ACIT CEN CIR 24, MUMBAI V. RANJEETSINGH BINDRA, MUMBAI

ITA 6254/MUM/2012

• Counselvise Citation: 625419914 RSA 2012
• Duration Of Justice: 2 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 27-10-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 11-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJUNATH SWAMY
• Keywords: Business income

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE HONBLE S/SHRI H.L. KARWA, PRESIDENT AND B. R.BASKARAN (AM) . . , . . , ./I.T.A. NO.6254 & 6255/MUM/2012 ( / ASSESSMENT YEAR :2005-06 & 2006-07) ASSTT. COMMISSIONER OF INCOME TAX, CC 21, ROOM NO.403,4 TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI-400020 / VS. SHRI RANJEETSINGH BINDRA, A-71, COZY HOME, 251, PALI HILL, BANDRA (W), MUMBAI-400050 ( / APPELLANT) .. ( / RESPONDENT) ./ ! ./ PAN/GIRNO.:AERPB2424A ' / REVENUE BY : SHRI MANJUNATH SWAMY # ' /ASSESSEE BY : NONE $ % # & ' / DATE OF HEARING : 27.10.2014 ()*+ # & ' /DATE OF PRONOUNCEMENT : 19.11.2014 / O R D E R PER B R BASKARAN, ACCOUNTANT MEMBER: THE APPEALS FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDERS PASSED BY LD CIT(A)-39, MUMBAI AND THEY RELATE TO THE ASSESSM ENT YEARS 2005-06 AND 2006-07. THE LONG TERM CAPITAL GAIN ASSESSED AS BU SINESS INCOME IN BOTH THE YEARS, HAVING BEEN DELETED BY LD CIT(A), THE REVENU E IS IN APPEAL BEFORE US. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE AND HENC E WE PROCEED TO DISPOSE OF THE APPEAL EX-PARTE, WITHOUT THE PRESENC E OF THE ASSESSEE. 3. WE HAVE HEARD LD D.R AND PERUSED THE RECORD. TH E FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE HAD PURCHASED 45000 SHA RES OF M/S RAMAKRISHNA FINCAP LTD ON 25.7.2003 IN AN OFF MARKET TRANSACTIO N. EARLIER, THE ASSESSEE HAD SOLD SHARES OF LIC HOUSING FINANCE AND SBI ON 25.6. 2003 AND EARNED SHORT TERM ITA NOS.6254 & 6255/MUM/2012 2 CAPITAL GAIN OF RS.1,12,430/- AND THE SAID PROCEEDS WERE UTILIZED TO PURCHASE THE SHARES OF M/S RAMAKRISHNA FINCAP LTD. THE ASSESSEE DEMATED THE SHARES ON 2.9.2004. SUBSEQUENTLY, THE ASSESSEE SOLD 12,000 SH ARES IN THE YEAR RELEVANT TO ASST. YEAR 2005-06 AND THE BALANCE QUANTITY OF SHAR ES WERE SOLD IN THE YEAR RELEVANT TO AY 2006-07. THUS, THE ASSESSEE EARNED LONG TERM CAPITAL GAIN OF RS.15,42,630/- AND RS.60,24,551/- RESPECTIVELY IN A Y 2005-06 AND 2006-07. THE ASSESSEE CLAIMED THE SAME AS EXEMPT IN BOTH THE YEA RS UNDER CONSIDERATION. THE SHARES OF M/S RAMAKRISHNA FINCAP LTD HAD BEEN D ESIGNATED AS PENNY STOCK AND ITS SHARES PRICES ALSO WENT UP AT ASTRON OMICALLY HIGH LEVEL. HENCE, THE AO DISBELIEVED THE SHARE TRANSACTIONS AND ASSESSED THE LONG TERM CAPITAL GAIN AS BUSINESS INCOME OF THE ASSESSEE IN BOTH THE YEAR S. THE LD CIT(A), HOWEVER, HELD THAT THE GAIN ARISING ON SALE OF SHARES OF M/S RAMAKRISHNA FINCAP LTD SHOULD BE ASSESSED AS LONG TERM CAPITAL GAIN ONLY A ND ACCORDINGLY DELETED THE ADDITION MADE BY THE AO. 4. ON A PERUSAL OF THE ORDER PASSED BY LD CIT(A), WE NOTICE THAT THE ASSESSEE HAS PROVED THE SOURCES FOR THE PURCHASE OF SHARES OF M/S RAMAKRISHNA FINCAP LTD AND ALSO FURNISHED BROKER BILL AND CONTR ACT NOTE IN SUPPORT OF THE SAME. THE BROKERS HAVE ALSO CONFIRMED THE FACT OF P URCHASE. SINCE IT WAS AN OFF MARKET TRANSACTION, THE PURCHASES WERE NOT AVAILABL E WITH THE STOCK EXCHANGE. THEREAFTER, THE ASSESSEE HAS DEMATED THE SHARES IN SEP, 2004 AND STARTED SELLING THE SHARES IN INSTALLMENTS FROM 4.11. 2004 TO 25.4.2005. ALL THE SALE HAVE BEEN CARRIED THROUGH STOCK EXCHANGE. THE LD CIT(A) HAVE ALSO NOTICED THAT THE PURCHASE OF SHARES HAVE BEEN DULY ACCOUNTED FOR IN THE BALANCE SHEET FILED ALONG WITH THE RETURN OF INCOME PERTAINING TO ASSES SMENT YEAR 2004-05 ON 1.11.2004. THE SALE TRANSACTIONS HAVE ALSO BEEN AC COUNTED FOR IN THE BOOKS. THE ASSESSEE HAS POINTED OUT THAT THE SHARE PRICE OF THE ABOVE SAID COMPANY HAS GONE UP FURTHER AFTER ITS SALE BY THE ASSESSEE. UNDER THESE SET OF FACTS, THE LD CIT(A) HELD THAT THE ASSESSING OFFICER HAS MEREL Y DISBELIEVED THE EVIDENCES FURNISHED BY THE ASSESSEE ONLY ON SURMISES AND SUS PICION. ACCORDINGLY HE ALLOWED THE APPEAL OF THE ASSESSEE IN RESPECT OF TH IS GROUND. 5. DURING THE COURSE OF HEARING BEFORE US, THE LD D.R COULD NOT PRODUCE ANY MATERIAL TO CONTRADICT THE FINDINGS GIVEN BY LD CIT (A). EVEN THOUGH THE LD D.R ITA NOS.6254 & 6255/MUM/2012 3 SUBMITTED THAT THE LD CIT(A) HAS ACCEPTED ADDITIONA L EVIDENCES, WE NOTICE THAT THE FIRST APPELLATE AUTHORITY HAS CONFRONTED THE SA ME WITH THE AO BY CALLING FOR A REMAND REPORT. LATER, THE LD CIT(A) HAS DECIDED T HE ISSUE IN BOTH THE YEARS IN FAVOUR OF THE ASSESSEE BY EXAMINING THE DOCUMENTS F ILED BY THE ASSESSEE. UNDER THESE SET OF FACTS, WE DO NOT FIND ANY INFIRM ITY IN THE VIEW TAKEN BY LD CIT(A). ACCORDINGLY, WE UPHOLD HIS ORDERS IN BOTH THE YEARS. 6. IN THE RESULT, BOTH THE APPEALS FURNISHED BY THE REVENUE ARE DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 19TH NOV, 2014 . ()*+ $ , -. / 0 19TH NOV, 2014 ) # 1% 2 SD SD ( . . / H.L. KARWA) ( . . , / B.R. BASKARAN ) / PRESIDENT / ACCOUNTANT MEMBER - $ % MUMBAI: 19TH NOV,2014. . 4 . ./ SRL , SR. PS !'#$ %$' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. $ 5& ( ) / THE CIT(A)- CONCERNED 4. $ 5& / CIT CONCERNED 5. 6. 67 1 4&489 , ' 89 + , - $ % / DR, ITAT, MUMBAI CONCERNED 1 : % / GUARD FILE. ; $ / BY ORDER, TRUE COPY < (ASSTT. REGISTRAR) ' 89 + , - $ % /ITAT, MUMBAI