V ASHOK CHAND., THIRUNINRAVUR V. ITO, WARD 1(3), KANCHIPURAM

ITA 3530/CHNY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5061 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 28-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: T PRAMODKUMAR CHOPDA
• Keywords: Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !', $ '% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.3530/CHNY/2018 ' (' / ASSESSMENT YEAR : 2009-10 SHRI V. ASHOK CHAND, NO.294, CTH ROAD, KRISHNAPURAM, THIRUNINRAVUR 602 024. PAN : AGSPA 5355 N V. THE INCOME TAX OFFICER, WARD 1(3), KANCHIPURAM. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI T. PRAMODKUMAR CHOPDA, ADVOCA TE ,-*+ . / / RESPONDENT BY : SHRI SRIDHAR DORA, JCIT 0 . 1$ / DATE OF HEARING : 13.05.2019 23( . 1$ / DATE OF PRONOUNCEMENT : 17.05.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-7, CHENNAI , DATED 20.09.2018 AND PERTAINS TO ASSESSMENT YEAR 2009-10. 2. THERE WAS A DELAY OF 16 DAYS IN FILING THIS APPE AL BY THE ASSESSEE. THE ASSESSEE HAS FILED A PETITION FOR CO NDONATION OF 2 I.T.A. NO.3530/CHNY/18 DELAY. WE HAVE HEARD THE LD.COUNSEL FOR THE ASSESS EE AND THE LD. D.R. WE FIND THAT THERE WAS SUFFICIENT CAUSE FOR N OT FILING THE APPEAL BEFORE THE STIPULATED TIME. THEREFORE, WE CONDONE THE DELAY AND ADMIT THE APPEAL. 3. SHRI T. PRAMODKUMAR CHOPDA, THE LD.COUNSEL FOR T HE ASSESSEE, SUBMITTED THAT THE ASSESSEE CLAIMED EXEMP TION UNDER SECTION 10(38) OF THE INCOME-TAX ACT, 1961 (IN SHOR T 'THE ACT') IN RESPECT OF LONG TERM CAPITAL GAINS ARISING OUT OF S ALE OF SHARES TO THE EXTENT OF 38,19,415/-. THE LD. REPRESENTATIVE FURTHER SUBMIT TED THAT THE ASSESSING OFFICER MAINLY PLACED HIS RELIAN CE ON THE INVESTIGATION MADE BY THE INVESTIGATION WING OF THE DEPARTMENT AT MUMBAI. ACCORDING TO THE LD. REPRESENTATIVE, A COP Y OF THE SAID INVESTIGATION REPORT WAS NOT FURNISHED TO THE ASSES SEE. THEREFORE, THE LD. REPRESENTATIVE SUBMITTED THAT AN OPPORTUNIT Y MAY BE GIVEN TO THE ASSESSEE BY REMITTING BACK THE MATTER TO THE FI LE OF THE ASSESSING OFFICER. 4. ON THE CONTRARY, SHRI SRIDHAR DORA, THE LD. DEPA RTMENTAL REPRESENTATIVE, SUBMITTED THAT HE IS PLACING RELIAN CE ON THE ORDERS OF THE ASSESSING OFFICER AS WELL AS THE CIT(APPEALS ). 3 I.T.A. NO.3530/CHNY/18 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE MADE INVESTMENTS IN THE EQUITY SHARES. THE ASSESSE E SOLD THE SAME FOR A TOTAL CONSIDERATION OF 38,19,415/-. THE LONG TERM CAPITAL GAINS ON THE SALE OF THESE SHARES CLAIMED B Y THE ASSESSEE WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROU ND THAT THE COMPANY IN WHICH THE ASSESSEE INVESTED IS A PENNY S TOCK COMPANY. HOWEVER, IT IS NOT BROUGHT ON RECORD HOW THE ASSESS EE IS INVOLVED IN PROMOTING THE PENNY STOCK COMPANY AND HOW THE ASSES SEE INVOLVED IN INFLATING THE SHARES OF THE COMPANY. M OREOVER, THE COPY OF THE REPORT OF THE INVESTIGATION SAID TO BE MADE AT MUMBAI BY THE INVESTIGATION WING OF THE DEPARTMENT WAS NOT FURNIS HED TO THE ASSESSEE. ON IDENTICAL CIRCUMSTANCES, THIS TRIBUNA L IN THE CASE OF KANHAIYALAL & SONS (HUF) V. ITO IN I.T.A. NO.1849/C HNY/2018, HAS REMITTED BACK THE MATTER TO THE FILE OF THE ASSESSI NG OFFICER FOR RECONSIDERATION. IN FACT, THIS TRIBUNAL HAS OBSERV ED AT PARA 4 OF ITS ORDER DATED 06.02.2019 AS FOLLOWS:- 4. WE HEARD SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE ALSO. ADMITTEDLY, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEES ON THE BASIS OF THE INFORMATION SAID TO B E 4 I.T.A. NO.3530/CHNY/18 RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT AT KOLKATA WITH REGARD TO INVESTMENT MAD E BY THE ASSESSEES IN THE PENNY STOCK COMPANY. IT IS NOT IN DISPUTE THAT A COPY OF THE INVESTIGATION REPORT SAID TO BE RECEIVED FROM KOLKATA WAS NOT FURNISHED TO TH E ASSESSEE. MOREOVER, DETAILS OF THE ENQUIRIES SAID TO BE MADE BY THE ASSESSING OFFICER WERE ALSO NOT FURNISH ED TO THE ASSESSEES. IN THOSE CIRCUMSTANCES, THIS TRI BUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFF ICER HAS TO RECONSIDER THE ISSUE AFRESH AFTER FURNISHING THE MATERIAL RELIED UPON BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BEL OW ARE SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL BRING ON RECORD THE ROLE OF THE ASSES SEES IN PROMOTING THE COMPANY AND THE RELATIONSHIP OF TH E ASSESSEES, IF ANY WITH THE PROMOTERS, ROLE OF THE ASSESSEES IN INFLATING THE PRICE OF SHARES, ETC. T HE ASSESSING OFFICER SHALL ALSO FURNISH A COPY OF THE INVESTIGATION REPORT SAID TO BE RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT AT KOLKATA AND OTHER MATERIALS IF ANYTHING IN HIS POSSESSION AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WI TH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEES. 6. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFFICER. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITI ES BELOW ARE SET ASIDE AND THE ISSUE RAISED BY THE ASSESSEE WITH REG ARD TO DEDUCTION UNDER SECTION 10(38) OF THE ACT IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL EXA MINE THE MATTER 5 I.T.A. NO.3530/CHNY/18 AS DIRECTED BY THIS TRIBUNAL IN THE CASE OF KANHAIY ALAL & SONS (HUF) (SUPRA) AND THEREAFTER DECIDE THE ISSUE AFRESH IN A CCORDANCE WITH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE A SSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 17 TH MAY, 2019 AT CHENNAI. SD/- SD/- (. !') ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 17 TH MAY, 2019. KRI. . ,167 87(1 /COPY TO: 1. *+/ APPELLANT 2. ,-*+/ RESPONDENT 3. 0 91 () /CIT(A)- 7, CHENNAI 4. PRINCIPAL CIT- 2, CHENNAI 5. 7: ,1 /DR 6. ;' < /GF.