Simi Verma, New Delhi V. ITO, Ward- 57(3), New Delhi

ITA 3387/DEL/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2688 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 08-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K P GANGULI
• Keywords: Deduction for capital gain; Accommodation entries
• Section: 69C; 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC BENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA , ACCOUNTANT MEMBER ITA NO. 3387 /DEL/201 8 [ASSESSMENT YEAR: 2 0 14 - 15 ] SMT. SIMI VERMA VS. THE I.T.O, B 228, YOJANA VIHAR WARD - 57 ( 3 ) NEW DELHI . NEW DELHI PAN: AEDPV 2575A [APPELLANT] [RESPONDENT] DATE OF HEARING : 05 . 11 .201 8 DATE OF PRONOUNCEMENT : 0 6 . 1 1 .2018 ASSESSEE BY : SHRI K.P. GANGULI, ADV. REVENUE BY : MS. AASHNA PAUL , SR. DR ORDER PER N .K. BILLAIYA, ACCOUNTANT MEMBER: T HIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] XXV , N EW DELHI DATED 1 9 . 0 3 .201 8 PERTAINING TO ASSESSMENT YEAR 20 14 - 15 . 2 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT( A) ERRED IN CONFIRMING THE ASSESSMENT ORDER WHEREIN THE ASSESSING OFFICER DENIED CLAIM OF LONG TERM CAPITAL GAIN EXEMPTION U/S 10(38) OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] AND MADE ADDITION U/S 68 OF THE ACT. THE LD. CIT(A) FURTHER ERRED IN CONFIRMING THE ADDITION MADE U/S 69C OF THE ACT. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT RETURN FOR THE YEAR UNDER CONSIDERATION WAS SELECTED FOR SCRUTINY ASSESSMENT THROUGH CASS IN ORDER TO EXAMINE THE SUSPICIOUS TRANSA CTION RELATING TO LONG TERM CAPITAL GAIN O N SHARES. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O OBSERVED THAT THE ASSESSEE HAS SOLD 10,000 SHARES OF TURBOTECH ENGINEERING PVT LTD FOR TOTAL CONSIDERATION OF RS. 24,13,604/ - AND AFTER REDUCING THE PURCHASE VALUE OF RS. 20,000/ - , THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN OF RS. 23,93,604/ - . 3 5. THE ASSESSING OFFICER CAME TO NOTICE THAT THE DIRECTORATE OF INVESTIGATION, KOLKATA CARRIED OUT COUNTRY - WIDE INVESTIGATION TO UNEARTH THE ORGANIZED RA CKET OF GENERATING BOGUS ENTRIES OF LONG TERM CAPITAL GAIN , WHICH IS EXEMPT FROM TAX. THE ASSESSING OFFICER LEARNT THAT TURBOTECH ENGINEERING PVT LTD IS ALSO ONE SUCH COMPANY WHICH HAS BEEN IDENTIFIED AS A LISTED PENNY STOCK ON BSE , WHICH HAS BEEN USED FOR GENERATING BOGUS LONG TERM CAPITAL GAIN. 6. DRAWING SUPPORT FROM THE ORDER OF THE SEBI AND FURTHER FINDING THAT THE SCRIP TURBOTECH ENGINEERING PVT LTD , IN WHICH TRADING DONE BY THE ASSESS EE HAS BEEN SUSPENDED BY THE BOMBAY STOCK EXCHANGE VIDE NOTICE DAT ED 01.01.2015. AFTER ANALYSING THE INVESTIGATION REPORT FROM KOLKATA, SEBI ORDERS AND BSE ORDERS AND DRAWING SUPPORT FROM VARIOUS DECISIONS, THE ASSESSING OFFICER FINALLY CAME TO THE CONCLUSION THAT THE AMOUNT OF RS. 23 , 93 , 604/ - CLAIMED AS LONG TERM CAPIT AL GAIN BY THE ASSESSEE IS BOGUS AND ACCORDINGLY DISALLOWED THE SAME AND ADDED FURTHER 5% BEING COMMISSION PAID FOR ARRANGING CAPITAL GAIN AND COMPUTING ASSESSMENT BY MAKING ADDITION OF RS. 23,93,604/ - U/S 68 OF 4 THE ACT, RS. 1,19,680/ - U/S 69C OF THE ACT. THE ASSESSEE AGITATED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 7. I HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND RELEVANT DOCUMENTARY EVIDENCES BROUGHT ON RECORD. PURCHASE AND SALE OF SHARES ARE DOCUMENTED AND EXHIBITE D AT PAGES 1 TO 8 OF THE PAPER BOOK. SALE OF SHARES ARE CARRIED OUT IN BSE AT THE PRICES PREVAILING IN THE MARKET WH I CH ARE DULY SUPPORTED BY CONTRACT NOTES ISSUED BY THE BROKER. THE ENTIRE TRANSACTIONS HAVE BEEN DISCARDED BY THE REVENUE AUTHORITIES BECA USE THE BSE HAS SUSPENDED TRADING IN SHARES OF TURBOTECH ENGINEERING PVT LTD IN JANUARY 2015. THE UNDISPUTED FACT IS THAT THE ASSESSEE HAD SOLD THE SHARES IN THE MONTH OF JULY AND SEPTEMBER 2013, THEREFORE, ANY ACTION TAKEN IN 2015 WOULD NOT AFFECT THE TR ANSACTIONS DONE IN 2013. MOREOVER, NEITHER THE SEBI NOR THE BSE HAS NULLIFIED THE TRANSACTIONS DONE IN 2013 IN THE SCRIP OF TURBOTECH ENGINEERING PVT LTD. MERELY BECAUSE SOME MARKET PLAYERS WERE DOING CLANDESTINE ACTIVITIES IN SOME SCRIPS IN THE STOCK MA RKET WOULD NOT MAKE GENUINE TRANSACTIONS BOGUS. MERE L Y 5 BECAUSE IN THE REPORT OF INVESTIGATION WING, KOLKATA NAME OF TURBOTECH ENGINEERING PVT LTD IS MENTIONED WOULD NOT MAKE GENUINE TRANSACTION BOGUS. THERE IS NO DIRECT EVIDENCE TO DEMONSTRATE THAT THE ASSESSEE WAS ONE OF THE DIRECT BENEFICIARIES OF THE ACCOMMODATION ENTRIES PROVIDED BY THE COMPANY. CONSIDERING THE FACTS OF THE CASE IN TOTALITY IN THE LIGHT OF SUPPORTING DOCUMENTARY EVIDENCES, I DO NOT FIND ANY MERIT IN THE IMPUGNED ADDITIONS. I , ACCOR DINGLY , DIRECT THE ASSESSING OFFICER TO ALLOW CLAIM OF LONG TERM CAPITAL GAIN EXEMPTION U/S 10(38) OF THE ACT AND DELETE THE ADDITIONS MADE U/S 69C OF THE ACT. 8 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO. 3387 /DEL/201 8 IS ALLOWED . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 0 6 . 1 1 .2018. S D / - [N.K. BILLAIYA] ACCOUNTANT MEMBER DATED: 0 6 T H NOVEMBER , 2018 6 VL/ COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) ASST. REGISTRAR, 5. DR ITAT, NEW DELHI DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER