CHANCHALABEN BIRAWAT, MUMBAI V. ACIT 17(3), MUMBAI

ITA 4198/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3853 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 17-02-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 24-05-2013
• Court: TRIBUNAL
• Department Lawyers: S R KIRTNEY
• Assessee Lawyers: AJAY NAGPAL
• Keywords: Penny stocks

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER I.T.A. NO.4198/M/2013 (ASSESSMENT YEAR: 2005 - 2006 ) I.T.A. NO.4199/M/2013 (ASSESSMENT YEAR: 2006 - 2007 ) SMT. CHANCHALBEN BIRAWAT, 105/106, 305 - 306, B BLOCK, DEEPAK JYOTI TOWER, G.D. AMBEDKAR MARG, KALACHOWKI, MUMBAI 400033. / VS. ACIT - 17(3), PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMAI 400 012. ./ PAN : AAMPB2975P ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI AJAY NAGPAL, AR / RESPONDENT BY : SHRI S.R. KIRTNEY, DR / DATE OF HEARING : 17.02.2016 / DATE OF PRONOUNCEMENT : 17.02.2016 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS UNDER CONSIDERATION INVOLVING THE ASSESSMENT YEARS 2005 - 06 AND 2006 - 07. BOTH THESE APPEALS RELATE TO PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE ACT. 2. BRIEFLY STATED RELEVANT FACTS OF THE PENALTIES INCLUDE THAT THE ASSESSEE CLAIMED EXEMPTION U/S 10(38) OF THE ACT IN RESPECT OF THE CAPITAL GAINS INVOLVING TRADING OF PENNY STOCKS. CONSIDERING THE DISPU TES AND THE FACTS AVAILABLE ON RECORD, AO HELD THAT THE GAINS SHOULD BE TAXED UNDER THE HEAD INCOME FROM OTHER SOURCES. THE DECISION OF THE AO WAS CONFIRMED BY THE CIT (A). DURING THE SECOND APPELLATE PROCEEDINGS BEFORE THE TRIBUNAL, ASSESSEE SUBMITTED THAT THE CLAIM SHOULD BE ALLOWED IN FULL. AFTER HEARING BOTH THE PARTIES, TRIBUNAL HELD IN FAVOUR OF THE ASSESSEE AND UPHELD THE ASSESSEES CLAIM. THE ORDER OF THE TRIBUNAL VIDE ITA NO.972 & 973/M/2010 (AYS 2005 - 06 AND 2006 - 07), DATED 20.2.2015 IS RELEV ANT IN 2 THIS REGARD. BRINGING OUR ATTENTION TO PARA 27 OF THE SAID TRIBUNALS ORDER (SUPRA), LD COUNSEL FOR THE ASSESSEE DEMONSTRATED THE FACT OF TRIBUNAL GRANTING RELIEF TO THE ASSESSEE IN RESPECT OF THE LONG TERM CAPITAL GAINS. FURTHER, BRINGING OUR ATT ENTION TO MISCELLANEOUS APPLICATION (MA) NO.55/MUM/2015, DATED 1.5.2015 LD COUNSEL FOR THE ASSESSEE DEMONSTRATED THE SIMILAR BENEFIT WAS EXTENDED TO SHORT TERM CAPITAL GAINS ALSO. PARA 4 OF THE SAID MA IS RELEVANT IN THIS REGARD. 3. AFTER GOING THROUGH THE ABOVE MENTIONED BOTH THE ORDERS OF THE TRIBUNAL AND AFTER HEARING THE LD DR FOR THE REVENUE, WE FIND, EVENTUALLY THE CLAIM OF THE ASSESSEE WAS UPHELD AND THE DECISIONS OF THE AO / CIT (A) WERE REVERSED. IN EFFECT, THE ADDITIONS MADE BY THE AO WERE DEL ETED. THEREFORE, THE PENALTIES LEVIED BY THE AO AND CONFIRMED BY THE CIT (A) ON THE ABOVE REFERRED ADDITION IS UNSUSTAINABLE IN LAW. WE HAVE PERUSED THE RELEVANT PARA 27 OF THE SAID TRIBUNALS ORDER (SUPRA) DATED 20.2.2015 AS WELL AS PARA 4 OF THE S AID M A ORDER DATED 1.5.2015 ARE EXTRACTED AS UNDER: - PARA 27 FROM THE TRIBUNALS ORDER: - 27. .......WE ARE OF THE CONSIDERED VIEW THAT THERE WAS NO CREDIBLE MATERIAL WITH THE DEPARTMENT TO DISPROVE THE CLAIM OF LONG TERM CAPITAL GAINS MADE BY THESE ASSESSEES I N THEIR RESPECTIVE RETURNS OF INCOME. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE LD CIT (A) PASSED IN THE RESPECTIVE HANDS OF THE ASSESSEES HEREIN ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO DELETE THE ASSESSMENT OF GROSS SALE RECEIPTS AS INCOME FR OM OTHER SOURCES IN ALL THE YEARS UNDER CONSIDERATION AND ACCORDINGLY DIRECT THE AO TO ACCEPT THE LTCG DECLARED BY THESE ASSESSEES IN ALL THE YEARS UNDER CONSIDERATION. PARA 4 OF THE MA ORDER: - 4....... ........ (B) IN PARAGRAPH 27 OF THE ORDER, IN THE THIRD LINE, THE EXPRESSION AND SHORT TERM CAPITAL GAINS SHALL BE ADDED AFTER THE EXPRESSION LONG TERM CAPITAL GAINS. (C) IN PARAGRAPH 27 OF THE ORDER, IN EIGHTH LINE, THE EXPRESSION AND STCG SHALL BE ADDED AFTER THE EXPRESSION LTCG. .......... 4 . FROM THE ABOVE, IT IS EVIDENT THE ADDITION MADE BY THE AO IS DELETED. THEREFORE, THE PENALTY IS NOT EXCISABLE IN BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE IN BOTH THE APPEALS ARE ALLOWED IN FAVOUR OF THE ASSESSEE. 5. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. 3 ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH FEBRUARY, 2016. S D / - S D / - ( PAWAN SINGH ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 17.2.2016 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI