HEMANSHU SANGHVI HUF, MUMBAI V. ITO 25(3)(2), MUMBAI

ITA 3879/MUM/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8257 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 07-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHAITNYA ANJARIA LD
• Assessee Lawyers: RAJENDRA JAIN LD
• Keywords: Accommodation entries; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO.3878/MUM/2016 ASSESSMENT YEAR: 2008-09 MS. SHIKHA SANGHVI, 603 EMP 18 PLUTO, THAKUR, VILLAGE SECTOR 2C, KANDIVALI (E), MUMBAI- 400101. PAN: AGTPS7638F VS. I.T.O., 25(3)(4), MUMBAI (APPELLANT/ASSESSEE) (RESPONDENT/REVENUE) ITA NO.3879/MUM/2016 ASSESSMENT YEAR: 2008-09 HEMANSHU SANGHVI - HUF, 603 EMP 18 PLUTO, THAKUR, VILLAGE SECTOR 2C, KANDIVALI (E), MUMBAI- 400101. PAN: AACHH6566C VS. I .T.O., 25(3)(4), MUMBAI (APPELLANT/ASSESSEE) (RESPONDENT/REVENUE) APPELLANT BY: SHRI RAJENDRA JAIN, LD.AR RESPONDENT BY : SHRI CHAITNYA ANJARIA, LD.DR DATE OF HEARING : 1 7 .07.2019 DATE OF PRONOUNCEMENT : 1 7 - 07 - 2019 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER THE APPEALS FILED BY BOTH THE PARTIES ARE DIRECTED AGAINST THE ORDERS DATED 04-03-2016 PASSED BY LD CIT(A)-45, MUMBAI IN THEIR RESPECTIVE HANDS AND THEY RELATE TO THE ASSESSMENT YEAR 2008-09. BOT H THE PARTIES ARE [2] ITA NO.3878/MUM/2016 ITA NO.3879/MUM/2016 SHIKHA SANGHVI HEMANSHU SANGHVI-HUF AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMI NG THE ASSESSMENT OF ENTIRE SALE CONSIDERATION RECEIVED ON SALE OF SHARE S AS INCOME OF THE ASSESSEE(S). 2. BOTH THE APPEALS WERE HEARD TOGETHER, AS THE FAC TS WERE IDENTICAL AND THEY ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 3. I HEARD THE PARTIES AND PERUSED THE RECORD. THE LD A.R SUBMITTED THAT BOTH THE ASSESSEES HAVE DECLARED THEIR SHORT T ERM CAPITAL GAINS ON PURCHASE AND SALE OF SHARES THROUGH CONCERNS BELONG ING TO SHRI MUKESH CHOCKSY GROUP. BASED ON INFORMATION RECEIVED FROM T HE INVESTIGATION WING OF THE DEPARTMENT THAT MUKESH CHOCKSY GROUP WAS IND ULGING IN PROVIDING ACCOMMODATION ENTRIES/PAYMENTS AND UPON NOTICING TH AT THE ASSESSEES HEREIN HAVE HAD TRANSACTIONS WITH THE ABOVE SAID GR OUP, THE ASSESSING OFFICER RE-OPENED THE ASSESSMENTS OF THE YEAR UNDER CONSIDERATION IN THE HANDS OF BOTH THE PARTIES. THE AO REJECTED THE CLA IM OF SHORT TERM CAPITAL GAINS IN THE HANDS OF BOTH THE ASSESSEES AND TREATE D THE ENTIRE SALE CONSIDERATION AS INCOME OF ASSESSEE(S) BY WAY OF UN EXPLAINED CASH CREDIT TRANSACTION. THE LD CIT(A) CONFIRMED THE SAME. 4. AT THE TIME OF HEARING, THE LD A.R SUBMITTED THAT THE TRANSACTIONS OF PURCHASE AND SALE OF SHARES HAVE BEEN DONE THROUGH BANKING CHANNELS AND HENCE IT SHOULD HAVE BEEN ACCEPTED. HE FURTHER SUBM ITTED THAT, IF AT ALL ANYTHING IS TO BE ADDED, IT IS ONLY THE NET GAIN AR ISING OUT OF SUCH TRANSACTION. HE SUBMITTED THAT THE AO WAS NOT RIGH T IN ASSESSING THE SALE CONSIDERATION AS INCOME OF THE ASSESSEES, INSTEAD O F ASSESSING THE PROFIT EARNED FROM THE TRANSACTIONS. [3] ITA NO.3878/MUM/2016 ITA NO.3879/MUM/2016 SHIKHA SANGHVI HEMANSHU SANGHVI-HUF 5. THE LD. AR, IN THE ALTERNATIVE, SUBMITTED THAT B OTH THE ASSESSEES WOULD BE WILLING TO FOREGO THE CLAIM OF SHORT TERM CAPITAL GAINS, IF ADDITION IS RESTRICTED TO GAIN ARISING FROM THE TRANSACTIONS, I .E., THE DIFFERENCE BETWEEN THE SALES VALUE AND PURCHASE VALUE. 6. I HEARD LD D.R AND PERUSED THE RECORD. I FIND THAT THERE IS MERIT IN THE ALTERNATIVE CONTENTIONS OF THE LD.AR. IT IS AN ADMI TTED FACT THAT THE ASSESSEE(S) MADE PAYMENTS FOR PURCHASE OF SHARES TH ROUGH BANKING CHANNELS AND RECEIVED PAYMENTS ON SALE OF SHARES AL SO THROUGH BANKING CHANNELS. THE ASSESSEE, IN EFFECT, HAS GAINED ONLY THE DIFFERENCE BETWEEN RECEIPT OF MONEY AND PAYMENT OF MONEY. SINCE MONE Y TRANSACTIONS WERE FOR PURCHASE/SALE OF SHARES, THE NET GAIN HAS BEEN OFFERED/DECLARED AS SHORT TERM CAPITAL GAINS. IF THE ASSESSING OFFICER DISBEL IEVED THE CLAIM OF PURCHASE AND SALE OF SHARES, THEN WHAT IS REQUIRED TO BE TAX ED IS ONLY NET GAIN RECEIVED BY THE ASSESSEE. ACCORDINGLY, I FIND MERI T IN THE SUBMISSIONS OF THE ASSESSEE(S). ACCORDINGLY, I SET ASIDE THE IMPUGNED ORDERS PASSED BY THE LD. CIT(A) ON THIS ISSUE IN THE HANDS OF BOTH THE ASSES SEES AND DIRECT THE ASSESSING OFFICER TO ASSESS THE NET GAIN AS INCOME OF ASSESSEES UNDER THE HEAD INCOME FROM OTHER SOURCES. 7. IN THE RESULT, THE APPEALS OF RESPECTIVE ASSES SES ARE PARTLY ALLOWED. ORDER PRONOUNCED ON 17-07-2019 SD/- ( B.R. BASKARAN) ACCOUNTANT MEMBER MUMBAI, DATED : 17 TH JULY,2019 [4] ITA NO.3878/MUM/2016 ITA NO.3879/MUM/2016 SHIKHA SANGHVI HEMANSHU SANGHVI-HUF COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. THE CIT 5. THE DR, B B ENCH, ITAT, MUMBAI BY ORDER (ASSISTANTREGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI DATE INITIAL WHETHER DICTATION PAD ENCLOSED WITH THE FILE : YES/ NO. 1. DRAFT DICTATED ON 17.07.2019 YES SR.PS 2. DRAFT PLACED BEFORE AUTHOR 17.07.2019 MATTER TYPED P.P SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 17.07.2019 P.P JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 17/07 PP SR.PS 6. DATE OF PRONOUNCEMENT 17/7 SR.PS 7. FILE SENT TO THE BENCH CLERK 18/7 PP SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER