Shri Harish Goyal, Chandigarh V. ACIT, Chandigarh

ITA 405/CHANDI/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80887 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-09-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 17-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Keywords: Reopening of assessment; Business income; Agreed addition
• Section: 148; 28

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACOCUNTANT MEMBER ITA NO. 405/CHD/2014 ASSESSMENT YEA R 2007-08 HARISH GOYAL V A.C.I.T. H NO. 3126, SEC 28 CIRCLE 4(1) CHANDIGARH CHANDIGARH AAVPG 3228R (APPELLANT) (RESPONDENT) APPELLANT BY SHRI PARIKSHIT AGGARWAL RESPONDENT BY SHRI J.S. NAGAR DATE OF HEARING 15.9.2014 DATE OF PRONOUNCEMENT 23.9.2014 ORDER PER BHAVNESH SAINI, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), CHANDIGARH DATED 29.1.2014 FOR ASSESSMENT Y EAR 2007-08 CHALLENGING THE ORDER OF THE LD. CIT(A) IN CONFIRMI NG THE ACTION OF THE ASSESSING OFFICER IN COMPUTING THE INCOME OF RS. 1, 00,39,085/- AS INCOME FROM SHORT TERM CAPITAL GAIN AS AGAINST ASSESSABLE UNDER THE HEAD BUSINESS AND PROFESSION AND THEREBY ALSO ERRED IN REJECTING THE CLAIM OF REBATE U/S 88E OF IT ACT. 2 BRIEFLY FACTS OF THE CASE ARE THAT THE ASSESSEE H AD DECLARED AN INCOME OF RS. 1,71,98,561/-. THE CASE WAS REOPENED U/S 148 OF THE IT ACT. THE ASSESSING OFFICER ON A PERUSAL OF THE COM PUTATION OF INCOME FOUND THAT THE ASSESSEE HAS CLAIMED A REBATE U/S 88 E OF THE IT ACT AT RS. 25,70,284/- BUT HAS NOT SHOWN ANY INCOME FROM BUSIN ESS AND TRADING OF SHARES AND ONLY INCOME SHOWN FROM SHARES IS UNDER T HE HEAD SHORT TERM CAPITAL GAIN. SINCE NO INCOME ARISING FROM TAXABL E SECURITY TRANSACTION HAS BEEN SHOWN UNDER THE HEAD INCOME FROM BUSINESS OR PROFESSION THE 2 ASSESSEE WAS ASKED TO EXPLAIN WHY REBATE CLAIMED MA Y NOT BE DISALLOWED. THE ASSESSEE VIDE HIS LETTER DATED 1.1 1.2011 GAVE NO OBJECTION TO THE PROPOSED DISALLOWANCE. THE ASSESSI NG OFFICER ACCORDINGLY DISALLOWED THE CLAIM OF REBATE U/S 88E OF IT ACT AN D COMPUTED THE INCOME ACCORDINGLY . 3 THE LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSI NG OFFICER AND DISMISSED THE APPEAL OF THE ASSESSEE. THE LD. CIT( A) ALSO NOTED THAT AS PER FIFTH PROVISO TO SECTION 48 OF IT ACT, ANY DEDU CTION IN RESPECT OF AMOUNT PAID TOWARDS STT IS NOT TO BE ALLOWED IN COM PUTING THE INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAIN. 4 WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 5 THE LD. COUNSEL FOR THE ASSESSEE ALSO MOVED AN AP PLICATION FOR ADMISSION OF THE ADDITIONAL GROUND OF APPEAL CHALLE NGING THE REOPENING OF ASSESSMENT U/S 147/148 OF IT ACT AND AFTER BRIEF AR GUMENTS, HE HAS SUBMITTED THAT HE WAS NOT PRESSING THIS APPLICATION . THE APPLICATION FOR ADMISSION OF ADDITIONAL GROUND OF APPEAL IS ACCORDI NGLY DISMISSED AS NOT PRESSED. 5.1 ON CONSIDERATION OF RIVAL SUBMISSIONS ON MERIT, WE DO NOT FIND ANY SUBSTANCE IN THE APPEAL OF THE ASSESSEE. THE ASSESS EE IN THE COMPUTATION OF INCOME HAS SHOWN SHORT TERM CAPITAL GAIN IN A SUM OF RS. 1,00,39,085/-. THUS THE ASSESSEE HAS NOT SHOWN ANY INCOME FROM BUSINESS OF TRADING OF SHARES. SINCE NO INCOME ARI SING FROM TAXABLE SECURITY TRANSACTION HAVE BEEN SHOWN UNDER THE HEAD INCOME FROM BUSINESS OR PROFESSION, THE CLAIM OF THE ASSESSEE OF REBATE U/S 88E WAS NOT ADMITTEDLY ALLOWABLE. SECTION 88E OF IT ACT IS REPRODUCED AS UNDER: 88E (1) WHERE THE TOTAL INCOME OF AN ASSESSEE IN A PREVIOUS YEAR INCLUDES ANY INCOME, CHARGEABLE UNDER THE HEAD PROFIT AND G AINS OF BUSINESS OR PROFESSION, ARISING FROM TAXABLE SECURITIES TRANSA CTION, HE SHALL BE ENTITLED TO A TRANSACTION, COMPUTED IN THE MANNER PROVIDED IN S UB-SEC (2) OF AN AMOUNT EQUAL TO THE SECURITIES TRANSACTION TAX PAID BY HIM IN RESPECT OF THE TAXABLE SECURITIES TRANSACTION ENTERED INTO IN THE COURSE O F HIS BUSINESS DURING THAT PREVIOUS YEAR; 3 PROVIDED THAT NO DEDUCTION UNDER THIS SUB-SECTION S HALL BE ALLOWED UNLESS THE ASSESSEE FURNISHES ALONG WITH THE RETURN OF INCOME , EVIDENCE OF PAYMENT OF SECURITY TRANSACTION TAX IN THE PRESCRIBED FORM. PROVIDED FURTHER THAT THE AMOUNT OF DEDUCTION UNDER THIS SUB-SECTION SHALL NOT EXCEED THE AMOUNT OF INCOME-TAX ON SUCH INCOME COMP UTED IN THE MANNER PROVIDED IN SUB-SECTION (2). (2) FOR THE PURPOSES OF SUB-SEC (1) THE AMOUNT OF I NCOME TAX ON THE INCOME ARISING FROM THE TAXABLE SECURITIES TRANSACT ION, REFERRED TO IN THAT SUB- SECTION SHALL BE EQUAL TO THE AMOUNT CALCULATED BY APPLYING THE AVERAGE RATE OF INCOME-TAX ON SUCH INCOME. (3) NO DEDUCTION UNDER THIS SECTION SHALL BE ALLOWE D IN OR AFTER, THE ASSESSMENT YEAR BEGINNING ON THE IST DAY OF APRIL, 2009. EXPLANATION FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION, TAXABLE SECURITIES TRANSACTION AND SECURITIES TRANSACTION TAX SHALL HAVE THE SAME MEANINGS RESPECTIVELY ASSIGNED TO THEM UNDER CHAPTE R VII OF THE FINANCE (NO. 2) ACT, 2004}. FIRST PROVISION TO THIS PROVISION PROVIDES THAT NO DEDUCTION UNDER THIS SUB- SECTION SHALL BE ALLOWED UNLESS THE ASSESSEE FURNI SHES ALONG WITH THE RETURN OF INCOME, EVIDENCE OF PAYMENT OF SECURITY T RANSACTION TAX IN THE PRESCRIBED FORM. WHEN THE ASSESSING OFFICER GAVE SH OW CAUSE NOTICE TO THE ASSESSEE AS TO WHY REBATE CLAIMED U/S 88E MAY N OT BE DISALLOWED, THE ASSESSEE IN HIS REPLY DID NOT HAVE ANY OBJECTIO N TO THE PROPOSED DISALLOWANCE U/S 88E OF IT ACT. THE LD. COUNSEL FO R THE ASSESSEE, HOWEVER, SUBMITTED THAT REPLY OF ASSESSEE DATED 1.1 1.2011 MAY BE CONSIDERED (COPY FILED IN THE PAPER BOOK). IN THIS REPLY THE ASSESSEE WANTED TO AMEND THE RETURNED INCOME. THE ASSESSEE IN HIS REPLY ADMITTED THAT THE INCOME OF RS. 1,00,39,085/- WAS T O BE SHOWN UNDER THE HEAD INCOME FROM BUSINESS OR PROFESSION BUT NOTHI NG IS PRODUCED BEFORE US TO PROVE THAT IN FACT THE ASSESSEE INSTEAD OF EA RNING CAPITAL GAIN HAS EARNED BUSINESS INCOME. FURTHER NOTHING WAS PROVED BEFORE THE AUTHORITIES BELOW THAT THE ASSESSEE HAS ANY INCOME FROM BUSINESS OR PROFESSION FOR CLAIMING REBATE U/S 88E OF IT ACT. IN THE SAME REPLY THE ASSESSEE DID NOT HAVE OBJECTION TO THE PROPOSED DIS ALLOWANCE U/S 88E OF IT ACT BECAUSE THE ASSESSEE HAS CLAIMED SHORT TERM CAPITAL GAIN IN THE COMPUTATION OF INCOME. 5.2 EVEN BEFORE US THE ASSESSEE HAS FAILED TO PROVE AS TO HOW THE ASSESSEE EARNED BUSINESS INCOME FOR CLAIMING DEDUCT ION U/S 88E OF IT 4 ACT. SINCE THE ASSESSEE FAILED TO PROVE HIS CASE B EFORE THE AUTHORITIES BELOW AND REBATE U/S 88E WAS DISALLOWED AS PER LAW ON NO OBJECTION GIVEN BY THE ASSESSEE, THEREFORE THE LD. CIT(A) SHOULD NO T HAVE ENTERTAINED THE APPEAL OF THE ASSESSEE. IT IS WELL SETTLED LAW THA T NO APPEAL LIES ON AGREED ADDITIONS. WE RELY ON THE DECISION OF HON'B LE BOMBAY HIGH COURT IN THE CASE OF JIVALAL PURTAPSHI V. CIT, 65 ITR 261 , DECISION OF HON'BLE KERALA HIGH COURT IN THE CASE OF CIT V. VAMADEVAN BHANU, 330 ITR 559 AND DECISION OF HON'BLE HIGH COURT OF PUNJAB & HARY ANA IN THE CASE OF BANTA SINGH KARTAR SINGH V CIT, 125 ITR 239. 5.3 CONSIDERING THE TOTALITY OF THE FACTS AND CIRC UMSTANCES OF THE CASE, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE ASSES SEE. THE SAME IS ACCORDINGLY DISMISSED. 6 IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 23.9.2014 SD/- SD/- (T.R. SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL M EMBER DATED : 23.9.2014 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR