Kumari Ashmita K. Joshi, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-4(2), RAJKOT-GUJARAT

ITA 31/RJT/2013

• Counselvise Citation: 3124914 RSA 2013
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 12-08-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 05-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR DR U
• Assessee Lawyers: J C RANPURA CA U
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT . . R . . BEFORE SHRI T. K. SHARMA JM AND SHRI D. K. SRIVASTAVA AM ITA NO. 31 /RJT/201 3 I[ [ / ASSESSMENT YEAR : 2008 - 09 KUMARI ASHMITA K. JOSHI, JADESHWAR BHUVAN, 9, JAYRAJ PLOT, RAJKOT PAN : AAMPJ 7403 J ( / APPELLANT) INCOME - TAX OFFICER, WARD - 4(2), RAJKOT / RESPONDENT I[ U / ASSESSEE BY SHRI J C RANPURA, CA U / REVENUE BY SHRI AVINASH KUMAR, DR U / DATE OF HEARING 1 2. 0 8. 2013 U / DATE OF PRONOUNCEMENT 14 . 0 8 . 2013 / ORDER . . , R / T. K. SH ARMA, J. M. : THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 21 .11.2012 OF CIT (A) - III, RAJKOT FOR THE ASSESSMENT YEARS 200 8 - 0 9. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR UNDER APPEAL, SHE FILED THE RETURN OF INCOME ON 29.07.2008 DECLARING TOTAL INCOME AT RS.1,16,810/ - . THE ASSESSING OFFICER FRAMED ASSESSMENT U/S 143(3) OF THE INCOME - TAX ACT , WHEREIN HE MADE ADDITION OF RS.27,03,415/ - U/S 69 OF THE ACT ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS (IN CAS H AND THROUGH CHEQUES) IN THE BANK ACCOUNTS HELD WITH PUNJAB NATIONAL BANK. ON APPEAL, IN THE IMPUGNED ORDER, THE LD CIT(A) HAS SUSTAINED THE ADDITION OF RS.7,38,350/ - OUT OF TOTAL ADDITION OF RS.27,03,145/ - . APART FROM THIS, IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER MADE AN ADDITION OF RS.90,000/ - ON ACCOUNT OF ESTIMATION OF SHORT TERM CAPITAL GAIN @ 10% BY ALLEGING THAT THE ASSESSEE HAS NOT SHOWN ANY CAPITAL GAIN OR LOSS IN THE RETURN OF INCOME. ON APPEAL, IN THE IMPUGNED ORDER, THE LD CIT(A) HAS CONFIRMED THE SAID ADDITION FOR THE DETAILED REASON GIVEN IN PARAGRAPH 4.1 ON PAGE NO.22 OF THE ORDER. AGGRIEVED 31 - RJT - 2013 - KUMARI ASHMITA K JOSHI 2 WITH THE ORDER OF LD CIT( A ), THE ASSESSEE IS NOW IN APPEAL BEFORE THIS TRIBUNAL ON THE FOLLOWING GROUNDS: - 1.0 THE GROUNDS OF APPEAL MENTIONE D HEREUNDER ARE WITHOUT PREJUDICE TO ONE ANOTHER. 2.0 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - III, RAJKOT [HEREINAFTER REFERRED TO AS THE CIT(A)] ERRED ON FACTS AS ALSO IN LAW IN SUSTAINING ADDITION OF RS.7,38,350/ - OUT OF TOTAL ADDITION OF RS.27 ,03,145/ - MADE ON ACCOUNT OF DEPOSITS MADE IN BANK ACCOUNT. THE ADDITION MAY KINDLY BE DELETED. 3.0 THE LEARNED CIT(A) ERRED ON FACTS AS ALSO IN LAW IN CONFIRMING ADDITION OF RS.90,000/ - MADE BY ESTIMATING SHORT TERM CAPITAL GAIN. THE ADDITION MAY KINDLY BE DELETED. 4.0 YOUR HONORS APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR WITHDRAW ANY OR MORE GROUNDS OF APPEAL ON OR BEFORE THE HEARING OF APPEAL. 3. GROUND NO.1 IS GENERAL IN NATURE, HENCE NEEDS NO ADJUDICATION. IT IS DISMISSED. 4. THE FACTS RELATING TO THE CONTROVERSY INVOLVED IN GROUND NO.2 ARE THAT THE ASSESSING OFFICER MADE THE ADDITION OF RS.27,03,145/ - ON ACCOUNT OF UNEXPLAINED DEPOSITS (IN CASH AND THROUGH CHEQUES) IN THE BANK ACCOUNTS HELD WITH PUNJAB NATIONAL BANK FOR THE DETAILED REA SONS GIVEN IN PARAGRAPH NOS. 2.1 TO 2.17 OF THE ASSESSMENT ORDER. UPON APPEAL, THE LD CIT(A) RESTRICTED THE ADDITION TO RS. 7,38,350/ - BY WORKING OUT THE PEAK OF CASH DEPOSITS AFTER CONSIDERING THE AMOUNT OF WITHDRAWALS RE - DEPOSITED. THE LD CIT(A) TREATED THE ENTIRE DEPOSITS BY CHEQUE AS EXPLAINED, EXCEPT DEPOSIT OF RS.28,450/ - AND RS.19,500/ - . 5. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF ASSESSEE, SHIR J C RANPURA, CA APPEARED AND POINTED OUT THAT THE LD CIT(A) IS NOT JUSTIFIED IN HOLDING THAT THE SUBMISSIONS MADE BEFORE HIM REGARDING THE CONTRIBUTIONS RECEIVED FROM VARIOUS FAMILY MEMBERS FOR MAKING INVESTMENT IN SHARES WERE AN AFTERTHOUGHT. THE LD COUNSEL OF THE ASSESSEE PLEADED THAT IT IS A MATTER OF RECORD THAT THE ASSESSING OFFICER RANDOMLY SU MMONED SIX PERSONS, OUT OF WHICH FOUR ATTENDED AND THOUGH THEY COULD NOT SATISFACTORILY DEPOSE BEFORE THE ASSESSING OFFICER, BUT THE VERY 31 - RJT - 2013 - KUMARI ASHMITA K JOSHI 3 FACT THAT THEY AGREED TO HAVE GIVEN FUNDS TO THE ASSESSEE INDICATE THAT CONTENTION OF THE ASSESSEE IS NOT AN AFTERTHOU GHT. THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE IDENTITY PROOFS OF ALL THE CONTRIBUTORS ARE ON RECORD AND HE FURTHER SUBMITTED THAT THE DEPOSITORS ACCOUNT MATCHES WITH THE CASH BOOK WHICH WAS PRODUCED BEFORE THE ASSESSING OFFICER AND THE LD CIT( A) , THUS TREATING THE ENTIRE AMOUNTS OF CONTRIBUTIONS RANGING FROM RS.12,000/ - TO RS.19,000/ - AS UNEXPLAINED AND ADDING THE SAME TO THE TOTAL INCOME OF THE ASSESSEE IS HARSH AND UNJUST. HE FURTHER SUBMITTED THAT THE LD CIT(A) FAILED TO LOOK INTO THE BONA F IDE INTENTION OF THE ASSESSEE TO HELP THE RELATIVES BY MAKING INVESTMENT OF THEIR FUNDS INTO SHARES AND EARN SOME PROFIT IN THE RATIO OF RESPECTIVE CONTRIBUTIONS. ON THE STRENGTH OF THESE ARGUMENTS, THE LD COUNSEL FOR THE ASSESSEE PLEADED THAT THE ADDITION TO THE EXTENT OF RS.7,38,350/ - , SUSTAINED BY THE LD CIT(A) IN THE IMPUGNED ORDER, BE DELETED. 