ALOK KUMAR RAJGARHIA, NEW DELHI V. ACIT, CIRCLE- 32(1), NEW DELHI

ITA 5061/DEL/2018

• Counselvise Citation: [2019] 114 COUNSELVISE.COM (IT) 2216 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 20-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADIP SINGH GAUTAM
• Keywords: Opportunity of being heard; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 5061/DEL/2018 ASSESSMENT YEAR: 2015-16 ALOK KUMAR RAJGARHIA, VS. ACIT, CIRCLE-32(1), FARM NO. 6A, GOBIND SADAN ROAD, E-2 BLOCK, GADAIPUR FARMS, CIVIC CENTRE, MEHRAULI, NEW DELHI 2 NEW DELHI (PAN: DYPR6379Q) (ASSESSEE) (RESPONDENT) ASSESSEE BY : SH. MAYANK PATWARI, CA REVENUE BY : SH. PRADIP SINGH GAUTAM, SR. DR. ORDER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 26.4.2018 PASSED BY THE LD. CIT(A)-11, NEW DELHI RE LATING TO ASSESSMENT YEAR 2015-16 ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE APPELLATE ORDER PASSED BY COMMISSIONER OF INCOME TA X (APPEALS)-11, NEW DELHI (HERE IN AFTER REFERRED TO AS 'CIT(A)') IS BAD BOTH IN LAW AND ON FACTS). 2. THE CIT (A) HAS ERRED IN ASSUMING THAT THE APPEL LANT IS ENGAGED IN TRADING OF SHARES AND DERIVATIVES, WI THOUT CONSIDERING THE FACT THAT THE APPELLANT IS ACTUALLY WORKING AS A WHOLE TIME DIRECTOR. 3. THE CIT (A) HAS BASED HIS JUDGMENT AND PASSED TH E ORDER SOLELY ON THE WRONG OBSERVATIONS AND ASSUMPTI ONS MADE BY THE ASSESSING OFFICER ('AO') WITHOUT APPRECIATING THE DOCUMENTS SUBMITTED BEFORE THE AO 2 AND BEFORE HIMSELF DURING THE ASSESSMENT/APPELLATE PROCEEDINGS. 4. THAT BOTH THE CIT (A) AND AO HAVE PASSED THE IMPUGNED ORDERS IGNORING THE SUBMISSIONS AND DOCUMENTS FURNISHED BY THE ASSESSEE THAT HE ACTED A S A NORMAL INVESTOR AND HELD THE SHARES AS INVESTMENT W ITH THE MOTIVE OF EARNING DIVIDEND INCOME AND THERE WAS NO MOTIVE OF CONVERTING INVESTING IN SHARES INTO A FULFLEDGED BUSINESS. 5. THAT THE AO ERRED IN ASSUMING THAT THE APPELLANT HAS HIMSELF CLAIMED TO BE ENGAGED IN TRADING OF SHARES, AND THE CIT (A) ALSO AGREED TO THIS WRONG FACT OF AO, EV EN IGNORING THE SUBMISSIONS MADE BY THE ASSESSEE BEFOR E THE AO THAT THE APPELLANT IS ENGAGED IN EMPLOYMENT A S A WHOLE TIME DIRECTOR. 6. THAT BOTH THE CIT (A) AND AO ERRED IN NOT APPRECIATING THE FACT THAT A WHOLE TIME EMPLOYEE OF THE COMPANY CANNOT BE ENGAGED AT THE SAME TIME IN ANY SORT OF BUSINESS ACTIVITY. 7. THAT THE INTENTION OF THE ASSESSEE HAD BEEN ONLY TO INVEST ITS SAVINGS IN SHARES AND SECURITIES FOR WEA LTH CREATION VIA PORTFOLIO MANAGERS. HOWEVER BOTH THE C IT (A) AND AO HAVE PASSED THE IMPUGNED ORDERS BASED UPON SOLE PRESUMPTION THAT THE FREQUENCY AND VOLUME OF THE TRANSACTIONS ARE SUCH THAT IT SHOULD BE TREA TED AS 'INCOME FROM BUSINESS' IGNORING THE SUBMISSIONS OF THE APPELLANT. 8. THAT THE APPELLANT CRAVES YOUR HONOR TO ADD, DEL ETE, SUBSTITUTE ANY' DURING THE COURSE OF APPELLATE PROCEEDINGS. 3 2. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASS ESSEE STATED THAT LD. CIT(A) HAS BASED HIS JUDGMENT AND PASSED THE ORDER SOLELY ON THE WRONG OBSERVATIONS AND ASSUMPTIONS MADE BY THE ASSESSING OFFICER WITHOUT APPRECIATING THE DOCUMENTS SUBMITTED BEFORE THE AO AND BEFORE HIMSELF DURING THE ASSESSMENT/APPELLATE PROCEEDINGS. HE FUR THER SUBMITTED THAT LD. CIT(A) AND AO HAVE PASSED THE IMPUGNED ORDERS I GNORING THE SUBMISSIONS AND DOCUMENTS FURNISHED BY THE ASSESSEE THAT HE ACTED AS A NORMAL INVESTOR AND HELD THE SHARES AS INVESTMENT W ITH THE MOTIVE OF EARNING DIVIDEND INCOME AND THERE WAS NO MOTIVE OF CONVERTING INVESTING IN SHARES INTO A FULLFLEDGED BUSINESS. HE FURTHER S UBMITTED THAT AO ERRED IN ASSUMING THAT THE ASSESSEE HAS HIMSELF CLAIMED T O BE ENGAGED IN TRADING OF SHARES, AND THE CIT(A) ALSO AGREED TO TH IS WRONG FACT OF AO, EVEN IGNORING THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE AO THAT THE ASSESSSEE IS ENGAGED IN EMPLOYMENT AS A WHOLE T IME DIRECTOR. THEREFORE, HE REQUESTED TO SET ASIDE THE ISSUES IN DISPUTE TO THE FILE OF THE LD. CIT(A) WITH THE DIRECTIONS TO DECIDE THE SAME A FTER CONSIDERING ALL THE EVIDENCES/ DOCUMENTS AND GIVE FULL ADEQUATE OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. 3. ON THE CONTRARY, LD. DR DID NOT RAISE ANY SERIO US OBJECTION ON THE REQUEST OF THE LD. COUNSEL FOR THE ASSESSEE. 4. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS AVAILABLE WITH ME ESPECIALLY THE IMPUGNED ORDER PASSED BY TH E LD. CIT(A). I FIND CONSIDERABLE COGENCY IN THE CONTENTION OF THE LD. C OUNSEL FOR THE ASSESSEE THAT LD. CIT(A) HAS PASSED THE ORDER WITHOUT APPREC IATING THE DOCUMENTS 4 SUBMITTED BEFORE THE LOWER AUTHORITIES. KEEPING IN VIEW OF THE FACT AND CIRCUMSTANCES OF THE CASE, THE ISSUES IN DISPUTE AR E SET ASIDE TO THE FILE OF THE LD. CIT(A) WITH THE DIRECTIONS TO DECIDE THE SA ME AFRESH, AFTER CONSIDERING ALL THE EVIDENCES/DOCUMENTS AND GIVE AD EQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ASSESSEE IS ALSO DIRE CTED TO FULLY COOPERATE WITH THE LD. CIT(A) AND DID NOT TAKE ANY UNNECESSAR Y ADJOURNMENT AND FILE ALL THE NECESSARY DOCUMENTARY EVIDENCES BEFORE HIM. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 20/11/2019. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 20/11/2019 SRB COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES