Shri Anirudha Nyati, Indore V. The ITo-5(1), Indore

ITA 484/Ind/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4944 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-08-2021
• Assessment Year: 2015-2016
• Appeal Filed On: 18-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: TRIBHUVAN SACHDEVA
• Keywords: Income from undisclosed sources; Earning of tax free income; Set aside; Bogus
• Section: 143(3); 22; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE (CONDUCTED THROUGH VIRTUAL COURT) BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER& MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NOS.483&484/IND/2019 (ASSESSMENT YEARS: 2014-15&2015-16) ANIRUDDHA NYATI 102, BALAJI VIHAR, MAA DURGA NAGAR, INDORE VS. ITO-5(1), INDORE PAN NO.ADEPN0648N ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI TRIBHUVAN SACHDEVA, ADV. RESPONDENT BY : SHRI HARSHIT BARI, SR. DR DATE OF HEARING 18.08.2021 DATE OF PRONOUNCEMENT 22.09.2021 O R D E R PER MS. MADHUMITA ROY - JM: BOTH THE APPEALS FILED BY THE SAME ASSESSEE ARE DIR ECTED AGAINST THE ORDER BOTH DATED 14.01.2019 PASSED BY THE LD. CIT(A )-II, INDORE ARISING OUT OF THE SEPARATE ORDERS DATED 23.12.2016 & 10.10.201 7 PASSED BY THE ITO- 5(1), INDORE UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR A.Y. 2014-15 & 2015-1 6 RESPECTIVELY. 2. THE MATTER RELATES TO DISALLOWANCE OF EXEMPTION UNDER SECTION 10(38) OF THE ACT IN RESPECT OF LONG-TERM CAPITAL GAIN ARI SING FROM SALE OF EQUITY SHARES OF M/S. SUN RISE ASIAN LTD. (LISTED ON BOMBA Y STOCK EXCHANGE) TREATING IT INCOME FROM UNDISCLOSED SOURCES. ITA NOS.483&484/IND/2019 ANIRUDDHA NYATI VS. ITO ASST.YEARS 2014-15 & 2015-16 - 2 3. ITA NO. 483/IND/2019 A.Y. 2014-15 IS TAKEN AS TH E LEAD CASE. THE BRIEF FACTS LEADING TO THE CASE IS THIS THAT T HE ASSESSEE FILED ITS RETURN OF INCOME ON 16.07.2014 SHOWING INCOME AT RS . 5,32,280/-. THE ASSESSEE HAS SHOWN LTCG AT RS. 23,67,269/- AND CLAI MED EXEMPTION UNDER SECTION 10(38) OF THE ACT. THE ASSESSEE HAS PURCHA SED 7500 SHARES OF M/S. SUN RISE ASIAN FOR F.Y. 2012-13 FROM KONART TRADERS LTD. FOR TOTAL COST OF RS. 1,50,000/- ON 13.09.2011 AS PER THE BILL ISSUED BY THE KONART TRADERS LTD. THE ASSESSEE WAS ENGAGED IN THE INTRA-DAY TRA DING OF SHARES THROUGH BROKERS NAMELY SWASTIKA INVEST MART LTD. IT IS THE CASE OF THE ASSESSEE THAT THE EQUITY SHARES WERE HOLD FOR MORE THAN 12 MONTHS AND THE SALE ALSO TOOK PLACE ON A RECOGNIZED STOCK EXCHANGE. SHARES WERE TRANSFERRED FROM DEMAT ACCOUNT THEREBY FULFILLING ALL THE CONDITIONS PROVI DED UNDER SECTION 10(38) OF THE ACT. ON THE BASIS OF THE INFORMATION AVAILA BLE FROM THE THIRD SOURCES INCLUDING THE OUTCOME OF SEARCH & SURVEY ACTION OF VARIOUS BROKERS OF STOCK EXCHANGE ACROSS THE COUNTRY AND UPON THE FIND ING OF THE INVESTIGATION WING ABOUT BOGUS ENTRIES AND MANIPULATION THROUGH P ENNY STOCK COMPANIES, THE LD. AO CONCLUDED THAT M/S. SUNRISE A SIAN LTD. (SAL) IS A PENNY STOCK COMPANY AND THE LONG TERM CAPITAL GAIN ARISING OUT OF THE SALE THE STRIVE COMPANY IS AN ACCOMMODATION ENTRY TAKEN FOR CONVERTING UNACCOUNTED MONEY INTO EXEMPT INCOME. THE CLAIM OF EXEMPTION TO THE TUNE OF RS. 23,67,269/- WAS, THEREFORE, DENIED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE WHICH WAS, IN TURN, CONFIRMED BY TH E FIRST APPELLATE AUTHORITY AND HENCE THE INSTANT APPEAL BEFORE US. 4. WE HAVE HEARD THE RESPECTIVE PARTIES AND PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. ITA NOS.483&484/IND/2019 ANIRUDDHA NYATI VS. ITO ASST.YEARS 2014-15 & 2015-16 - 3 5. IT APPEARS FROM THE RECORD THAT THE 7500 EQUITY SHARES AT RS. 20 EACH ON 17.09.2011 OF M/S. SUN RISE ASIAN LTD. (SAL) WAS PURCHASED FROM KONART TRADERS LTD. FOR TOTAL COST OF RS. 1,50,000/ - THROUGH BROKER NAMELY SWASTIKA INVESTMENT LTD. SUCH WERE PURCHASED IN PH YSICAL FORM THROUGH BANKING CHANNEL. THE SHARES WERE LODGED FOR DEMATE RIALIZATION WITH STOCK HOLDING CORPORATION ON 14.01.2013 AND THE SAME WERE DULY DEMATERIALIZED IN ITS COURSE OF TIME. THE SAME WAS SOLD DURING F. Y. 2013-14 THROUGH SWASTIKA INVESTMENT LTD. WHEN THE SALE PRICE OF SUC H SHARE WAS RS. 490/-. FINALLY THE APPELLANT CLAIMED FOR EXEMPTION UNDER S ECTION 10(38) OF THE ACT TO THE TUNE OF RS. 23,67,269/-. IT APPEARS AS ALSO SUBMITTED BY THE LD. COUNSEL AP PEARING FOR THE ASSESSEE THAT THE ISSUE IS SQUARELY COVERED IN A SE RIES OF JUDGMENTS PASSED BY THE COORDINATE BENCH IN ITA NO. 203/IND/2019, IT A NO. 703TO705/IND/2018 & 488/IND/2019 FOR A.Y. 2014-15 W HEREIN THE SCRIPS OF (SAL) LISTED AT BSE HAS BEEN HELD TO BE A GENUINE T RANSACTION, NEITHER A PENNY STOCK NOR A PAPER COMPANY. IN FACT, THE IDEN TICAL ISSUE WAS ALSO DECIDED IN FAVOUR OF THE ASSESSEE BY ALLOWING THE E XEMPT LONG TERM CAPITAL GAIN ARISING OUT OF THE SALE OF SHARES OF THE SAID COMPANY BY THE ITAT MUMBAI BENCH IN THE CASE OF DIPESH RAMESH VARDHAN V S. DCIT IN ITA NO. 764/MUM/2019 ON 11.08.2020 AND THE COORDINATE BENCH OF JAIPUR IN THE CASE OF ASHOK AGRAWAL & OTHERS IN ITA NO. 124/JP/20 20 ON 18.11.2020. WHILE THE COORDINATE BENCH ALLOWING THE APPEAL PRE FERRED BY THE ASSESSEE ON THE SIMILAR ISSUE IN ITA NO. 203/IND/2019, 703 T O 705/IND/2018 AND 488/IND/2019 RELIED UPON THE JUDGMENTS PASSED BY TH E TWO AFORESAID ITA NOS.483&484/IND/2019 ANIRUDDHA NYATI VS. ITO ASST.YEARS 2014-15 & 2015-16 - 4 BENCHES. THE COORDINATE BENCH WAS PLEASED OF OBSER VED THE FOLLOWING WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE: - 16. WE THEREFORE IN THE LIGHT OF THE ABOVE DISCUSS ION AND IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULL Y FOLLOWING THE JUDGMENT OF THE CO-ORDINATE BENCHES IN CASES REFERRED (SUPRA) C ONSISTENTLY HOLDING THAT SUNRISE ASIAN LIMITED IS NEITHER A PENNY STOCK NO R A PAPER COMPANY, ARE OF THE CONSIDERED VIEW THAT AS ALL THE FIVE ASSESSEE(S ) NAMELY KUMARI AYUSHI NYATI ,SMT. VIJAY NYATI, SHRI VIJAY KUMAR RADHESHYA M NYATI (HUF), SHRI MANISH KUMAR RADHESHYAM NYATI (HUF), SMT. MAMTA NYA TI HAVE DISCHARGED NECESSARY ONUS CASTED UPON THEM IN TERMS OF CLAIM O F EXEMPTION OF LONG TERM CAPITAL GAIN U/S 10(38) OF THE ACT BY ESTABLISHING THE GENUINENESS OF TRANSACTION OF PURCHASE AND SALE OF SHARES AND SATI SFYING THE REQUISITE CONDITIONS SPECIFIED THEREIN AND THE LONG TERM CAPI TAL GAIN SO ARISEN HAS BEEN RIGHTLY CLAIMED AS EXEMPT U/S 10(38) OF THE AC T. SINCE WE HAVE HELD THE TRANSACTION OF LONG TERM CAPITAL GAIN AS GENUINE NO ADDITION FOR ESTIMATED BROKERAGE EXPENSE OF RS.72,281/- IS THUS CALLED FOR IN THE CASE OF MISS. AYUSHI NYATI. WE THEREFORE ALLOW THE COMMON ISSUES RAISED IN ALL THE INSTANT APPEALS IN FAVOUR OF THE ASSESSEE(S) AND SET ASIDE THE ORDE R OF LD. CIT(A) AND ALLOW THE CLAIM OF LTCG EXEMPTION U/S 10(38) OF THE ACT F ROM SALE OF EQUITY SHARES OF SAL AND DELETE THE FOLLOWING ADDITIONS:- S.NO. NAME AMOUNT 1 MS. AYUSHI NYATI RS. 36,14,053/- 2 SMT. VIJAYA NYATI RS. 33,98,387/- 3 SHRI VIJAY KUMAR RADHESHYAM NYATI HUF RS. 35,01,004/- 4 SHRI MANISH KUMAR RADHESHYAM NYATI HUF RS. 33,25,952/- 5 SMT. MAMTA NYATI RS. 35,99,598/- 17. ACCORDINGLY ALL THE GROUNDS RAISED BY THE ASSES SEE(S) ARE ALLOWED. 18. IN THE RESULT APPEALS OF THE ASSESSEE(S) NAMELY KUMARI AYUSHI NYATI (ITA NO.203/IND/2019), SMT. VIJAY NYATI (ITA NO.703/IND/ 2018), SHRI VIJAY KUMAR RADHESHYAM NYATI (HUF) (ITA NO.704/IND/2018), SHRI MANISH KUMAR RADHESHYAM NYATI (HUF) (ITA NO.705/IND/2018), SMT. MAMTA NYATI (ITA NO.488/IND/2019), ARE ALLOWED. ITA NOS.483&484/IND/2019 ANIRUDDHA NYATI VS. ITO ASST.YEARS 2014-15 & 2015-16 - 5 6. WE FIND THAT THE FACTS MENTIONED IN THE JUDGMENT S ABOVE REFERRED IS SIMILAR TO THAT OF THE FACTS NARRATED IN THE APPEAL BEFORE US AND, THUS, IN THE ABSENCE OF ANY CHANGED CIRCUMSTANCES RESPECTFULLY R ELYING UPON THE SAME WE ALLOW THE APPEAL PREFERRED BY THE ASSESSEE. ITA NO. 484/IND/2019 (A.Y. 2015-16):- 7. THE IDENTICAL ISSUE INVOLVED IN THE CASE HAS ALR EADY BEEN DEALT WITH BY US IN ITA NO.483/IND/2019 FOR A.Y. 2014-15 AND I N THE ABSENCE OF ANY CHANGED CIRCUMSTANCES THE SAME SHALL APPLY MUTATIS MUTANDIS. HENCE, THE APPEAL PREFERRED BY THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 22/09 /2021 SD/- SD/- (MANISH BORAD) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 22 /09/2021 TANMAY, SR. PS TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. () / THE CIT(A)- 5. , ! ', #$%% / DR, ITAT, INDORE 6. &' () / GUARD FILE. / BY ORDER, (DY./ASSTT.REGISTRAR) ITAT, INDORE