6. AS AGAINST THE AFORESAID ARGUMENTS OF LD COUNSEL FOR THE ASSESSEE, LD DEPARTMENTAL REPRESENTATIVE VEHEMENTLY THE ORDER OF LD CIT(A). HE POINTED OUT THAT AF TER CONSIDERING EACH AND EVERY CONTENTION OF THE ASSESSEE AND MATERIALS AVAILABLE ON RECORD, THE LD CIT(A) HAS SUSTAINED THE ADDITION TO THE EXTENT OF RS.7,38,350/ - . THEREFORE, THE VIEW TAKEN BY THE LD CIT(A) IN THIS REGARD BE UPHELD. 7. RIVAL SUBMISSIO NS WERE CONSIDERED. IT IS PERTINENT TO NOTE THAT THE LD CIT(A) HAS RESTRICTED THE ADDITION TO RS.7,38,350/ - BY GIVING BENEFIT OF PEAK OF CASH DEPOSITS AFTER CONSIDERING THE AMOUNT OF WITHDRAWALS RE - DEPOSITED. THE VIEW TAKEN BY THE LD CIT(A) IN TREATING TH E AMOUNT DEPOSITED BY CHEQUE OF RS.28,450/ - AND RS.19,500/ - AS EXPLAINED IS ALSO FAIR AND REASONABLE. LOOKING TO THE FACTUAL MATRIX OF THE CASE, WE ARE CONVINCED THAT THE ASSESSEE HAS COOKED UP THE STORY OF CONTRIBUTION RECEIVED FROM VARIOUS FAMILY MEMBERS FOR MAKING INVESTMENT IN SHARES BY AFTERTHOUGHT. WE ARE, THEREFORE, INCLINED TO UPHELD THE ORDER OF LD CIT(A) IN SUSTAINING THE ADDITION OF RS.7,38,350/ - OUT OF TOTAL ADDITION OF RS.27,03,145/ - . IN THE RESULT, GROUND NO.2 IS REJECTED. 31 - RJT - 2013 - KUMARI ASHMITA K JOSHI 4 8. THE FACTS REL ATING TO THE CONTROVERSY INVOLVED IN GROUND NO.3 ARE THAT IN THE RETURN OF INCOME THE ASSESSEE HAS SHOWN THE SHORT TERM CAPITAL GAIN OF 10% OF THE TRANSACTION VALUE AND MADE ADDITION OF RS.90,000/ - . THE ASSESSING OFFICER PROCEEDED ON THE BASIS OF TWO NOTI ONS; VIZ (A) THE APPELLANT HAD ENTERED INTO OFF - MARKET TRANSACTIONS AND (B) THE MARKETS WERE AT ITS PEAK DURING THIS PERIOD. IN THE IMPUGNED ORDER, THE LD CIT(A) CONFIRMED THE ADDITION FOR THE DETAILED REASONS GIVEN IN PARAGRAPH 4.1 OF THE ORDER. THE REASO NING GIVEN BY HIM IN THIS PARAGRAPH ARE THAT WHERE THE ASSESSEE HAS RECEIVED THE SHARES THROUGH IPO ALLOTMENT AND SOLD THEM, THE CAPITAL GAIN IS CORRECTLY CALCULATED. HOWEVER, WHERE SHARES ARE ACQUIRED IN ASSESSEES DEMAT ACCOUNT FROM THE DEMAT ACCOUNTS O F HER RELATIVES AT HER OWN SELF DETERMINED PRICE; THE CAPITAL GAIN MAY BE ARBITRARILY REDUCED. ONE SUCH EXAMPLE IS CAPITAL LOSS OF RS.51,200/ - SHOWN BY ASSESSEE IN SHARES OF ICICI. THE ASSESSEE HAS ACQUIRED 108 SHARES FROM ALLOTMENT IN IPO AT A RATE OF R S.900/ - . HOWEVER, THE ASSESSEE ALSO ACQUIRED 108 SHARES EACH FROM THE DEMAT ACCOUNTS