Smt. Poonam Chhabra, Indore V. The ITO Ward 3(1), Indore

ITA 319/IND/2013

• Counselvise Citation: 31922714 RSA 2013
• Duration Of Justice: 2 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-09-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 17-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: GIRISH AGRAWAL
• Keywords: Capital asset; Additional evidence
• Section: 143(3); 133(6); 131; 15

Judgement Text

SMT. POONAM CHHABRA ITA 319 OF 2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NO. 319/IND/2013 A.Y.2006-17 SMT. PUNAM CHHABRA INDORE PAN ABMPC488SN ::: APPELLANT VS INCOME TAX OFFICER 3(1) INDORE ::: RESPONDENT APPELLANT BY SHRI HITESH CHIMNANI & SHRI GIRISH AGRAWAL RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 1 . 9 .2015 DATE OF PRONOUNCEMENT 8 . 9 .2015 O R D E R PER SHRI B.C. MEENA, AM THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LEARNED CIT(A)-III, BARODA, DATED 21. 2.2013 HAVING CONCURRENT JURISDICTION OVER THE CHARGE OF CIT (A)-I, INDORE. SMT. POONAM CHHABRA ITA 319 OF 2013 2 2. IN THIS CASE THE RETURN OF INCOME WAS FILED ON 31.7.2006 DECLARING INCOME OF RS.1,37,460/- AND AGRICULTURAL INCOME OF RS.30,000/-. THE ASSESSEE HAS CLAIMED LONG TERM CAPITAL GAIN OF RS.19,49,679/- AS EXEM PT U/S 10(38) OF THE ACT. THE TRANSACTIONS WERE ON THE SALE OF SHARES OF TORRENT CABLES AND NIHARIKA INDIA. THE ASSESSIN G OFFICER FOUND THAT THE ACQUISITION DATE OF PURCHASE OF SHARES OF NIHARIKA INDIA IS 1.3.2005 INSTEAD OF THE DATE ADOPTED FOR WORKING OUT THE CAPITAL GAIN AND HE HELD THAT THE INCOME SHALL COME UNDER THE PURVIEW OF SHORT TER M CAPITAL GAIN AS THE HOLDING OF PERIOD OF SHARES WAS LESS THAN 12 MONTHS. THE LEARNED CIT(A) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY HOLDING AS UNDER : - 3.3 I HAVE CONSIDERED THE APPELLANTS SUBMISSION AND THE A.O.S OBSERVATION. SIMILAR ADDITIONS WERE MADE IN A.Y. 2005-06 IN APPELLANTS OWN CASE. THE APPELLANTS AR HAS SUBMITTED A COPY SMT. POONAM CHHABRA ITA 319 OF 2013 3 OF DECISION OF HONOURABLE ITAT, INDORE BENCH IN APPELLANTS CASE FOR A.Y,. 2005-06. IN THIS DECISION, THE ITAT HAS HELD THAT THE DATES ON WHICH THE SHARES WERE CREDITED IN THE DEMAT ACCOUNT ARE THE DATES OF PURCHASE OF THE SHARES. THUS, THE SAME IS TRUE FOR THE SHARES HOLD DURING THE CURRENT FINANCIAL YEAR I.E. 2004-06 AS THE SHARES OF NIHARIKA INDIA SOLD DURING THE PERIOD WERE ALSO CREDITED IN THE DEMAT ACCOUNT ON 01.03.2005. HENCE, THE A.O.S ACTION OF TAXING THE CAPITAL GAIN SHOWN AS LONG TERM CAPITAL GAIN BY THE APPELLANT AS SHORT TERM CAPITAL GAIN IS UPHELD AND FIRST & SECOND GROUNDS OF APPEAL ARE DISMISSED. 3. THE GROUND NOS. 1 & 2 OF THE APPEAL READ AS UNDER :- SMT. POONAM CHHABRA ITA 319 OF 2013 4 1. ON THE BASIS OF FACT & RECORDS, LEARNED CIT(APPEAL) HAS ERRED IN CONFIRMING THE ACTION OF A.O. REGARDING TAXED TO THE EXEMPTED LONG TERM CAPITAL GAIN RS.19,49,670/- UNDER SECTION 10(38) OF THE INCOME TAX ACT AS SHORT TERM CAPITAL GAIN ON TH E PLEA OF DATE OF PURCHASE OF SOLD SHARE CONSIDER BY THE ITAT INDROE BENCH IN ASSESSEE CASE AS DATE OF DEMATE OF SHARES. 2. THAT OON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN OVER LOOKING AND SUMMARILY REJECTING TO BOARDS CIRCULAR NO. 704 DATED 28.4.1995 NO 768 DATED 24.6.1998 REGARDING CLARIFICATION TO THE DATE OF PURCHASE OF SHARES, DETAILS STATEMENT OF FACTS SUBMITTED ALONG WITH MEMORANDUM OF APPEAL, VARIOUS DOCUMENTS, SHARE SALES & PURCHASE INVOICE AND EVIDENCE PLACED IN PAPER BOOK FILED ETC. SMT. POONAM CHHABRA ITA 319 OF 2013 5 4. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE M ADE A REQUEST THAT HE WANTS TO SUBMIT ADDITIONAL EVIDENCE UNDE R RULE 29 OF IT RULES, 1963. IT IS AN UNDATED TO WHOMS OEVER IT MAY CONCERN ON THE LETTER-HEAD OF DAYCO SECURITIE S PRIVATE LIMITED. IT HAS NO REFERENCE OR DATE ON IT. AF TER HEARING BOTH THE SIDES, WE HOLD THAT THIS DOCUMENT WAS NOT REQUIRED BY THE BENCH. FURTHER, RECORDS SHOW THAT THE ASSESSEE WAS PROVIDED SUFFICIENT OPPORTUNITY BY BOTH THE INCOME TAX AUTHORITIES. FURTHER WE ALSO DOUBT THE GENUINENESS OF THE DOCUMENT. IN VIEW OF THESE FACTS, WE ARE NOT ALLOWING THIS REQUEST OF THE ASSESSEE. 5. WE HAVE HEARD BOTH THE SIDES. WE FIND THAT ON THIS ISSUE THE HON'BLE ITAT INDORE VIDE ITS ORDER DATED 15.2.2012 HAS DECIDED THE ISSUE AGAINST THE ASSESSEE WH ILE DECIDING ITA NO. 520/IND/2010 FOR THE ASSESSMENT YE AR 2005-06 IN THE ASSESSEES OWN CASE WHERE THE SAME SHARE S SMT. POONAM CHHABRA ITA 319 OF 2013 6 PURCHASED WERE UNDER QUESTION. RELEVANT PARAS OF THE HON'BLE ITAT ARE REPRODUCED HEREUNDER :- 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FOUND THAT THE ASSESSEE HAS PURCHASED SHARES FROM A KOLKATA BASED BROKER, WHOSE ANTECEDENT WAS FOUND BY LOWER AUTHORITIES TO BE IN DEFAULT AND NOT AMENABLE TO VERIFICATION. 