Nishant Jain, Delhi V. ITO, Ward-52(3), New Delhi

ITA 384/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9880 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 18-01-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of cross examination; Question of law; Third party statement

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC BENCH, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 384/DEL/2019 [ASSESSMENT YEAR: 2015-16] NISHANT JAIN, VS. ITO, WARD-52(3), 105, DARYA GANJ, NEW DELHI DELHI 110 006 (PAN: AHMPJ1878J) [APPELLANT] [RESPONDENT] ASSESSEE BY: SH. SANJAY GUPTA, CA REVENUE BY : SH. MANOJ KUMAR GUPTA, SR. DR. ORDER THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX [APPEALS]-18, NEW DELHI DATED 01.11.2018 PERTAINING TO ASSESSMENT YEAR 2015-16 ON THE FOLLOW ING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF EXEMPTION CLAIMED U/S. 10(38) AT RS. 5,30,200/- IN RESPECT O F LONG TERM CAPITAL GAIN EARNED ON SALE OF LISTED EQUITY SHARE S SOLD THROUGH RECOGNIZED STOCK EXCHANGE WHICH HAS DULY BEEN SUBJE CTED TO SECURITY TRANSACTION TAX STT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF ENTI RE SALE PROCEEDS OF SHARES OF RS. 5,30,200/- U/S. 68 OF THE ACT, WITHOUT PROPERLY APPRECIATING THE FACTS THAT SOURCE AND IDE NTITY OF SUCH RECEIPT IN BANK ACCOUNT OF ASSESSEE APPELLANT AND GENUINENESS OF THE SAID TRANSACTION WAS ESTABLISHED ON ASSESSME NT RECORD WITH THE SUPPORT OF RELATED DOCUMENTARY EVIDENCES. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 5,30,200/- U/S. 68 OF THE ACT, WITHOUT PROPERLY APPRECIATING THE FA CTS THAT ON THE 2 FACTS AND CIRCUMSTANCES OF THE CASE, THAT ADDITION ON THE BASIS OF THIRD PARTY STATEMENTS WITHOUT GIVING ANY OPPORTUNI TY FOR CROSS EXAMINATION IS IN VIOLATION OF PRINCIPLES OF NATURA L JUSTICE AND THUS THE ASSESSMENT MADE IS VOID IN LAW AND NEEDS T O BE QUASHED. 4. ON THE FACT AND CIRCUMSTANCES OF THE CASE IN LAW, L D. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 26,510/- ON ACCOUNT OF PAYMENT TO COMMISSION AGENT OUT OF UNDISCLOSED INCO ME. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DE LETE THE ABOVE GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. AT THE TIME OF HEARING, LD. DR STATED THAT THE I SSUE REGARDING THE SHARES OF M/S KAPPAC PHARMA LTD. HAS BEEN ADJUDICAT ED AND DECIDED BY THE ITAT, DELHI BENCHES IN THE CASE OF UDIT KALRA V S. ITO DECIDED IN ITA NO. 6717/DEL/2017 ON 08.1.2019 IN FAVOUR OF THE REV ENUE, WHEREIN THE SHARES OF KAPPAC PHARMA LTD. HAS BEEN DECLARED BOGU S. HE FURTHER STATED THAT THE ORDER OF THE ITAT, DELHI BENCHES IN THE CASE OF UDIT KALRA VS. ITO (SUPRA) HAS BEEN UPHELD BY THE HONBLE DELH I HIGH COURT IN ITA NO. 220/2019 & CM NO. 10774/2019 VIDE ORDER DATED 0 8.3.2019. HE HAS ALSO FILED THE COPY OF THE ORDER DATED 8.3.2019 PAS SED BY THE HONBLE DELHI HIGH COURT AND REQUESTED THAT THE APPEAL OF T HE ASSESSEE MAY BE DISMISSED. 3. LD. COUNSEL FOR THE ASSESSEE REITERATED THE GROU NDS OF APPEAL AND HAS NOT PRODUCED ANY CONTRARY ORDER WHICH CONTROVER TS THE CONTENTION OF THE LD. DR, AS AFORESAID. 4. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE OR DERS PASSED BY THE REVENUE AUTHORITIES INCLUDING THE ITAT ORDER DATED 8.1.2019 PASSED IN THE CASE OF UDIT KALRA VS. ITO DECIDED IN ITA NO. 6717/ DEL/2017 IN FAVOUR OF THE REVENUE, WHICH HAS BEEN UPHELD BY THE HONBLE D ELHI HIGH COURT IN THE CASE OF UDIT KALRA VS. ITO IN ITA NO. 220/2019 & CM NO. 10774/2019 VIDE ORDER DATED 08.3.2019. AFTER GOING THROUGH TH E DOCUMENTARY EVIDENCES FILED BY BOTH THE PARTIES, I AM OF THE C ONSIDERED VIEW THAT THE 3 SHARES OF M/S KAPPAC PHARMA LTD. AS HELD BY THE ASS ESSEE IN THE PRESENT CASE, THE GENUINENESS OF THE SAME HAS ALREADY BEEN EXAMINED BY THE ITAT DELHI BENCHES IN THE CASE OF UDIT KALRA (SUPRA ) AND FIND THAT M/S KAPPAC PHARMA LTD. HAS BEEN DE-LISTED FROM THE STOC K EXCHANGE AND IS SUSPICIOUS AND WAS DENIED THE EXEMPTION U/S. 10(38) OF THE I.T. ACT, 1961. FOR THE SAKE OF CONVENIENCE, THE RELEVANT POR TION OF THE JUDGMENT OF THE HONBLE HIGH COURT OF DELHI DECIDED IN THE C ASE OF UDIT KALRA VS. ITO (SUPRA) IS REPRODUCED AS UNDER:- 'THE ASSESSEE IS AGGRIEVED BY THE CONCURRENT FINDIN GS OF THE TAX AUTHORITIES - INCLUDING THE LOWER APPELLATE AUTHORITIES REJECTING ITS CLAIM FOR A LONG TERM CAP ITAL GAIN REPORTED BY IT, TO THE TUNE OF RS.13,33,956/- AND RS.14,34,501/- IN RESPECT OF 4,000 SHARES OF M/S KAPPAC PHARMA LTD. THE ASSESSEE HELD THOSE SHARES F OR APPROXIMATELY 19 MONTHS; THE ACQUISITION PRICE WAS RS.12/- PER SHARE WHEREAS THE MARKET PRICE OF THE SHARES AT THE TIME OF THEIR SALE, WAS RS.720/-. IT IS CONTENDED THAT THE ASSESSEE WAS NOT GRANTED FAIR OPPORTUNITY. MR. RAJESH MAHNA, LEARNED COUNSEL APPEARING FOR THE ASSESSEE RELIED UPON THE ORDERS O F THE CO-ORDINATE BENCH OF THE TRIBUNAL, IN RESPECT OF TH E SAME COMPANY I.E. M/S KAPPAC PHARMA LTD., AND POINTED OUT THAT THE TAX AUTHORITY'S APPROACH IN TH IS CASE WAS ENTIRELY ERRONEOUS AND INCONSISTENT. THE M AIN THRUST OF THE ASSESSEE'S ARGUMENT IS THAT HE WAS DE NIED THE RIGHT TO CROSS-EXAMINATION OF THE INDIVIDUALS W HOSE STATEMENTS LED TO THE INQUIRIES AND ULTIMATE DISALLOWANCE OF THE LONG TERM CAPITAL GAIN CLAIM IN THE RETURNS WHICH ARE THE SUBJECT MATTER OF THE PRESENT APPEAL. THIS COURT HAS CONSIDERED THE SUBMISSIONS O F THE PARTIES. ASIDE FROM THE FACT THAT THE FINDINGS IN T HIS 4 CASE ARE ENTIRELY CONCURRENT - AO., CIT(A) AND THE I TAT HAVE ALL CONSISTENTLY RENDERED ADVERSE FINDINGS - W HAT IS INTRIGUING IS THAT THE COMPANY (MIS KAPPAC PHARMA L TD.) HAD MEAGRE RESOURCES AND IN FACT REPORTED CONSISTEN T LOSSES. IN THESE CIRCUMSTANCES, THE ASTRONOMICAL GR OWTH OF THE VALUE OF COMPANY'S SHARES NATURALLY EXCITED THE SUSPICIONS OF THE REVENUE. THE COMPANY WAS EVEN DIRECTED TO BE DELISTED FROM THE STOCK EXCHANGE. HA VING REGARD TO THESE CIRCUMSTANCES AND PRINCIPALLY ON TH E GROUND THAT THE FINDINGS ARE ENTIRELY OF FACT, THIS COURT IS OF THE OPINION THAT NO SUBSTANTIAL QUESTION OF LAW ARISES IN THE PRESENT APPEAL. THIS APPEAL IS ACCORDINGLY DISMISSED.' 4.1 AFTER GOING THROUGH THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE JUDGMENT OF THE HONBLE DELHI HIGH COURT I N THE CASE OF UDIT KALRA VS. ITO (SUPRA), I HAVE NO OTHER OPTION EXCEP T TO FOLLOW THE DECISION OF THE HONBLE DELHI HIGH COURT, BECAUSE NO OTHER CONTRARY JUDGMENT HAS BEEN PRODUCED BY THE LD. COUNSEL FOR THE ASSESEE. ACCORDINGLY, FOLLOWING THE AFORESAID PRECEDENT, I UPHOLD THE ORDER OF THE LD. CIT(A) AND DECIDE THE ISSUE IN DISPUTE AGAINST THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. THE ORDER PRONOUNCED ON 06.01.2020. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATED: 06-01-2020 SRB COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) ASST. REGISTRAR, 5. DR ITAT, NEW DELHI