OF HER RELATIVES K D JOSHI AND POONAM K JOSHI AND HAS ARBITRARILY CONSIDERED THE RATE OF RS.1250 PER SHARE. IF THE ASSESSEE HAD CONSIDERED THE RATES AT RS.900/ - PER SHARE FOR THE SHARES ACQUIRED FROM HER RELATIVES K D JOSHI AND POONAM JOSHI, THERE WOULD BE CAPITAL GAIN OF RS.24,400/ - INSTEAD OF LOSS OF RS.51,200/ - . THEREFORE CONSIDERING SUCH ARBITRARINESS IN SELF DETERMINED PURCHASE PRICE OF SHARES ACQUIRED BY APPELLANT FR OM HER CLOSE RELATIVES IN OFF MARKET AND IN RESPECT OF OPENING STOCK OF SHARES, THE ASSESSING OFFICER DETERMINED THE CAPITAL GAIN OF RS.90,000/ - . 9. AT THE TIME OF HEARING BEFORE US, THE LD COUNSEL FOR THE ASSESSEE PLEADED THAT THE ESTIMATION OF RS.90,000 / - IS ON THE HIGHER SIDE. AS AGAINST THIS, THE DEPARTMENTAL REPRESENTATIVE PLEADED THAT LOOKING TO THE EXAMPLE GIVEN BY THE LD CIT(A) IN THE IMPUGNED ORDER, THE ESTIMATION OF RS.90,000/ - IS FAIR AND REASONABLE. 10. THE RIVAL SUBMISSIONS WERE CONSIDERED. ONLY POINT FOR DETERMINATION BEFORE US IS THAT WHETHER THE ESTIMATION OF SHORT TERM CAPITAL GAIN AT 31 - RJT - 2013 - KUMARI ASHMITA K JOSHI 5 RS.90,000/ - IS FAIR AND REASONABLE OR NOT. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE HAS ACQUIRED SHARES FROM HER CLOSE RELATIVES AT A HIGHER PRICE THAN THE MARKET PRICE. IN THESE TRANSACTIONS, SHE HAS INCURRED LOSS OF RS.51,200/ - . HAD THE ASSESSEE CONSIDERED THE PURCHASE RATE AT RS.900/ - PER SHARE FOR THE SHARE ACQUIRED FROM HER RELATIVES, SHE WOULD HAVE EARNED THE SHORT TERM CAPITAL GAIN OF RS.24,400/ - INSTEAD OF LOSS OF RS.51,200/ - . CONSIDERING THESE CONSPICUOUS FACTS OF THE CASE, THE ESTIMATION OF SHORT TERM CAPITAL GAIN BY THE ASSESSING OFFICER IS FAIR AND REASONABLE. WE, THEREFORE, DECLINE TO INTERFERE. GROUND NO.3 OF THE APPEAL IS REJECTED. 11. WITH REGARD TO GROUND NO.4, NO ADDITIONAL GROUND WAS RAISED BEFORE US, THEREFORE THIS GROUND IS REJECTED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS REJECTED. THIS O RDER PRONOUNCED IN O PEN COURT ON THE DATE MENTIONED HEREINABOVE. SD/ - SD/ - ( . . D. K. SRIVASTAVA ) ( . . [ / T. K. SHARMA) / ACCOUNTANT MEMBER I / JUDICIAL MEMBER / ORDER DATE 14 . 0 8 . 2013. /RAJKOT *BT 4 RJO O / COPY OF ORDER FORWARDED TO: - 1 . / APPELLANT - KUMARI ASHMITA K. JOSHI, JADESHWAR BHUVAN, 9, JAYRAJ PLOT, RAJKOT 2 . / RESPONDENT - INCOME - TAX OFFICER, WARD - 4(2), RAJKOT 3 . I / CONCERNED CIT - III, RAJKOT 4 . . - / CIT (A) - III - RAJKOT 5 . II , , / DR, ITAT, RAJKOT 6 . [ / GUARD FILE / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT