Suresh J Kothari HUF, Bangalore V. Income Tax Officer, Ward - 2(2)(1), Bangalore

ITA 650/BANG/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6966 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 02-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHRIPRASHANTH G.S.
• Keywords: Penny stocks; Set aside
• Section: 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES C BENCH: BANGALORE BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA. NO. 650 /BANG/201 9 (ASSESSMENT YEAR : 20 15 - 16 ) SHRI SURESH J KOTHARI (HUF), NO.39, 1 ST ANJANEYA TEMPLE STREET, LINK ROAD, SHESHADRIPURAM, BENGALURU - 560 020 PAN AAMHS 5247R VS. INCOME TAX OFFICER , WARD 2(2)(1), B ENGALURU . (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI PRASHANTH G.S., C.A. REVENUE BY: DR. P. V. PRADEEP KUMAR, ADDL. CIT (D.R) DATE OF HEARING : 30.07 .2019 DATE OF PRONOUNCEMENT : 31 .07 .2019 O R D E R PER SHRI B.R. BASKARAN, A.M. : THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 31 - 01 - 2019 PASSED BY LD C OMMISSIONER OF INCOME TAX (APPEALS) - 2 , BANGALORE FOR THE ASST. YEAR 2015 - 16 . THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LEARNED CIT (APPEAL S) IN CONFIRMING THE ADDITION OF SALE CONSIDERATION RECEIVED ON SALE OF SHARES AS INCOME OF THE ASSESSEE UNDER S ECTION 68 OF THE INCOME TAX ACT, 1961 (THE ACT). 2 ITA NO.650/BANG/2019 2. THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS SOLD 9,000 SHARES HELD BY HIM IN M/S. CONARK TRADERS LIMITED FOR A SUM OF RS.43.77 LAKHS AND REALIZED LONG TERM C APITAL GAINS (LTCG). THE ASSESSEE CLAIMED EXEMPTION UNDER SECTION 10(38) OF THE ACT. THE ASSES SING OFFICER WAS OF THE VIEW THAT THE SHARES SOLD BY THE ASSES SEE FALLS UNDER CATEGORY OF PENN Y STOCKS . THE REVENUE HAS STUDIED THE MODUS OPERANDI OF RIGGING T HE PRICES OF PENNY STOCKS AND GENERATION OF CAPITAL GAIN THERE FROM. A CCORDINGLY THE ASSESSING OFFICER TOOK THE VIEW THAT THE TRANSACTION S OF PURCHASE AND SALE OF SHARES ENTERED BY THE ASSESSEE IN THE SHARES OF ABOVE SAID COMPANY WERE ARRANGED TRANSACTION S. ACCORDINGLY THE AO ASSESSED THE SALE CONSIDERATION OF RS.43.77 LAKHS AS INCOME OF THE ASSESSEE UNDER SECTION 68 OF THE ACT. THE LEARNED CIT (APPEALS) ALSO CONFIRMED THE SAME. 3. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT A N IDENTICAL ISSUE WAS CONSIDERED BY THE SMC BENCH OF BANGALORE TRIBUNAL IN ASSESSEE'S BROTHER CASE NAMED SRI V INOD K OTHARI ( HUF ) IN ITA NO.698/BANG/2019 AND THE TRIBUNAL , VIDE ITS ORDER DT. 0 3.7.2019 , HAS RESTORED THE ISSUE TO THE FILE OF ASSESSING OFFICER FOR EXAMI NING IT AFRESH AS PER DIRECTIONS ISSUED BY HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CHANDRA D EVI KOTHARI VS. ITO (WRIT PETITION NO.39370/2014 DT.2.2.2015). ACCORDINGLY, THE LEARNED AUTHORISED 3 ITA NO.650/BANG/2019 REPRESENTATIVE PRAYED THAT THE ISSUE CONTESTED IN THIS APPE AL MAY ALSO BE RESTORE D TO THE FILE OF ASSESSING OFFICER WITH SIMILAR DIRECTION S . 