Parasben Kasturchand Kochar, Ahmedabad V. ITO, Ward-1(2)(5), Ahmedabad

ITA 549/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4437 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-02-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 08-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K GOYAL
• Assessee Lawyers: P D SHAH
• Keywords: Earning of tax free income
• Section: 143(3); 234B; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 549/AHD/2018 (ASSESSMENT YEAR: 2014-15) PARASBEN KASTURCHAND KOCHAR MEHTA LODHA & CO. CHARTERED ACCOUNTS 105, SAKAR-1, NEAR GANDHIGRA RAILWAY STATION, OFF ASHRAM ROAD, AHMEDABAD-380009 V/S INCOME TAX OFFICER, WARD- 1 (2)(5), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: ACKPK 8214G APPELLANT BY : SHRI P.D. SHAH, AR RESPONDENT BY : SHRI N.K. GOYAL, SR. D.R. ( )/ ORDER DATE OF HEARING : 18 -02-202 0 DATE OF PRONOUNCEMENT : 20-02-2020 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A)-10, AHMEDABAD DATED 22.02.2018 PERTAINING TO A.Y. 2014-15 AND FOLLOWING GROUNDS HAVE BEEN TAKEN: ITA NO . 549 /AHD/2018 . A.Y. 2014-15 2 1.THAT LD.CIT(A) HAS ERRED IN LAW AND FACTS BY NOT QUASHING THE ORDER PASSED UNDER SECTION 143(3) OF THE ACT AND THEREFORE THE ORDER PASSED BY THE LEARNED AO IS REQUIRED TO BE QUASHED AND THE ADDITION MADE THEREIN SHOULD BE DELETED IN FULL AND THEREFORE THE LEARNED AO IS TO BE DIRECTED TO ACCEPT THE RETURNED INCOME. 2.THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND FACT S BY NOT DELETING THE ADDITION OF RS.9,70,468/- MADE UNDER SECTION 68 OF THE ACT AND T HEREFORE, THE ADDITION MADE BY THE ID.AO SHOULD BE DELETED IN FULL WHILE COMPUTING THE TOTAL INCOME. 3.THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND FACT S BY REJECTING THE CLAIM OF EXEMPT INCOME OF LONG TERM CAPITAL GAIN U/S SEC 10(38) OF THE ACT AND THEREFORE THE LEARNED AO SHOULD BE DIRECTED TO ALLOW THE SAID CLAIM OF RS. 9,70,468/- UNDER SECTION 10(38) OF THE ACT WHILE COMPUTING THE TOTAL INCOME. 4. THAT THE LEARNED C1T(A) HAS ERRED IN LAW AND FA CTS BY NOT ALLOWING APPEAL FOR THE DETERMINATION OF THE AMOUNT OF THE INTEREST UNDER S ECTION 234B OF THE ACT AND THEREFORE THE ID.AO BE DIRECTED TO CALCULATE CORRECT INTEREST UNDER SEC TION 234B OF THE ACT. 5. THAT THE APPELLANT CRAVES LIBERTY TO ADD, AMEN D, ALTER AND DELETE ANY GROUNDS OF APPEAL BEFORE THE FINAL HEARING. 2. FACTS OF THE CASE ARE THAT THE ASSESSEE IN THE BUSI NESS OF TRADING IN SHARE AND ALSO EARNING INCOME FROM INTEREST ETC. THE INVESTIG ATION WING OF THE DEPARTMENT NOTICE SUSPICIOUS TRANSACTION RELATING T O LONG TERM CAPITAL GAIN ON SHARES OF ALPHA GRAPHIC INDIA LTD. WHERE ASSESSEE H AS SOLD 12,784 SHARES OF AND 8,750/- SHARES OF BLAZON MARBLES AT RS. 3,86,9 96/- RESULTING INTO LONG TERM CAPITAL GAIN OF RS. 9,70,468/-. THE ASSESSEE H AS CLAIMED LONG TERM CAPITAL GAIN OF RS. 24,29,998/- ON SALE OF DIFFERENT SHARES INCLUDING THE SHARES OF THE ABOVE TWO COMPANIES. 3. THE ASSESSING OFFICER AFTER RECEIVING INFORMATION F ROM THE INVESTIGATION WING ISSUED NOTICE TO THE ASSESSEE ALLEGING THAT ASSESSE E HAS CARRIED OUT ON BOGUS PENNY STOCK AND BOOKING OF BOGUS LTCG. 4. IN RESPONSE TO THE NOTICE, ASSESSEE SUBMITTED PURCH ASE BILL, SALES BILLS, COPY OF DEMAT STATEMENT ETC. AND REITERATED THAT THE ASSESS EE HAS NOT CARRIED OUT ANY ITA NO . 549 /AHD/2018 . A.Y. 2014-15 3 BOGUS PENNY STOCK TRANSACTION AND EARNED BOGUS LONG TERM CAPITAL GAIN CLAIMED U/S. 10(38) OF THE ACT. 5. BUT LD. A.O. DID NOT AGREE WITH THE CONTENTION OF T HE ASSESSEE AND MADE AN ADDITION OF RS. 9,70,468/-. 6. AGAINST THE SAID ORDER, ASSESSEE PREFERRED FIRST ST ATUTORY APPEAL BEFORE THE LD. CIT(A) WHO CONFIRMED THE ACTION OF THE A.O. HOLDING THAT ALPHA GRAPHIC INDIA LTD. AND BLAZON MARBLES COMPANY DID NOT HAVE CREDENTIALS AND BOTH COMPANIES WERE BOGUS COMPANY AND CONFIRMED THE ACTI ON OF THE LD. A.O. 7. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMPUGN ED ORDER AND HEARD BOTH THE PARTIES. ASSESSEE SUBMITTED THAT HE IS A CUSTOM ER OF ICICI BANK AND HAVING DEMAT ACCOUNT OF ICICI SECURITIES LTD. AND H E HAS PURCHASED SHARES THROUGH ICICI SECURITIES LTD. AND MONEY HAS BEEN PA ID THROUGH BANKING CHANNEL. COPIES OF BANK STATEMENT AND DEMAT ACCOUN T HAVE BEEN SUBMITTED BEFORE THE LOWER AUTHORITIES. 8. LD. A.R. ALSO DRAWN OUR ATTENTION TOWARDS THE STATE MENT OF EDELWEISS BROKING LTD. THROUGH THE SAID COMPANY SHARES WERE SOLD AND ALSO SHOWN US COPY OF THE CONTRACT NOTE AND ALL THESE DETAILS WERE FURNISHED BEFORE THE LOWER AUTHORITIES. THE ASSESSEE HAS EARNED LONG TERM CAPITAL GAIN FROM THE SALE OF COMPANIES SHARE I.E. ALPHA GRAPHIC INDIA LTD. AND BLAZON MAR BLES. 9. IN OUR CONSIDERED OPINION, IN SUCH CASE ASSESSEE CA NNOT BE HELD THAT HE EARNED LONG TERM CAPITAL GAIN THROUGH BOGUS COMPANY WHEN H E HAS DISCHARGED HIS ITA NO . 549 /AHD/2018 . A.Y. 2014-15 4 ONUS BY PLACING ALL THE RELEVANT DETAILS AND SOME O F THE SHARES ALSO REMAINED IN THE ACCOUNT OF THE APPELLANT AFTER EARNING OF THE L ONG TERM CAPITAL GAIN. 10. LD. A.R. CONTENTION IS THAT NO STATEMENT OF THE INV ESTIGATION WING WAS GIVEN TO THE ASSESSEE WHICH HAS ANY REFERENCE AGAINST THE AS SESSEE. 11. IN SUPPORT OF ITS CONTENTION, LD. A.R. ALSO CITED A N ORDER OF CO-ORDINATE BENCH IN ITA NO. 62/AHD/2018 IN THE MATTER OF MOHAN POLYF AB PVT. LTD. VS. ITO WHEREIN ITAT HAS HELD THAT A.O. SHOULD HAVE GRANTED AN OPPORTUNITY TO CROSS EXAMINE THE PERSON ON WHOSE STATEMENT NOTICE WAS IS SUED TO THE ASSESSEE FOR BOGUS LONG TERM CAPITAL GAIN. BUT IN THIS CASE, NEI THER STATEMENT WAS SUPPLYING TO THE ASSESSEE NOR CROSS EXAMINATION WAS ALLOWED B Y THE LD. A.O. THEREFORE, IN OUR CONSIDERED OPINION, ASSESSEE HAS DISCHARGED HIS ONUS AND NO ADDITION CAN BE SUSTAINED IN THE HANDS OF THE ASSESSEE. 12. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN OPEN COURT ON 20 - 02- 2020 SD/- SD/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 20 /02/2020 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD