Venkata Phaneendra Mohan Sharma Mudunuri, Chennai V. Dy. Commissioner of Income Tax , Circle-12(1), Hyderabad

ITA 640/Hyd/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2138 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 27-02-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 06-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A C ROUT
• Assessee Lawyers: K N NARAYANAN
• Keywords: Cost of acquisition; Revised return; Capital Gains
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B - SMC BENCH : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO. 6 4 0/HYD./201 8 ASSESSMENT YEAR: 2014 - 15 SH. VENKATA PHANEENDRA MOHAN SHARMA MUDUNURI VS. DCIT CHENNAI CIRCLE 12(1) PAN: AHDPM9097P (APPELLANT) (RESPONDENT) FOR ASSESSEE : SH. K. N.NARAYANAN , AR. FOR REVENUE : SH. A.C. ROUT , D.R. DATE OF HEARING : 0 7 /0 2 /2020 DATE OF PRONOUNCEMENT : 29 /0 4 /2020 O R D E R TH IS IS ASSESSEES APPEAL FOR A.Y. 2014 - 15 AGAINST THE ORDER OF LD.CIT(A) - I , HYDERABAD DATED 1 5.12.2017 . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE , AN INDIVIDUAL , FILED HIS RETURN OF INCOME FOR AY 2014 - 15 ON 28.07.2014 DECLARING TOTAL INCOME OF RS.24,63,010/ - . SUBSEQUENTLY , THE ASSESSEE FILED A REVISED RETURN OF INCOME ON 24.01.2016 BY DECLARING TOTAL INCOME OF RS.23,01,820/ - . THE RETURN WAS PICKED UP FOR SCRUTINY THROUGH CASS AND INSPITE OF ISSUANCE OF NOTICES U/S 143( 2 ) AND 14 2 (1) OF THE INCOME TAX ACT, 1961 (THE ACT) , NO NE APPEARED ON BEHALF OF ASSESSEE. SINCE THERE WAS NO RESPONSE, THE AO WAS CONSTRAINED TO COMPLETE THE ASSESSMENT U/S 144 OF THE ACT. THE AO OBSERVED THAT THE ASSESSEE HA D BEEN TRADING IN SHARES TRANSACTION TO THE TUNE OF RS.88,83,19,007/ - AND SINCE THE ASSESSEE DID NOT APPEAR AND PRODUCE SUFFICIENT PROOF AND DOCUMENTARY EVIDENCE, HE MADE ADDITION @ 0.1% OF THE TOTAL TRANSACTION WHICH WORKED OUT TO RS.8,88,319/ - AS INCOME FROM SHORT TERM CAPITAL GAIN. THE AO ALSO DISALLOWED CREDIT CARD EXPENSES OF RS.2, 70,000/ - AND DEDUCTION OF RS.1,15,000/ - CLAIMED UNDER CHAPTER - VI A OF THE ACT. ITA NO. 6 4 0 /HYD/201 8 AY: 2014 - 15 SRI VENKATA PHANEENDRA MOHAN SHARMA MUDUNURI 2 3. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE ORDER OF THE AO AS FAR AS DISALLOWANCE OF RS.8,83,319/ - TOWARDS SHORT TERM CAPITAL GAIN IS CONCE RNED, BUT GRANTED RELIEF BY DELETING THE DISALLOWANCE ON CREDIT CARD EXPENSES AND DISALLOWANCE OF DEDUCTION UNDER CHAPTER - VIA OF THE ACT. 4. AGGRIEVED , THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS OF APPEAL. 1) THE ORDER OF THE LEARNED C IT (A) - 1 IS CONTRARY TO THE FACTS OF THE CASE AND IS THEREFORE UNSUSTAINABLE. 2) THE LEARNED C IT(A) OUGHT NOT TO HAVE SUSTAINED THE ADDITION OF RS.8,83,319/ - MADE BY THE ASSESSING OFFICER AS SHORT TERM CAPITAL GAINS. THE C I T(A) - 1 OUGHT TO HAVE APPRECIATED THE FACT THAT THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER BEING 0.1 % OF TOTAL TRANSACTION AMOUNT WAS ARBITRARY, NOT BASED ON FACTS AND THEREFORE UNWARRANTED AND UNSUSTAINABLE. 3) THE LEARNED CIT(A) - 1 OUGHT TO HAVE AP PRECIATED THE FACT THAT THE APPELLANT HAD INCURRED SHORT TERM CAPITAL LOSS AS PER DETAILS FURNISHED BEFORE HER. 4) THE LEARNED C IT(A) - 1 OUGHT TO HAVE APPRECIATED THE FACT THAT THE APPELLANT HAD SOLD SHARES PURCHASED DURING THE YEAR AS WELL AS PURCHASED DURI NG EARLIER YEAR, AND OUGHT TO HAVE TAKEN INTO ACCOUNT THE PURCHASE COST OF THE LATTER WHICH WOULD HAVE RESULTED IN THE LOSS AS CORRECTLY CLAIMED BY THE APPELLANT. INSTEAD OF ASSESSING THE SHORT TERM LOSS, THE LEARNED ASSESSING OFFICER HAS MADE AN ARBITRARY ADDITION WHICH WAS UNWARRANTED AND OUGHT TO BE DELETED. FOR THE GROUNDS STATED ABOVE AND FOR THE GROUNDS THAT MAY BE PERMITTED TO BE ADDUCED AT THE TIME OF HEARING OF THE APPEAL IT IS PRAYED THAT THE ADDITION MADE BE DELETED AND JUSTICE RENDERED. 5. THE LD.COUNSEL FOR THE ASSESSEE , WHILE REITERATING THE SUBMISSIONS MADE BEFORE THE CIT(A) , SUBMITTED THAT THE DETAILS OF THE TRANSACTIONS IN SHARES WAS DONE THROUGH A REPUTED BROKER NAMELY M/S SHARE KHAN AND THE ASSESSEE HAD SUBMITTED THAT ALL TRANSACTIONS HAD SUFFERED SECURITY TRANSACTION TAX. HE SUBMITTED THAT ALL THE DETAILS WERE SUBMITTED BEFORE THE AO AS WELL AS THE CIT(A) BUT THE AO HAS NOT SHOWN AS TO HOW HE HAS ARRIVED ITA NO. 6 4 0 /HYD/201 8 AY: 2014 - 15 SRI VENKATA PHANEENDRA MOHAN SHARMA MUDUNURI 3 AT THE TRANSACTION VALUE OF RS.88,83,19,007/ - , NOR THE LOGIC BEHIND THE ADDITION OF 0.1% OF THE SAME. LD.COUNSEL FURTHER SUBMITTED THAT THE AO HAS NOT BROUGHT OUT HOW HE ARRIVED AT THE FINDING THAT THE LONG TERM CAPITAL LOSS IS NOT SUBSTANTIATED BY THE ASSESSEE. HE HAS FILED A PAPER BOOK GIVING DETAILS OF ALL THE TRANSACTIONS AND PRAYED FOR REMANDING THE ISSUE TO AO FOR RE - CONSIDERATION OF THE SAME ON MERITS. 6 . THE LD.DR WAS ALS O HEARD . 7 . HAVING REGARD TO RIVAL CONTENTIONS AND MATERIAL PLACED ON RECORD, I FIND THAT THE ASSESSEE HAS GIVEN THE DETAILS OF THE TRANSACTIONS BEFORE THE CIT(A) , BUT THE CIT(A) HAD NOT CALLED FOR ANY REMAND REPORT FROM THE AO AND WITHOUT GIVING ANY FI NDING ON THE FIGURE S HE ARRIVED AT , CIT(A) JUST CONFIRMED THE ORDER OF THE AO. I ALSO FIND THAT T HE AO HAS RECORDED THAT THE TOTAL TRANSACTIONS IN SHARES WAS RS. 88,83,19,007/ - , BUT AS RIGHTLY POINTED OUT BY ASSESSEE, THERE IS NO EVIDENCE THAT ASSESSEE HAD TRANSACTIONS TO THE EXTENT OF RS. 88,83,19,007/ - . THE CIT(A) , ON THE OTHER HAND , HAD RECORDED THAT THE TOTAL TRANSACTIONS OF THE ASSESSEE ARE TO THE TUNE OF RS. 8,83,19,007/ - . IT APPEARS THAT NONE OF THE OFFICERS HAVE VERIFIED THE DOCUMENTS FILED BY THE ASSESSEE. THERE FORE, IN THE INTEREST OF JUSTICE , I REMAND THE ISSUE TO THE FILE OF AO WITH A DIRECTION TO RE - CONSIDER THE ISSUE ON MERITS AFTER AFFORDING THE ASSESSEE A FA IR OPPORTUNITY OF HEARING. THE ASSESSEE ALSO SHALL FILE ALL RE LEVANT DETAILS BEFORE THE AO AND COOPERATE WITH THE AO FOR EARLY COMPLETION OF THE ASSESSMENT . 8 . IN THE RESULT, ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONO UNCED IN OPEN COURT ON 29 TH APRIL , 2020. SD/ - (P . MADHAVI DEVI) JUDICIAL MEMBER DATED: 29 TH APRIL , 2020. *GMV ITA NO. 6 4 0 /HYD/201 8 AY: 2014 - 15 SRI VENKATA PHANEENDRA MOHAN SHARMA MUDUNURI 4 COPY FORWARDED TO: 1. SHRI VENKATA PHANEENDRA MOHAN SHARMA MUDUNURI, C/O SHRI KN NARAYANAN, FCA, KUMBHAT & CO., CHARTERED ACCOUNTANTS, KUMBHAT COMPLEX, 5 TH FLOOR, NO.29, RATTAN BAZAR, CHENNAI 600 003 . 2. DCIT, CIRCLE 12(1), HYDERABAD . 3. CIT(A) - 1 , HYDERABAD. 4. PR.CIT - 1 , HYDERABAD . 5. D.R. ITAT HYDERABAD. 6. GUARD FILE 1. DRAFT DICTATED ON 17 /03/ 2020 2. DRAFT PLACED BEFORE THE AUTHOR 1 8 /03/2020 23/04/2020 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY SECOND MEMBER 5. APPROVED DRAFT COMES TO SRPS 6. KEPT FOR PRONOUNCEMENT 29/04/2020 7. FILE SENT TO BENCH CLERK