Mrs. Amit Gupta, Kolkata V. D.C.I.T,C.C-XXVII, Kolkata, Kolkata

ITA 502/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91987 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 11-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MADHU MALATI GHOSH
• Assessee Lawyers: S K TULSIYAN
• Keywords: Penny stocks
• Section: 68; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA BEFORE SHRI P.K. BANSAL , ACCOUNTANT MEMBER ITA NO. 500 - 502 /KOL/ 2013 ASSESSMENT YEAR: 2005 - 06 ASHOK KUMAR GUPTA, L/R OF MRS. KAMALA DEVI AGARWAL (DECEASED), 208, M.G. ROAD, KOLKATA 700 007 [ PAN NO.A CIPA 8841 K ] MR. ASHOK KUMAR GUPTA, 113A, MANOHAR DAS CHOWK, KOLKATA 700 007 [ PAN NO. ADNPG 3903 A ] MRS. AMITA GUPTA 6, SARAT BOSE ROAD, LANSDOWN HEIGHTS, KOLKATA 700 020 [ PAN NO.ADYPG 4038 K ] / V/S . / V/S . / V/S . DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - XXVII, KOLKATA DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - XXVII, KOLKATA DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - XXVII, KOLKATA / APPELLANT .. / RESPONDENT / BY ASSESSEE SHRI S.K.TULSIYAN, ADVOCATE / BY RE V EN UE SMT. MADHUMALATI GHOSH, JCIT, SR - DR / DATE OF HEARING 02 - 06 - 2015 / DATE OF PRONOUNCEMENT 02 - 06 - 215 / O R D E R SINCE ALL THESE THREE APPEALS FILED BY THE RESPECTIVE ASSESSEE IN ALL THE COMMON ISSUE, THEREFORE, ALL THE APPEALS ARE DISPOSED OF BY THIS COMMON ORDER. ITA NO. 500 - 50 2 /KOL /2013 A.Y. 2005 - 06 ASHOK KR. GUPTA, MR. AMITA GUPTA V. DCIT, CC - XXVII KOL. PAGE 2 2. GROUND NO.2 NOT PRESSED IN ALL THE THREE APPEALS, HENCE, DISMISSED AS NOT PRESSED. GROUND NO.1 IS GENERAL IN NATURE DO NOT REQUIRE ANY ADJUDICATION. 3. THE ONLY COMMON ISSUE INVOLVED IN GROUNDS NO.3 & 4 WHICH ARE COMMON IN ALL THE THREE APPEALS RELATE TO THE ADDITION MADE U/S 68 OF THE INCOME TAX ACT, 1961 (HER EINAFTER REFERRED TO AS THE ACT ) IN RESPECT OF THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE ON THE SALE OF THE SHARES OF M/S CONTINENTAL FISCAL MANAGEMENT LIMITED (CFML FOR SHORT). BOTH THE PARTIES AGREED THAT ALL THESE APPEALS BE DISPOSED OF ON THE B ASIS OF THE FACTS INVOLVED IN THE CASE OF SHRI ASHOK KUMAR GUPTA IN ITA NO. 501/KOL/2013. I, THEREFORE DISPOSE OF ALL THE THREE APPEALS ON THE BASIS OF FACTS INVOLVED IN THE CASE OF SHRI ASHOK KUMAR GUPTA. 4. BRIEF FACTS ARE THAT ASSESSMENT IN THE CASE OF ALL THE ASSESSEE WERE RE - OPENED BY ISSUING THE NOTICE U/S 148 OF THE ACT FOR REASON THAT A SEARCH OPERATION U/S 132 OF THE ACT WAS CONDUCTED IN THE CASE OF SHRI NARENDRA KUMAR SHYAMSUKHA AT HIS RESIDENCE AND BUSINESS PREMISES ON 24 - 10 - 2006. THE PAGES NO. 7 TO 10 OF THE LOOSE PAPER BUNCH MARKED AS NKS/3 REVEALED THAT CERTAIN PERSONS INCLUDING THE ASSESSEE HAD LAUNDERED THEIR UNACCOUNTED MONEY IN THE GUISE OF LONG TERM CAPITAL GAINS (LTCG FOR SHORT) ON SALE OF PENNY STOCKS OF UNKNOWN COMPANIES. FROM THE SEIZ ED DOCUMENTS, IT WAS OBSERVED THAT SHRI SHYAMSUKHA HAD HELPED INCLUDING THE ASSESSEE IN CONVERTING THEIR CASH INTO CHEQUE BY WAY OF SALE AND PURCHASE OF SHARES OF CFML AND SWASTIK SECURITIES AND FINANCE LTD. A STATEMENT U/S. 132(4) OF SHRI NARENDRA SHYAMSU KHA WAS RECORDED IN WHICH HE STATED ABOUT THESE PAGES THAT THESE PAPERS CONTAINED DETAILS OF BOGUS LTCG TAKEN BY THE PERSONS MENTIONED THEREIN. THE SEIZED PAPERS CONTAINED THE NAMES OF THE PERSON IN RESPECT OF THE TRANSACTIONS OF 1,49,50,000/ - . HE FURTHER STATED THAT HE WAS ACTING AS INTERMEDIARY TO FACILITATE THE BOGUS TRANSACTIONS AND IN TURN, HE HAD EARNED @ 1% COMMISSION OF THE AMOUNT OF LTCG. THE CALCULATION OF COMMISSION IS ALSO RECORDED ON THE SALE DOCUMENT. THE SEIZED PAPER NO. 7 & 8 CONTAINED DETA ILS IN TABULAR HAVING DATE, NAME, BROKER NAME, NUMBER OF SHARES, CHEQUE AND CASH PAID. THE PAGES NO. 9 AND 10 OF NKS/3 CONTAINED DETAILS LIKE PARTY NAME, SCRIPT NAME, QUANTITY PURCHASE AND AMOUNT, SALE AMOUNT AND PROFIT ON SALE. THE AO ITA NO. 500 - 50 2 /KOL /2013 A.Y. 2005 - 06 ASHOK KR. GUPTA, MR. AMITA GUPTA V. DCIT, CC - XXVII KOL. PAGE 3 WAS OF THE OPINION T HAT THE NAME OF ALL THREE ASSESSEE APPEARED ON THESE PAPERS WHEN ENQUIRED OF THE ASSESSEE, THE ASSESSEE STATED THAT HE DID NOT KNOW BY THE PERSON OF SRI NARENDRA SHYAMSUKHA, THE BROKER, THROUGH WHOM TRANSACTION OF PURCHASE AND SALE WAS CONDUCTED THE KNOWIN G SRI NARENDRA SHYAMSUKHA BUT THE AO WAS OF THE VIEW THAT THE TRANSACTION APPEARING ON THE SEIZED PAPERS EXACTLY TALLIED WITH THE DETAILS OF THE LTCG RETURNED BY ALL THE ASSESSEE. THE AO THEREFORE MADE THE ADDITION U/S 68 OF THE ACT IN RESPECT OF SALE CONS IDERATION RECEIVED BY THE RESPECTIVE ASSESSEE. 5. THE ASSESSEE WENT IN APPEAL BEFORE CIT(A). THE CIT(A) CONFIRMED THE ADDITION. 6. I HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH ORDERS OF THE TAX AUTHORITIES BELOW. I NOTE D THE FACT IN EACH OF THE CASE S , THE SHARES WHICH HAS BEEN SOLD BY THE ASSESSEE WERE BROUGHT DURING THE FINANCIAL YEAR 2002 - 03 AND WERE SHOWN IN THE BALANCE - SHEET AS ON 31 - 03 - 2003 AND 31 - 03 - 2004 . THE SHARES WERE SOLD ONLY DURING THE IMPUGNED ASSESSMENT YEAR. THE SHARES WERE PURCHASED BY MAKING THE PAYMENT THROUGH ACCOUNT PAYEE CHEQUE. SIMILARLY, THE SHARES WERE SOLD BY RECEIV ING OF THE ACCOUNT PAYEE CHEQUE THROUGH THE BROKER AHILYA COMMERCIAL PVT. LTD . IT IS NOT THE CASE THAT THE SHARES WERE BOUGHT OR SOLD THROUGH CASH. THE STATEM ENT OF BROKER CMFL WAS ALSO RECORDED BUT HE DENIED THAT HE KNOWS SHRI NARENDRA KUMAR SHYAMSUKHA. THE PRESUMPTION AVAILABLE U/S.292C OF THE ACT RELIED ON BY THE LD. DR ARE AVAILABLE AGAINST THE PERSON IN WHOSE POSSESSION THE BOOKS OF ACCOUNT OTHER DOCUMENTS ETC., WERE FOUND. THE PRESUMPTION IS NOT AVAILABLE AGAINST THE THIRD PARTY AND TRANSACTIONS ARE THROUGH DEMAT ACCOUNT. THE ASSESSEE FILED ALL THE DOCUMENTS AND THESE PURCHASES WERE MADE BY THE ASSESSEE THROUGH ACCOUNT PAYEE CHEQUE HAVE NOT BEEN DOUBTED BY THE REVENUE. THE ACTION U /S. 68 OF THE ACT HAS BEEN TAKEN ON THE BASIS OF THE STATEMENT OF THE THIRD PARTY. DURING THE COURSE OF SEARCH AT THE PREMISES OF SHRI NARENDRA KUMAR SHYAMSUKHA NO IOTA OF EVIDENCE WAS FOUND WHICH COULD PROVE / LEAD TO ANY INFEREN CE THAT ASSESSEE HAD PAID CASH TO SHYAMSUKHA OR THE CHEQUE HAS BEEN RECEIVED OR PAID TO THE BROKER IN LIEU OF CASH EXCEPT A STATEMENT WHICH IS NOT IN THE HANDWRITING OF THE ASSESSEE AND WHICH CONTAINS NUMEROUS DETAILS. NO ACTION HAS BEEN TAKEN BY THE ITA NO. 500 - 50 2 /KOL /2013 A.Y. 2005 - 06 ASHOK KR. GUPTA, MR. AMITA GUPTA V. DCIT, CC - XXVII KOL. PAGE 4 REVEN UE IN TREATING THE PURCHASE TO BE THE BOGUS. UNDER THESE FACTS AND CIRCUMSTANCES, I AM OF THE VIEW THAT IT IS NOT THE CASE WHERE THE ADDITION U/S. 68 OF THE ACT COULD BE MADE. THE ASSESSEE DULY PROVED THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE B ROKER AS WELL AS THAT ASSESSEE RECEIVED THE CONSIDERATION ON THE SALE OF THE SHARES FROM THE BROKER. I, ACCORDINGLY SET ASIDE THE ORDER OF CIT(A). 7. IN THE RESULT, ALL THE APPEALS FILED BY THE RESPECTIVE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 02 / 06 /201 5 SD/ - ( P.K. BANSAL ) ACCOUNTANT MEM BER KOLKATA, *DKP - 02 / 06 /201 5 / COPY OF ORDER FORWARDED TO: - 1 . / APPELLANT ASHOK KR. GUPTA, L/R MRS. KAMALA DEVI AGARWAL 208, M.G.RD. KOL - 07 MR. ASHOK KR. GUPTA, 113A, MANOHAR DAS CHOWK, KOL - 07 MRS. AMITA GUPTA, 6, S.B. ROAD, LANSDOWN HEIGHTS, KOL - 20 2 . / RESPONDENT DCIT, CENTRAL CIRCLE - XXVII, KOLKATA 3 . / CONCERNED CIT 4 . - / CIT (A) 5 . , / DR, ITAT, KOLKATA 6 . / GUARD FILE. BY ORDER/ , /TRUE COPY/ / ,