KIRANKUMAR RAMESH VARAN, MUMBAI V. ITO WARD-42(1)(3), MUMBAI

ITA 315/MUM/2023

AI Insights

The case involves Kirankumar Ramesh Varan, the appellant, who contested an addition of Rs.7,04,548 under section 68 of the Income Tax Act, 1961, related to the assessment year 2012-13. The addition was made following an ex-parte assessment order by the AO, who classified the shares sold by the assessee as penny stocks based on public domain data. The CIT(A) upheld this decision, referencing a precedent from the Calcutta High Court. The Tribunal found that both the AO and CIT(A) failed to properly examine the facts of the case and thus restored the matter to the AO for a fresh assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132051 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 18-04-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 01-02-2023
• Other Referred Cases: PCIT Vs. Swati Bajaj, 466 ITR 56
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 148; 144; 142(1)

Judgement Text

vk;dj vihyh; vf/kdj.k eqacbZ ihB ß,pÞ eaqcbZ Jh fodkl voLFkh] U;kf;d lnL;],oa Jh vejthr flag] ys[kkdkj lnL; ds le{k IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “H” BENCH BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER vk-vk-la- 315@eaqcbZ@2023 ¼fu-oa- 2012&13½ ITA No.315/MUM/2023 (A.Y.2012-13) Kirankumar Ramesh Varan C-103, Sai Mauli Apartment, Alakapuri Road, Nalasopara (E) Mumbai-401 209 PAN No. AGKPV0781H ..... vihykFkhZ/Appellant cuke Vs. Income Tax Officer, Ward-42 (1) (3), DGIT (Vigilance) (W) Mumbai ..... izfroknh/Respondent vihykFkhZ }kjk@Appellant by : Shri Ashok Mehta, CA izfroknh }kjk@Respondent by : Smt. Anne Varghese, Sr. AR lquokbZ dh frfFk@Date of hearing : 19/04/2023 ?kks”k.kk dh frfFk@Date of pronouncement : 19/04/2023 vkns’k/ ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as “the CIT(A)”) dated 06.12.2022, for the assessment year 2012-13. 2. The assessee in appeal has primarily assailed addition of Rs.7,04,548/- u/s 68 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”). The other P a g e | 2 ITA No.315/MUM/2023 (A.Y.2012-13) KIRANKUMAR RAMESH VARAN grounds raised in appeal are either consequential to or are in support of, primary ground. A perusal of the assessment order dated 16.12.2019 reveals that it is an ex-parte order. The Assessing Officer (AO) had issued notice u/s 148 of the Act, dated 28.03.2019. Subsequently, notice u/s 142(1) of the Act, was issued to the assesse. Despite service of the aforesaid notices, the assessee fails to respond/comply with the aforesaid notices. The AO was constrained to complete the assessment invoking the provisions of section 144 of the Act. The AO completed the assessment making addition of Rs.7,04,548/- u/s 68 of the Act. Against the said assessment order, the assessee filed appeal before the CIT(A). In First Appellate Proceedings, again no details were furnished by the assessee. The assessee only sought copies of the documents/statements on the basis of which addition in the hands of the assessee was made. The CIT(A) following the decision rendered by Hon’ble Calcutta High Court in the case of PCIT Vs. Swati Bajaj, 466 ITR 56 confirmed the addition. Hence, the present appeal by assessee. 3. We have heard the submissions made by rival sides and have examined the orders of authorities below. During the period relevant to assessment year under appeal, the assessee had sold shares of M/s Nimbus Industries Limited for a total consideration of Rs.7,04,548/-. The AO in an ex-parte proceedings held that the shares of M/s Nimbus Industries Limited are penny stocks as there has been a phenomenal increase/fluctuation in the price of shares of the said company. The AO formed its opinion on the basis of data available in public domain as no assistance was provided by the assessee during assessment proceedings. Thereafter, the CIT(A) upheld findings of the AO by placing reliance on the decision in the case of Swati Bajaj (supra), without appreciating facts of the case. After having examined the orders of authorities below, we find that neither the AO nor the CIT(A) have examined the facts of the case in right perspective. Therefore, we P a g e | 3 ITA No.315/MUM/2023 (A.Y.2012-13) KIRANKUMAR RAMESH VARAN deem it appropriate to restore this appeal back to the file of AO for de novo assessment. The AO after taking into consideration submissions of the assessee shall frame assessment, in accordance with law. 4. The assessee is directed to make submissions and file relevant documents upon receipt of notice from the AO, within the time specified in the notice. If the assessee fails to respond to the said notice, the AO is at liberty to take adverse view of the same and proceed, in accordance with law. 5. In the result, impugned order is set aside and appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on Wednesday the 19 th day of April 2023. Sd/- Sd/- (AMARJIT SINGH) (VIKAS AWASTHY) Yks[kkdkj lnL;/ACCOUNTANT MEMBER U;kf;d lnL;/JUDICIAL MEMBER eaqcbZ/Mumbai, fnukad/Dated: 19/04/2023 Mahesh R. Sonavane izfrfyih vxzsf”kr of the Order forwarded to: 1. vihykFkh/The Appellant , 2. izfroknh/The Respondent. 3. vk;dj vk;qDr/ CIT 4. foHkkxh; izfrfu/kh] vk;- vih- vf/k-] eqacbZ/DR, ITAT, Mumbai 5. xkMZ QkbZy/Guard file. BY ORDER, P a g e | 4 ITA No.315/MUM/2023 (A.Y.2012-13) KIRANKUMAR RAMESH VARAN //True Copy// (Dy. /Asst. Registrar)/ Sr. Private Secretary ITAT, Mumbai