8. FROM THE RECORD, WE FOUND THAT THE ASSESSEE HAS PURCHASED 30,000 SHARES OF NIHARIKA INDIA, OUT OF WHICH 14,000 SHARES WERE SOLD DURING THE YEAR ON WHICH EXEMPTION WAS CLAIMED U/S 10(38) ON THE PLEA THAT SHARES WERE HELD FOR MORE THAN 12 MONTHS AND ASSESSEE WAS ENTITLED FOR EXEMPTION U/S 10(38) ON THE PROFIT ARISING OUT OF SALE OF LONG SMT. POONAM CHHABRA ITA 319 OF 2013 7 TERM CAPITAL ASSETS BEING SHARES. THE ASSESSING OFFICER DID NOT BELIEVE THE PURCHASE BILLS AND OBSERVED THAT THE ASSESSEE HAS GOT THE SHARES TRANSFERRED FROM M/S. DYCO SECURITIES TO THE STATE BANK OF INDIA ON 1.3.2005. THUS, AS PER ASSESSING -: 7: - 7 OFFICER, THE SHARES OF NIHARIKA INDIA WAS CREDITED IN THE DEMAT ACCOUNT ON 1.3.2005 BY DYCO SECURITIES LIMITED AS PER DEMAT ACCOUNT. AS THE ASSESSEE COULD NOT SUBSTANTIATE THE PURCHASE IN THE ASSESSMENT YEAR 2002-03 AND 2004-05, THE ASSESSING OFFICER HELD THAT SHARES WERE ACTUALLY PURCHASED BY THE ASSESSEE ON 1.3.2005 I.E. DURING THE FINANCIAL YEAR 2004-05 ITSELF. THE ASSESSING OFFICER HELD THAT TRANSACTION OF PURCHASE WAS NOT GENUINE AND ASSESSEE ALSO SMT. POONAM CHHABRA ITA 319 OF 2013 8 DID NOT HOLD THE SHARES FOR MORE THAN 12 MONTHS. 9. FROM THE RECORD, WE FOUND THAT TO SUBSTANTIATE THE CLAIM OF PURCHASE, THE ASSESSEE HAS NOT ONLY FURNISHED COPY OF BILLS OF PURCHASE BUT ALSO COPY OF THE DEMAT ACCOUNT, WHEREIN SHARES WERE TRANSFERRED BY DYCO SECURITIES LIMITED. WE FOUND THAT THE ASSESSEE HAD GOT THE SHARES DEMATED WITH DYCO SECURITIES PRIVATE LIMITED AND GOT TRANSFERRED TO THE STATE BANK OF INDORE, AS PER THE DEMAT ACCOUNT PLACED IN THE PAPER BOOKS AND ALSO -: 8: - 8 REPRODUCED BY THE ASSESSING OFFICER AT PAGE 13 OF ITS ORDER, THE ASSESSEE HAD GOT THE SHARES TRANSFERRED FROM DYCO SECURITIES TO THE STATE BANK OF INDORE ON 1.3.2005. WE FOUND THAT DEMAT ACCOUNT IS A SMT. POONAM CHHABRA ITA 319 OF 2013 9 CONCLUSIVE EVIDENCE AND SINCE THE ASSESSEE COULD NOT SUBSTANTIATE THE BILL OF PURCHASE, WE UPHOLD THE ACTION OF THE ASSESSING OFFICER FOR COMING TO THE CONCLUSION THAT SHARES WERE PURCHASED ON 1.3.2005 ONLY WHEN THESE WERE TRANSFERRED IN THE DEMAT ACCOUNT. AS PER THE DOCUMENTS PLACED ON RECORD, THE GENUINENESS OF PURCHASE OF 30,000 SHARES OF NIHARIKA INDIA IS NOT IN DOUBT BUT ONLY DISPUTE IS WITH REGARD TO THE ACTUAL DATE OF PURCHASE SO AS TO JUSTIFY ASSESSEES ACTION FOR CLAIMING OF EXEMPTION U/S 10(38) BY TREATING THE SHARES AS HELD FOR MORE THAN 12 MONTHS. WE FOUND THAT WHEN SOME OF THE SHARES OF M/S. NIHARIKA INDIA WERE SOLD IN THE SUBSEQUENT ASSESSMENT YEAR I.E. ASSESSMENT YEAR 2006- 07, THE ASSESSING OFFICER HIMSELF HAS TREATED SMT. POONAM CHHABRA ITA 319 OF 2013 10 THE DATE OF -: 9: - 9 PURCHASE AS THE DATE OF DEMAT BUT DID NOT QUESTION THE GENUINENESS OF THE PURCHASES. THE SAME ASSESSING OFFICER HAS FRAMED THE ASSESSMENT U/S 143(3) IN THE ASSESSMENT YEAR 2006-07 AND HE TREATED THE PURCHASE OF SHARES OF NIHARIKA INDIA AS GENUINE AND ALSO TREATED THE DATE OF PURCHASE AS THE DATE OF DEMAT, WHICH IS A MATTER OF DISPUTE, NONE THE LESS HE HAS NOT QUESTIONED THE GENUINENESS OF PURCHASES SO MADE AND TREATED THE PROFIT ARISING OUT OF SALE OF SUCH SHARES DURING THE ASSESSMENT YEAR 2006-07 AS SHORT TERM CAPITAL GAIN AND TAXED ACCORDINGLY. 10. IN VIEW OF THE ABOVE DISCUSSIONS, THE TRANSACTIONS OF PURCHASE OF 30,000 SHARES OF NIHARIKA INDIA DURING THE YEAR WAS GENUINE SMT. POONAM CHHABRA ITA 319 OF 2013 11 BUT THE DATE OF PURCHASE SHOWN BY THE ASSESSEE IS NOT ACCEPTABLE AND WE HOLD THAT SHARES WERE PURCHASED ONLY ON 1ST MARCH, 2005, WHEN IT WAS CREDITED IN THE DEMAT ACCOUNT OF THE ASSESSEE. ACCORDINGLY, WE CONFIRM THE ACTION OF THE ASSESSING OFFICER WITH -: 10: - 10 REGARD TO DENIAL OF CLAIM OF EXEMPTION U/S 10(38), BUT AT THE SAME TIME, WE HOLD THAT TRANSACTION OF PURCHASE OF SHARES DURING THE YEAR WAS GENUINE. THE GENUINENESS OF PURCHASES IS DULY ESTABLISHED AS PER THE DOCUMENTS PLACED ON RECORD. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO TREAT PROFIT ON SALE OF 14,000 SHARES OF NIHARIKA INDIA, AS SHORT TERM CAPITAL GAINS AND TO TAX ACCORDINGLY. SMT. POONAM CHHABRA ITA 319 OF 2013 12 11. IN THE RESULT, GROUND NO.1 OF THE ASSESSEES APPEAL STANDS DISMISSED, WHEREAS GROUND NO.2 IS ALLOWED. 6. SINCE ITAT HAS ALREADY TAKEN A VIEW ON THE SAME FACTS AND CIRCUMSTANCES AND THERE WAS NO GROUND IN ADMITTING ANY ADDITIONAL EVIDENCE, THEREFORE, WE FIND N O MERIT IN THE APPEAL OF THE ASSESSEE ON THIS ISSUE. THE SAME IS, THEREFORE, DISMISSED. 7. IN GROUND NO. 3 THE ISSUE INVOLVED IS REGARDING CONFIRMING THE ACTION OF THE ASSESSING OFFICER REGARD ING ADDITION OF RS.4,10,000/-OF GENUINE ADVANCE AGAINST AGREEMENT ON SALE OF OWN AGRICULTURAL LAND ON BASELESS MATERIAL AS WELL AS WITHOUT CONFRONTING WITH THE ASSESSE E. 8. FOR THE YEAR UNDER CONSIDERATION THE ASSESSING OF FICER NOTICED THAT THE ASSESSEE HAS SHOWN ADVANCE OF RS. 2 LACS + RS.2,10,000/- IN CASH IN THE MONTH OF APRIL AND OCT OBER, SMT. POONAM CHHABRA ITA 319 OF 2013 13 2005 RESPECTIVELY FROM PRABHULAL. THE ASSESSEE WAS ALSO IN RECEIPT OF ADVANCE OF RS. 2 LACS FROM PRABHULAL IN THE ASSESSMENT YEAR 2005-06. THERE ALSO THE ASSESSING OFFI CER MADE ADDITION WHICH HAS BEEN CONFIRMED BY THE TRIBUNAL. THIS ADDITION WAS CONFIRMED BY THE LEARNED CIT(A). TH E RELEVANT PORTION OF THE ORDER OF THE LEARNED CIT(A) I S AS UNDER :- 3.3 I HAVE CONSIDERED THE APPELLANTS SUBMISSION AND THE A.O.S OBSERVATION. SIMILAR ADDITIONS WERE MADE IN A.Y. 2005-06 IN APPELLANTS OWN CASE. THE APPELLANTS AR HAS SUBMITTED A COPY OF DECISION OF HON'BLE ITAT, INDORE BENCH IN APPELLANTS CASE FOR A.Y. 2005- 06. IN THIS DECISION, THE ITAT HAS HELD THAT THE DATES ON WHICH THE SHARES WERE CREDITED IN THE DEMAT ACCOUNT ARE THE DATES OF PURCHASE OF THE SHARES. THUS, THE DATES OF PURCHASE OF SHARES SMT. POONAM CHHABRA ITA 319 OF 2013 14 OF NIHARIKA INDIA WERE HELD TO BE 01.03.2005. THE SAME IS TRUE FOR THE SHARES HOLD DURING THE CURRENT FINANCIAL YEAR I.E. 2005-06 AS THE SHARES OF NIHARIKA INDIA SOLD DURING THE PERIOD WERE ALSO CREDITED IN THE DEMAT ACCOUNT ON 01.03.2005. HENCE, THE A.O.S ACTION OF TAXING THE CAPITAL GAIN SHOWN AS LONG TERM CAPITAL GAIN BY THE APPELLANT AS SHORT TERM CAPITAL GAIN IS UPHELD AND FIRST & SECOND GROUNDS OF APPEAL ARE DISMISSED. 9. WE HAVE HEARD BOTH THE SIDES.. THE ASSESSEE HAS SHOWN RECEIPT OF ADVANCE OF RS. 4,10,000/- FROM PRABH ULAL. THE ASSESSEE MADE A STORY THAT ADVANCE WAS TAKEN BY THE ASSESSEE ON ORAL AGREEMENT WITH SHRI PRABHULAL FOR THE PURCHASE AND SALE OF LAND AND THE DEAL WAS NOT MATERIALIZED. IT WAS ALSO CLAIMED THAT THE ADVANCE WAS RETURNED BACK IN 2007. THE ASSESSING OFFICER ISSUED NOTICE SMT. POONAM CHHABRA ITA 319 OF 2013 15 U/S 133(6) OF THE ACT TO BRANCH MANAGER, BANK OF INDIA, CALLING FOR STATEMENT OF ACCOUNT OF THE ASSESSEE AND ALSO PHOTOCOPIES OF THE CHEQUES ISSUED BY THE ASSESSEE. I T WAS FOUND THAT THE CHEQUES WERE BEARER CHEQUES AND THESE WERE ENCASHED IN CASH. THE INSPECTOR DEPUTED ON INQUIR Y TO VERIFY THE IDENTITY AND CREDIT WORTHINESS OF PRABH ULAL AND IN HIS REPORT HE FOUND THAT SHRI PRABHULAL WAS WORKING AS A DRIVER IN THE ASSESSEE FAMILY SINCE LAST 26 YEARS AND HIS SALARY WAS RS. 4500/- P.M. AT THE RELEVANT TIME AND THERE WAS NO OTHER SOURCE OF INCOME OF HIS FAMILY CONSISTIN G OF HIMSELF, WIFE AND TWO SONS AND ONE DAUGHTER AND STUDYI NG IN B.COM. IST YEAR, 10 TH AND 11 TH STANDARDS AND HIS CREDIT WORTHINESS WAS NOT ESTABLISHED. FURTHER THERE WAS RELATIONSHIP OF MASTER AND SERVANT BETWEEN THE ASSESSEE AND PRABHULAL. ITAT IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005-06 HAS CONFIRMED THE ADDITION MADE SMT. POONAM CHHABRA ITA 319 OF 2013 16 ON ACCOUNT OF ADVANCE RECEIVED OF RS. 2 LACS IN THE ASSESSEES OWN CASE AS UNDER :- 12. AN ADDITION OF RS. 2 LAKHS WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ADVANCE SHOWN BY THE ASSESSEE AS RECEIVED AGAINST THE SALE OF AGRICULTURAL LAND. 13. THE ASSESSEE WAS ASKED TO FURNISH THE EVIDENCE REGARDING THE GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE PERSON FROM WHOM THE ADVANCE HAS BEEN RECEIVED. IN RESPONSE TO QUERY, THE ASSESSEE HAS SUBMITTED A LETTER FROM SHRI PRABHULAL FROM WHOM THE ADVANCE HAS BEEN RECEIVED IN CASH AND COPY OF DRIVING LICENSE OF THAT PERSON. TO PROVE THE GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF SHRI -: 11: - 11 PRABHULAL, A SUMMONS U/S 131 OF THE INCOME- TAX ACT, 1961, WAS ISSUED ON DATED 24.12.2007 TO SMT. POONAM CHHABRA ITA 319 OF 2013 17 ATTEND OFFICE PERSONALLY WITH THE COPY OF AGREEMENT, INCOME TAX RETURNS OF ASSESSMENT YEAR 2004-05, 2005-06, 2006-07 AND PASS BOOK OF ALL BANKS. THE SAID SUMMONS RETURN UNSERVED AS THE PERSON WAS NOT RESIDING ON GIVEN ADDRESS. VIDE QUERY LETTER DATED 26.12.2007, THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS IN REGARD TO SHRI PRABHULAL ALONGWITH THE PRESENT ADDRESS AND TELEPHONE NO. IN RESPONSE TO QUERY, THE ASSESSEE SUBMITTED A WRITTEN REPLY ON 28.12.2007 THAT THE ADVANCE HAS BEEN RETURNED TO SHRI PRABHULAL THROUGH CHEQUE ON 22.12.2007 AND EXPRESSED INABILITY TO FURNISH COPY OF AGREEMENT AND PRESENT ADDRESS OF SHRI PRABHULAL. 14. BY THE IMPUGNED ORDER, THE CIT(A) CONFIRMED ADDITION BY OBSERVING THAT THE AMOUNT, WHICH WAS RETURNED JUST FIVE DAYS BEFORE THE ASSESSEE DID SMT. POONAM CHHABRA ITA 319 OF 2013 18 NOT KNOW THE ADDRESS AND TELEPHONE NUMBER OF THAT PERSON. 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FOUND FROM RECORD THAT THE ASSESSEE COULD NOT ESTABLISH THE GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF LOAN -: 12: - 12 CREDITORS. A DETAILED FINDING HAS BEEN RECORDED BY THE LOWER AUTHORITIES TO THE EFFECT THAT IDENTITY, GENUINENES S AND CREDITWORTHINESS OF PERSONS COULD NOT BE ESTABLISHED BY THE ASSESSEE INSPITE OF GIVING OPPORTUNITY. WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDINGS RECORDED BY THE LOWER AUTHORITIES. ACCORDINGLY, ACTION OF THE ASSESSING OFFICER IS CONFIRMED. 10. CONSIDERING THESE FACTS, WE DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. SMT. POONAM CHHABRA ITA 319 OF 2013 19 11 GROUND NO. 4 IS GENERAL IN NATURE AND DOES NOT REQUI RE ANY ADJUDICATION. 12. IN THE RESULT, THE APPEAL IS DISMISSED. PRONOUNCED IN OPEN COURT ON 8 TH SEPTEMBER, 2015 SD/- SD/- (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 8 TH SEPTEMBER, 2015 DN/-