ITO, Ward - 9(2), Kolkata, Kolkata V. Smt. Bijaya Ganguly, Kolkata

ITA 624/KOL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100122 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2015
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 25-04-2011
• Court: TRIBUNAL
• Department Lawyers: D LAHIRI
• Assessee Lawyers: A K GHOSH
• Keywords: Income from undisclosed sources

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI M. BALAGANES H, AM] I.T.A NOS.624 & 625/KOL/2011 ASSESSMENT YEARS: 2004-05 & 2005-06 INCOME-TAX OFFICER, WD-9(2), KOLKATA. VS. SMT. BI JAYA GANGULY PAN: AGUPG7661H) ( APPELLANT ) ( RESPONDENT ) & I.T.A NO.635/KOL/2011 ASSESSMENT YEAR: 2004-05 INCOME-TAX OFFICER, WD-9(2), KOLKATA. VS. SMT. BI JAYA GANGULY, L/H OF LATE PRADIPLAL GANGULY, PAN: AEBPG4242B (APPELLANT) (RESPONDENT) DATE OF HEARING: 26.11.2015 DATE OF PRONOUNCEMENT: 26.11.2015 FOR THE APPELLANT: SHRI D. LAHIRI, JCIT, SR. DR FOR THE RESPONDENT: SHRI A. K. GHOSH, ADVOCATE ORDER PER SHRI MAHAVIR SINGH, JM: ALL THESE THREE APPEALS BY REVENUE ARE ARISING OUT OF SEPARATE ORDERS OF CIT(A)- VIII, KOLKATA IN APPEAL NOS.416, 415 & 417/CIT(A)-V III/KOL/2009-10 ALL DATED 22.12.2010. ASSESSMENTS WERE FRAMED BY ITO, WARD-9 (2), KOLKATA U/S. 147/143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) FOR ASSESSMENT YEARS 2004-05 AND 2005-06 VIDE HIS SEPARATE ORDERS DATED 23.12.20 09. 2. THE ONLY COMMON ISSUE IN THESE THREE APPEALS OF REVENUE IS AGAINST THE ORDER OF CIT(A) DELETING THE ADDITION MADE BY AO ON ACCOUNT OF PROFIT ARISING OUT OF SALE OF SHARES AS INCOME FROM UNDISCLOSED SOURCES AS AGAINS T DISCLOSED BY THE ASSESSEE AS CAPITAL GAINS. THE FACTS AND CIRCUMSTANCES ARE EXACTLY IDE NTICAL IN ALL THE THREE APPEALS AND HENCE, WE WILL TAKE THE FACTS FROM ITA NO. 624/K/20 11 FOR AY 2004-05 AND ADJUDICATE THE ISSUE. THE GROUNDS RAISED IN ITA NO. 624/K/201 1 BY THE REVENUE READ AS UNDER: 1. THAT THE LD. CIT(A) ERRED IN LAW AND IN FACT I N DELETING THE ADDITION OF RS.48,44,000I- MADE ON ACCOUNT OF DISALLOWANCE OF ASSESSEE'S CLAIM OF LONG TERM CAPITAL GAIN BY TREATING THE SAME AS ASSESSEE'S INCOME FROM UNDISCLOSED SOUR CE. 2. THAT LD. CIT(A) WHILE DECIDING THE ISSUE IN FAVO UR OF THE ASSESSEE FAILED TO APPRECIATE THE FACT THAT THE ALLEGED TRANSACTIONS WERE MADE WITH A BROKER INVOLVED IN CREATING AN ARTIFICIAL 2 ITA NOS.624, 625 & 635/K/2011 SMT. BIJAYA GANGULY. AY 2004-05 & 2005-06 MARKET OF THE SCRIPTS. THE COMPANIES IN WHICH INVES TMENTS WERE MADE WERE DEVOID OF FUNDAMENTALS AND THE ASSESSEE HAD NO SUCH PRIOR EXP ERIENCE OR BACK GROUND IN TRADING OF SHARES. 3. THAT THE LD. C.I.T.(A) ERRED IN LAW AND IN FACT IN DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE MERE RELYING ON THE DECISION OF HIS PREDEC ESSOR IN THE CASE OF KUMARI SHREYASHI GANGULY, THE DAUGHTER OF THE ASSESSEE AND IGNORED T HE FACT THAT THE ORDER OF HIS PREDECESSOR HAS ALREADY BEEN CONTESTED BY THE DEPARTMENT IN APP EAL BEFORE THE HON'BLE ITAT AND THE SAME IS STILL PENDING. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE DURIN G THE YEAR UNDER CONSIDERATION CLAIMED LONG TERM CAPITAL GAIN ARISING OUT OF SALE OF SHARES AT RS.48.44 LACS. THE ASSESSEES PORTFOLIO OF INVESTMENT COMPRISED OF SHA RES OF PSL FINANCE LTD. AND SANGOTRI CONSTRUCTION LTD. ACCORDING TO AO, HE HAS RECEIVED A REPORT FROM ADIT (INV.), DURGAPUR WHEREIN WHILE DISPOSING OF TAX EVASION PETITION NEC ESSARY ENQUIRIES WERE CONDUCTED WITH CALCUTTA STOCK EXCHANGE ASSOCIATION LTD. AND AS PER HIS REPORT DATED 04.08.2008 VIDE NO. ADIT(INV)/DGP/2008-09/23 STATED THAT THE CALCUTTA STOCK EXCHANGE ASSOCIATION LTD. VIDE THEIR LETTER NO.CSE/MSD/ITAX/1372-0806/3297 DA TED 17.06.2008 ADMITTED THAT NO SUCH TRANSACTION OF PSL FINANCE LTD. WAS EXECUTED B Y M/S. BADRI PRASAD & SONS, THE BROKER. SIMILAR IS THE POSITION IN RESPECT TO SANG OTRI CONSTRUCTION LTD. THAT THE ASSESSEE CLAIMED TO HAVE MADE PURCHASES THROUGH STOCK BROKER M/S. V. K. SINGHANIA & CO. OF CALCUTTA STOCK EXCHANGE ASSOCIATION LTD. AND IN TUR N THEY INTIMATED THAT NO SUCH TRANSACTION WAS EXECUTED BY M/S. V. K. SINGHANIA & CO. ACCORDING TO AO, BOTH THE TRANSACTIONS WERE FOUND TO BE INCORRECT AND ACCORDI NGLY, HE TREATED THE PROFIT ARISING OUT OF SHARES AS INCOME FROM OTHER SOURCES INSTEAD OF CAPI TAL GAINS. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO RELYING ON THE ORDER IN THE CASE OF SMT. SHREYASHI GANGULY, THE DAUGHTER OF THE ASSESSEE DELETED THE A DDITION MADE BY AO AS INCOME FROM OTHER SOURCES AND TREATED THE PROFIT ARISING OUT SA LE OF SHARES AS CAPITAL GAINS. AGGRIEVED AGAINST THE ACTION OF CIT(A) IN DELETING THE ADDITI ON, REVENUE CAME IN SECOND APPEAL BEFORE TRIBUNAL. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND FROM THE FACTS OF THE CASE AND PAPER BOOK THAT THE SHARES WERE TRANSACTED THROUGH THE SHARE BROKER, WHO ARE REGISTERED MEMBER S OF STOCK EXCHANGE. THE ASSESSEE HAS ALSO FILED COPY OF CONTRACT NOTES ISSUED BY BRO KERS. THE CONTRACT NOTES CONTAINED CONTRACT NOTE NUMBER, DATE OF TRANSACTION, SETTLEME NT NUMBER, SETTLEMENT PERIOD, NAME AND QUANTITY OF SHARES TRANSACTED ON BEHALF OF THE ASSE SSEE AND ALSO PAYMENTS ARE MADE BY 3 ITA NOS.624, 625 & 635/K/2011 SMT. BIJAYA GANGULY. AY 2004-05 & 2005-06 CHEQUES DIRECTLY TO THE SHARE BROKERS ACCOUNTS. W E HAVE GONE THROUGH THE CONTRACT NOTES AND FOUND THAT THE OBSERVATIONS OF THE AO THAT THE CONTRACT NOTES ARE DEVOID OF I D CARD OF CLIENT BUT THIS IS FACTUALLY INCORRECT WHEREAS THE CONTRACT NOTE CONTAINED COMPLETE I D CARD OF CLIENTS AND WHICH IS MANDATORY IN VIEW OF SEBI R EGULATIONS. FROM THE ABOVE FACTS, WE ARE OF THE VIEW THAT TRANSACTIONS OF SHARES ENTERED INTO BY THE ASSESSEE ARE EVIDENCED BY CONTRACT NOTE OF THE SHARE BROKER AND THESE BROKERS ARE DULY REGISTERED WITH SEBI AND THEIR REGISTRATION NUMBER IS MENTIONED ON THE CONTRACT NO TES. THE COMPLETE NAME OF THE CLIENT, ID OF THE ASSESSEE, DATE OF TRANSACTION, SETTLEMENT NUMBERS AND SETTLEMENT PERIOD IS MENTIONED ON THE CONTRACT NOTES. WE FURTHER FIND T HAT HONBLE CALCUTTA HIGH COURT IN ASSESSEES DAUGHTERS CASE IN THE CASE OF CIT VS. S MT. SHREYASHI GANGULY, GA NO. 2281 OF 2012, ITAT NO. 196 OF 2012 DATED 05.09.2012 HAS HELD AS UNDER: THE ASSESSING OFFICER HAS DOUBTED THE TRANSACTION SINCE THE SELLING BROKER WAS SUBJECTED TO SEBIS ACTION. HOWEVER, THE D-MAT ACCOUNT GIVEN THE STATEMENT OF TRANSACTIONS FROM 1.4.04 TO 31.3.2005 I.E.RELEVANT FOR THE ASSESSMENT YEAR UNDER APPEAL [2005-06] ARE BEFORE US. THERE CANNOT BE ANY DOUBT ABOUT THE TRANSACTION AS HAS BEEN OBSERVED BY THE ASSESSING OFFICER. THE TRANSACTIONS WERE AS PER NORMS UNDER C ONTROLLED BY THE SECURITIES TRANSACTION TAX, BROKERAGE SERVICE TAX AND CESS, WHICH WERE ALR EADY PAID. THEY WERE COMPLIED WITH. ALL THE TRANSACTIONS WERE THROUGH BANK. THERE IS NO IOTA OF EVIDENCE OVER THE ABOVE TRANSACTIONS AS IT WERE THROUGH D-MAT FORMAT. HENCE , WE AGREE WITH THE GIVEN FINDINGS OF THE LEARNED COMMISSIONER OF THE INCOME-TAX (APPEALS ) IN ACCEPTING THE TRANSACTIONS AS GENUINE TOTO. IN VIEW OF THE FACT FINDINGS WE CANN OT RE-APPRECIATE, RECORDING IS SUCH, CANNOT BE SAID TO BE PERVERSE AS IT IS NOT FACT FIN DING OF THE LEARNED TRIBUNAL ALONE. THE COMMISSIONER OF INCOME TAX CAME TO THE SAME FACT FI NDING. CONCURRENT FACT FINDING ITSELF MAKE THE STORY OF PERVERSITY, UNBELIEVABLE. AND THE APPEAL WAS PREFERRED ON THE SAME POINT. THAT WAS DISMISSED IN VIEW OF THE DECISIONS RENDERE D IN THE FIRST MENTIONED APPEAL ON THE IDENTICAL POINT. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE AR E OF THE VIEW THAT THE CIT(A) HAS RIGHTLY TREATED THE TRANSACTIONS AS GENUINE AND PRO FIT ARISING OUT OF THE SAME, I.E. OUT OF SALE AND PURCHASE OF SHARES IS RIGHTLY TREATED AS C APITAL GAINS. HENCE, WE CONFIRM THE ORDER OF CIT(A) ON THIS ISSUE. ALL THESE THREE APPE ALS OF REVENUE ARE IDENTICAL ON FACTS AND CIRCUMSTANCES. HENCE, ALL THE THREE APPEALS OF REV ENUE ARE DISMISSED. 5. IN THE RESULT, ALL THE APPEALS OF REVENUE ARE DI SMISSED. 6. ORDER IS PRONOUNCED IN THE OPEN COURT. SD/- SD/- (M. BALAGANESH) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 26 TH NOVEMBER, 2015 JD. SR. P.S 4 ITA NOS.624, 625 & 635/K/2011 SMT. BIJAYA GANGULY. AY 2004-05 & 2005-06 COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT ITO, WARD-9(2), KOLKATA. 2 RESPONDENT SMT. BIJAYA GANGULY,275/276, BANGUR AVE NUE, BLOCK-A, KOLKATA-55. 3 . THE CIT(A), KOLKATA 4. 5. CIT KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .