBER, 2012 RKK 7 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR