Smt.Chandra Kala Kejriwal , Bangalore V. Income Tax Officer Ward-7(2)(2), Bangalore

ITA 378/BANG/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9931 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 07-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KABILA H
• Keywords: Unexplained cash credit; Income from undisclosed sources; Opportunity of being heard
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH (SMC) : BANGALORE BEFORE SHRI JASON P BOAZ , ACCOUNTANT MEMBER ITA NO. 37 8 /BANG/201 8 ASSESSMENT YEAR : 20 14 - 15 SMT. CHANDRA KALA KEJRIWAL, 8/52, GF, PRESIDENT CHAMBERS, RICHMOND ROAD, BANGALORE 560 025. PAN : ADPPK 9562 P VS. THE INCOME-TAX OFFICER, WARD - 7(2)(2), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI. BALRAM R. RAO, ADVOCATE REVENUE BY : SMT. KABILA H, JCIT DATE OF HEARING : 2 6 . 11 .201 8 DATE OF PRONOUNCEMENT : 5 . 1 2 .201 8 O R D E R PER JASON P BOAZ, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-7, BANGALORE DATED 03.01.2018 FOR ASSESSMENT YEAR 2014-15. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS UNDER: 2.1 THE ASSESSEE FILED HER RETURN OF INCOME FOR ASSESSMENT YEAR 2014-15 ON 24.03.2015 DECLARING INCOME OF RS.12,16,780/- FROM HOUSE PROPERTY, OTHER SOURCES AND CAPITAL GAINS OF RS.19,69,787/- CLAIMED AS EXEMPT U/S 10(38) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). THE CASE WAS TAKEN UP FOR SCRUTINY AND THE ASSESSMENT WAS CONCLUDED U/S 143(3) OF THE ACT VIDE ORDER DATED 29.12.2016, WHEREIN THE ITA NO. 378/BANG/2018 PAGE 2 OF 5 ASSESSEES INCOME WAS DETERMINED AT RS.33,13,680/- IN VIEW OF THE ADDITION OF SALE PROCEEDS OF RS.20,96,900/- RECEIVED ON ACCOUNT OF SALE OF 40,000 SHARES OF M/S. BLAZON MARBLE LTD., BEING HELD TO BE CASH CREDITS U/S 68 OF THE ACT. ON APPEAL, THE CIT(A)-7, BANGALORE, DISMISSED THE ASSESSEES APPEAL VIDE THE IMPUGNED ORDER DATED 31.01.2018. 3.1 AGGRIEVED BY THE ORDER OF THE CIT(A)-7, BANGALORE, DATED 03.01.2018 FOR ASSESSMENT YEAR 2014-15, THE ASSESSEE HAS PREFERRED THIS APPEAL WHEREIN IT HAS RAISED THE FOLLOWING GROUNDS: 1. THE LEARNED CIT (APPEALS) ERRED IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER IN THE MANNER IN WHICH HE DID. 2. THE LEARNED CIT (APPEALS) AS WELL AS THE AUTHORITIES BELOW ERRED IN TREATING LONG TERM CAPITAL GAIN ON SALE OF SHARES AMOUNTING TO RS.19,09,460/- AS INCOME U/S.68 OF IT ACT AS AGAINST THE CLAIM OF THE APPELLANT U/S. 10(38) OF THE ACT. 3. THE LEARNED CIT (APPEALS) FAILED TO APPRECIATE THE FACT THAT THE AO IN THE ASSESSMENT PROCEEDINGS DID NOT PROVIDE THE FINDINGS OF THE SEARCH/SURVEY, INQUIRIES CONDUCTED IN THE CASE OF APPELLANT'S BROKERS, OPERATORS AND THE ENTRY PROVIDERS NOR PROVIDED AN OPPORTUNITY TO CROSS EXAMINE THE AFORESAID PARTIES. 4. THE LEARNED CIT(APPEALS) AS WELL THE AUTHORITIES BELOW FAILED TO APPRECIATE THE FACT THAT THE APPELLANT HAD DISCHARGED THE PRIMARY ONUS BY FURNISHING ALL EVIDENCES TO ESTABLISH THE GENUINENESS OF THE TRANSACTION AND THE ADDITIONS SO MADE U/S.68 OF THE ACT WAS UNCALLED FOR. 5. THE LEARNED CIT (APPEALS) AS WELL AS THE AUTHORITIES BELOW FAILED TO APPRECIATE THE FACT THAT THE APPELLANT HAD BONA-FIDELY INVESTED IN M/ S. BLAZON MARBLE LTD (PREVIOUSLY KNOWN AS SHUBHAM GRANITES LTD.) AS AN INVESTOR AND NOT WITH ANY INTENSION TO DECEIT THE DEPARTMENT. 6. THE LEARNED CIT(APPEALS) FAILED TO CONSIDER THE FOLLOWING CASE LAWS RELIED BY THE APPELLANT:- A) IN THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH: KOLKATA MANISH KUMAR BAID VS. ACIT, CIR-35, KOLKATA. ITA NO. 378/BANG/2018 PAGE 3 OF 5 B) SMT. ANJLI PANDIT VS. ASSISTANT CIT (MUMBAI), REPORTED AT (2017) 188 TTJ (MUMBAI) 645. C) FARRAH MARKER VS. INCOME TAX OFFICER, BOMBAY TRIBUNAL; REPORTED AT (2016) 46 CCH 0535 MUM. 7. THE LEARNED CIT (APPEALS) ERRED IN RELYING ON THE DECISION OF ITAT, NAGPUR BENCH IN THE CASE OF SHRI SANJAY BIMALCHAND JAIN IN ITA NO. 61/ NAG/ 2013 VIDE ORDER DATED 18.07.2016 WHEREIN THE FACTS ARE DISTINGUISHABLE TO THE FACTS OF THE APPELLANT'S CASE. 8. RELIANCE IS PLACED ON THE JUDGMENT OF THE HIGH COURT OF RAJASTHAN IN THE CASE OF COMMISSIONER OF INCOME TAX VS. SMT. SUMITRA DEVI REPORTED IN (2014) 268 CTR 0351 (RAJ): (2014) 102 DTR (RAJ) 0342 WHEREIN ON SIMILAR CIRCUMSTANCES, THE APPEAL OF THE DEPARTMENT WAS DISMISSED IN FAVOUR OF THE ASSESSEE. 9. THE LEARNED CIT (APPEALS) ERRED IN UPHOLDING THE INTEREST LEVIED U/S. 234A AMOUNTING TO RS. 59,920/-. 10. FOR THESE AND OTHER SUCH GROUNDS THAT MAY BE URGED AT THE TIME OF THE HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED. 3.2 DURING THE COURSE OF HEARING, THE LD. AR FOR THE ASSESSEE SUBMITTED THAT ON SIMILAR FACTS AND CIRCUMSTANCES, THE MATTER FOR CONSIDERATION IS SQUARELY COVERED BY THE DECISION OF THE ITAT, KOLKATA BENCH IN ITS ORDER IN ITA NO. 2394/KOL/2017 IN THE CASE OF PRAKASH CHAND BUTORIA. IT IS SUBMITTED THAT IN THE CITED CASE (SUPRA) ALSO, THE ASSESSEE, AN INDIVIDUAL, FILED HIS RETURN OF INCOME CLAIMING INCOME ON SALE OF SHARES AS EXEMPT U/S 10(38) OF THE ACT. THE ASSESSING OFFICER (AO) TREATED THE RECEIPT OF SALE CONSIDERATION AS UNACCOUNTED INCOME AND MADE AN ADDITION U/S 68 OF THE ACT. ON APPEAL, THE CIT(A) UPHELD THE AOS ORDER. HOWEVER, ON FURTHER APPEAL, THE ITAT, KOLKATA BENCH ALLOWED THE ASSESSEES APPEAL OBSERVING THAT THE ADDITION WAS UNSUSTAINABLE SINCE THE AO MADE THE ADDITION IN A ROUTINE AND MECHANIZED MANNER, MERELY ON SUSPICIONS BASED ON REPORT OF ENQUIRIES MADE BY THE INVESTIGATION DIRECTORATE OF DIT, KOLKATA, WITHOUT BRINGING THE SAME ON RECORD OR CONFRONTING THE ASSESSEE WITH OR SUPPLYING THE ASSESSEE COPIES OF THE DOCUMENTS RELIED UPON FOR MAKING THE ADDITION AND PROVIDING HER OPPORTUNITIES FOR REBUTTAL. IT IS PRAYED THAT IN ITA NO. 378/BANG/2018 PAGE 4 OF 5 VIEW OF THE ABOVE, THE ORDERS OF THE AUTHORITIES BELOW BE SET ASIDE AND THE ASSESSEES APPEAL BE ALLOWED. 3.3 PER CONTRA, THE LEARNED DR FOR REVENUE SUBMITTED THAT ON SIMILAR FACTS AND CIRCUMSTANCES AS IN THE CASE ON HAND, ISSUE FOR CONSIDERATION IS COVERED BY THE DECISIONS OF THE BENGALURU ITAT IN THE CASES OF ARVIND KUMAR MOOLCHAND IN ITA NO.509/BANG/2017 AND PUKHRAJ HASMUKHLAL IN ITA NO.1927/BANG/2017 WHEREIN THE TRIBUNAL HAS RESTORED THE ISSUE TO THE FILE OF THE AO HAVING OBSERVED THAT THE ADDITIONS WERE MADE BASED ON REPORTS OF THE INVESTIGATION DIRECTORATE AT KOLKATA AND STATEMENTS OF VARIOUS PERSONS WITHOUT CONFRONTING OR MAKING THEM AVAILABLE TO THE ASSESSEE FOR REBUTTAL. IN THOSE CASES, THE TRIBUNAL RESTORED THE MATTER TO THE FILE OF THE AO WITH THE DIRECTION TO CONFRONT THE MATTER TO THE FILE OF THE AO WITH THE DIRECTION TO CONFRONT THE ASSESSEE WITH THE REPORTS / DOCUMENTS / STATEMENTS PROPOSED TO BE USED AGAINST THE ASSESSEE, ALLOW REBUTTAL THEREOF AND CROSS EXAMINATION OF PARTIES ON WHOSE TESTIMONY IS PROPOSED TO BE RELIED UPON AND THE MATTER BE ADJUDICATED AFRESH AFTER AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND TO ALSO FILE DETAILS / SUBMISSIONS IN THIS REGARD. 3.4 IN REJOINDER, THE LD.AR FOR THE ASSESSEE DID NOT DISPUTE THE PROPOSITION PUT FORTH BY THE LD. DR FOR RESTORING THIS ISSUE TO THE FILE OF THE AO FOR DE NOVO ADJUDICATION. 3.5 I HAVE HEARD BOTH PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUDING THE JUDICIAL DECISIONS CITED AND THE ORDERS OF THE AUTHORITIES BELOW. TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE JUDICIAL DECISIONS CITED, I FIND THAT THE ISSUE FOR CONSIDERATION IS SQUARELY COVERED BY THE ORDERS OF THE BENGALURU ITAT IN THE CASES OF ARVIND KUMAR MOOLCHAND (SUPRA) AND PUKHRAJ HASMUCHLAL (SUPRA). FOLLOWING THE AFORESAID ORDERS (SUPRA), I SET ASIDE THE ORDERS OF THE AO AND RESTORE THE MATTER OF TREATMENT OF SALE PROCEEDS DECLARED ON SALE OF SHARES ITA NO. 378/BANG/2018 PAGE 5 OF 5 AS UNEXPLAINED CREDITS U/S 68 OF THE ACT TO THE FILE OF THE AO TO RE-ADJUDICATE THE ISSUE AFRESH; AFTER MAKING AVAILABLE TO THE ASSESSEE FOR HER REBUTTAL ALL DOCUMENTS RELIED UPON BY REVENUE FOR MAKING THE ADDITIONS/DISALLOWANCE AND PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE FOR CROSS-EXAMINATION OF PERSONS WHOSE STATEMENTS ARE BEING RELIED UPON. IT IS ACCORDINGLY ORDERED. 4. IN VIEW OF THE ABOVE, THE OTHER GROUNDS RAISED ON MERITS ARE RENDERED ACADEMIC AND THEREFORE NOT REQUIRED TO BE ADJUDICATED AT THIS JUNCTURE. 5. IN THE RESULT, THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2014-15 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF DECEMBER, 2018. SD/- SD/- BANGALORE. DATED: 5 TH DECEMBER, 2018. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE. ( N. V. VASUDEVAN ) ( JASON P BOAZ ) JUDICIAL MEMBER ACCOUNTANT MEMBER