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT OBJECT TO THE PRAYER PUT FORTH BY THE LEARNED A.R. 5. WE HEARD THE PARTIES AND PERUSED THE RECOR D. WE NOTICE T HAT THE SMC BENCH OF BANGALORE TRIBUNAL HAS CONSIDERED AN IDENTICAL ISSUE IN THE CASE OF SHRI V INOD K OTHARI (HUF) (SUPRA) AND THE MATTER HAS BEEN RESTORED TO THE FILE OF ASSESSING OFFICER WITH THE FOLLOWING OBSERVAT ION : 4.3.1 I HAVE CONSIDERED THE R IVAL SUBMISSIONS AND FIRST OF ALL, I REPRODUCE PARA NO.8 OF THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF M/S. CHANDRA DEVI KOTHARI (SUPRA) AND THIS IS AS UNDER: 8. IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES AS ADVERTED TO ABOVE AND AS THE PETITIONER HAS BEEN DENIED AN OPPORTUNITY OF FAIR HEARING BY PROVIDING COPY OF THE STATEMENT AND RELATED DETAILS REGARDING THE ALLEGED SHARE AMOUNT, I AM OF THE VIEW THAT THE M ATTER REQUIRES TO BE RE - CONSIDERED BY THE RESPONDENT BY PROVIDING FAIR AND REASONABLE OPPORTUNITY OF HEARING TO THE PETITIONER AND BY FURNISHING THE DETAILS / COPY OF THE STATEMENT BASED ON WHICH THE IMPUGNED ASSESSMENT ORDER HAS BEEN PASSED. 4.3.2 FROM THE ABOVE PARA 8 OF THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CHANDRA DEVI KOTHARI (SUPRA) IT IS SEEN THAT MATTER WAS RESTORED BACK TO THE FILE OF THE AO FOR FRESH DECISION AFTER PROVIDING COPY OF THE STATEMENT AND OTHER RELATED DETAILS R ELIED UPON BY THE AO; IN THIS CASE COPY OF THE REPORT OF KOLKATA INVESTIGATION DIRECTORATE AND OTHER ATTENDANT DETAILS. AS PER THE FACTS NOTED BY THE HIGH COURT IN THE EARLIER PARAS OF JUDGMENT (SUPRA) AND AS PER THE FACTS OF THE CASE ON HAND, THERE APPEA RS TO BE NO DIFFERENCE IN FACTS AND THEREFORE BY RESPECTFULLY FOLLOWING THIS JUDGMENT IN THE CASE OF CHANDRA DEVI KOTHARI (SUPRA), I SET ASIDE THE IMPUGNED ORDER OF LEARNED CIT(A) FOR ASSESSMENT YEAR 2014 - 15 AND RESTORE THE MATTERS TO THE FILE OF THE AO FO R FRESH DECISION WITH THE SAME DIRECTIONS AS WERE ISSUED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE AS PER PARA NO.8 OF THE JUDGMENT REPRODUCED ABOVE. IN VIEW OF THIS DECISION, NO ADJUDICATION IS CALLED FOR AT THIS STAGE REGARDING THE MERITS OF THE AD DITION. 4 ITA NO.650/BANG/2019 AS THE FACTS PREVAILING IN THE INSTANT CASE IS IDENTICAL NATURE, FOLLOWING THE AFORESAID DECISION OF THE TRIBUNAL, WE SET ASIDE THE ORDER PASSED BY THE LEARNED CIT (APPEALS) AND RESTORE ALL THE ISSUES TO THE FILE OF ASSESSING OFFICER WITH SIMILAR DIRECTIONS MENTIONED IN ITAT ORDER (SUPRA) FOR EXAMINING THEM AFRESH . 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 3 1 S T JULY, 2019. S D / - S D / - ( BEENA PILLAI ) ( B.R. BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 3 1 S T JULY, 2019. *REDDY GP COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE