Gita Chowdhury, Kolkata V. CIT - IX, KOLKATA, Kolkata

ITA 704/KOL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87639 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 21-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR
• Assessee Lawyers: MIRAJ SHAH
• Keywords: Difference of opinion; Change of opinion
• Section: 263; 143(3); 142(1)

Judgement Text

I.T.A . NO . 704 /KOL./201 4 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI N.K. SAINI (ACCOUNTANT MEMBER) , AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO. 704 /KOL . / 20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 GITA CHOWDHURY,............. ... ............... ..... .... ............ .. .APP ELL ANT C/O. D.J. SHAH & CO., KALYAN BHAVAN, 2, ELGIN ROAD, KOLKATA - 700 020 [PAN : A FRPK 9925 J ] - VS. - COMMISSIONER OF INCOME TAX, ............................ . RESPONDENT KOLKATA - IX, KOLKATA, BAMBOO VILLA, 169, A.J.C . BOSE ROAD, KOLKATA - 700 014 APPEARANCES BY: SHRI MIRAJ SHAH , FCA , FOR THE ASSESSEE SHRI VIJAY KUMAR , CIT, D.R. , FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : JANUARY 27 , 2 01 5 DATE OF PRONOUNCING THE ORDER : JANUARY 29 , 201 5 O R D E R PER GEORGE MATHAN : THIS IS AN APPEAL FILED BY THE ASSESSE E AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX , KOLKATA - IX, KOLKATA IN APPEAL NO. CIT - IX/KOL/S.263 PROCEEDING/2013 - 14/3250 DATED 21.03.2014 FOR TH E ASSESSMENT YEAR 200 9 - 10 . 2 . SHRI MIRAJ SHAH , F.C.A. , REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI VIJAY KUMAR , CIT, D.R., REPRESENTED ON BEHALF OF THE REVENUE. I.T.A . NO . 704 /KOL./201 4 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 2 OF 6 3 . AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LD. A.R. THAT THE ASSESSEE IS AN INDIVIDUAL, WHO HAD PURCHASED SHAR ES IN A PRIVATE LIMITED COMPANY, NAMELY M/S. INCENTS CONSULTANTS PRIVATE LIMITED DURING THE ASSESSMENT YEAR 2003 - 04. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD PURCHASED 71,000 SHARES @ RS.2/ - PER SHARE. IT WAS THE SUBMISSION THAT DURING THE ASSESSMENT YE AR 2008 - 09, THE ASSESSEE HAD SOLD THE SAME AT A PRICE OF RS.35/ - PER SHARE. IT WAS THE SUBMISSION THAT CONSEQUENTLY THE ASSESSEE HAD EARNED CAPITAL GAINS OF NEARLY RS.23,05,611/ - . IT WAS THE SUBMISSION THAT THE ASSESSEE HAD MADE INVESTMENTS IN REC BONDS TO AN EXTENT OF RS.23,00,000/ - AND HAD CLAIMED THE CAPITAL GAINS AS EXEMPT AND NOT LIABLE FOR TAXATION. THE ASSESSEE HAD ALSO DISCLOSED THE SAME IN ITS RETURN OF INCOME FILED. THE RETURN OF THE ASSESSEE CAME TO BE TAKEN UP FOR SCRUTINY UNDER THE CASS AND THE ASSESSING OFFICER HAD AFTER VERIFYING THE RETURN FILED BY THE ASSE S SEE AND DETAILS CALLED FOR COMPLETED THE ASSESSMENT UNDER SECTION 143(3) ON 16.05.2011. IT WAS THE SUBMISSION THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAD SPECIF ICALLY CALLED FOR THE INFORMATION IN RESPECT OF THE DETAILS OF THE INVESTMENT IN SHARES, MUTUAL FUNDS, BONDS, IF ANY, AS ALSO THE DETAILS OF THE CAPITAL GAINS. LD. A.R. DREW OUR ATTENTION TO PAGES 39 AND 40 OF THE PAPER BOOK, WHICH WAS THE COPY OF THE NOTI CE ISSUED UNDER SECTION 142 (1) OF THE ACT. IT WAS THE SUBMISSION THAT CONSEQUENT TO THE INFORMATION CALLED FOR, THE ASSESSEE HAD PRODUCED BEFORE THE ASSESSING OFFICER THE EVIDENCES IN THE FORM OF DETAILS OF THE LIST OF LONG - TERM CAPITAL GAINS, COMPUTATION OF CAPITAL GAINS AS ALSO THE COMPUTATION OF THE TOTAL INCOME WHERE THE SAID TRANSACTIONS HAD BEEN SPECIFICALLY BROUGHT OUT. IT WAS THE FURTHER SUBMISSION THAT FURTHER DETAILS IN THE FORM OF THE SALE BILLS OF THE SHARES OF INCENTS CONSULTANTS PRIVATE LIMITE D AS ALSO THE BANK PASS BOOK HAD BEEN PRODUCED. IT WAS THE SUBMISSION THAT THE BILLS SPECIFICALLY CONTAINED THE NAMES OF THE PURCHASERS. THE ASSESSEE HAD ALSO PRODUCED THE DETAILS OF THE COMPANY M/S. INCENTS CONSULTANTS PRIVATE LIMITED AS WAS ALSO AVAILABL E WITH THE ASSESSEE REPRESENTING THE PRINTED ACCOUNTS OF THE SAID COMPANY. IT WAS THE SUBMISSION THAT THE DETAILS PRODUCED BY THE I.T.A . NO . 704 /KOL./201 4 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 3 OF 6 ASSESSEE HAD BEEN VERIFIED AND NO DEFECT HAD BEEN POINTED OUT IN THE COURSE OF ASSESSMENT AND THE ASSESSMENT WAS COMPLETED ACC EPTING THE RETURNED INCOME. LD. A.R. DREW OUR ATTENTION TO PAGES 41 TO 68 OF THE PAPER BOOK, WHICH WERE THE EVIDENCES PRODUCED BEFORE THE ASSESSING OFFICER. IT WAS THE FURTHER SUBMISSION BY THE LD. A.R. THAT IN THE ORDER - SHEET NOTING OF THE ASSESSING O OFFI CER ALSO CATEGORICALLY SHOWED THE VARIOUS EXAMINATION AND DETAILS CALLED FOR BY THE ASSESSING O FFICER. LD. A.R. DREW OUR ATTENTION TO PAGE 13 OF THE PAPER BOOK, WHICH WAS THE COPY OF THE ORDER - SHEET NOTINGS. IT WAS THE SUBMISSION THAT SUBSEQUENTLY THE LD. CIT HAD INVOKED HIS POWER UNDER SECTION 263 ON THE BASIS OF LETTER S ISSUED BY THE ASSESSING OFFICER AND THE JCIT, RANGE - 25, KOLKATA DATED 30/4/2013 AND 08/05/2013 RESPECTIVELY REQUESTING FOR RESCINDING THE ASSESSMENT ORDER. IT WAS THE SUBMISSION THAT CONSE QUENTLY THE LD. CIT HAD CALLED FOR THE RECORDS AND ISSUED A SHOW - CAUSE NOTICE DATED 30.08.2013 TO WHICH THE ASSESSEE HAD SPECIFICALLY REPLIED VIDE LETTER DATED 17.09.2013 FILED ON 18.09.2013 , WHEREIN IT WAS BROUGHT TO THE ATTENTION TO THE LD. CIT ALL THE D ETAILS, WHICH HAD BEEN PRODUCED BEFORE THE ASSESSING OFFICER. IT WAS THE SUBMISSION THAT THE LD. CIT WITHOUT CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HAD HELD THAT THE ASSESSING OFFICER NEVER HAD THE OCCASION TO EXAMIN E THE GENUINENESS OF THE SALE OF S HARES. IT WAS THE SUBMISSION THAT THE LD. CIT FURTHER HELD THAT IT WAS VERY DIFFICULT TO ASCERTAIN AS TO WHETHER THE ASSESSING O FFICER HAD REALLY PROBED THE GENUINENESS OF THE INCIDENCE OF THE CAPITAL GAINS BECAUSE BARRING THE FEW BONDS RELATED DOCUMENTS A ND NO OTHER PAPERS RELATING TO THE PURCHASE AND SALE OF SHARES OF THE PRIVATE LIMITED COMPANY WAS AVAILABLE ON RECORD. IT WAS THE FURTHER SUBMISSION THAT CONSEQUENTLY THE LD. CIT HELD THAT THE GENUINENESS OF THE LONG - TERM CAPITAL GAINS AS DECLARED BY THE A SSESSEE HAD NOT BEEN ENQUIRED INTO BY THE ASSESSING OFFICER AND HAD HELD THAT THE ASSESSMENT ORDER WAS DEEMED TO BE PREJUDICIAL AS WELL AS ERRONEOUS. IT WAS THE SUBMISSION THAT THE LD . CIT HAD SET ASIDE THE ASSESSMENT ORDER WITH A DIRECTION TO THE ASSESSIN G O FFICER TO RE - FRAME THE SAME DE NOVO BY CONDUCTING NECESSARY ENQUIRIES. IT WAS THE SUBMISSION THAT ALL THE DETAILS I.T.A . NO . 704 /KOL./201 4 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 4 OF 6 HAVING BEEN PRODUCED BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAVING CONDUCTED THE NECESSARY ENQUIRIES AND HAVING COMPLETED T HE ASSESSMENT JUST ON A CHANGE OF OPINION, THE POWERS UNDER SECTION 263 COULD NOT BE INVOKED TO HOLD THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. IT WAS THE SUBMISSION THAT , IN FACT, THE LD. CIT IN HIS ORDER UNDER SECTION 2 63 HAS NOT POINTED OUT AS TO THE ERROR IN THE ASSESSMENT ORDER. THE ORDER UNDER SECTION 263 IS FOUNDED ONLY ON PRESUMPTION AND NOT ON THE BASIS OF ANY SPECIFIC EVIDENCES. IT WAS THE SUBMISSION THAT NO SPECIFIC DEFECT HAD BEEN FOUND IN THE ASSESSMENT ORDER WHICH CALLED FOR THE REVISION UNDER SECTION 263. IT WAS THE SUBMISSION THAT THE ORDER UNDER SECTION 263 WAS LIABLE TO BE QUASHED. 4. IN REPLY, LD. CIT, D.R. SUBMITTED THAT THE ASSESSMENT HAD BEEN DONE UNDER CASS AND CONSEQUENTLY THE CBDT INSTRUCTION DID N OT PRECLUDE THE ASSESSING OFFICER FROM ANY FURTHER VERIFICATION. IT WAS THE FURTHER SUBMISSION THAT THE ASSESSING OFFICER DID NOT APPLY HIS MIND TO THE CRUX OF THE ISSUE. IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER HAD APPLIED ONLY THE STANDARD OPERAT ING PROCEDURE WHEN COMPLET ING THE ASSESSMENT AND DID NOT GO BEYOND. IT WAS THE SUBMISSION THAT THE FACT THAT THE SHARES HAD BEEN PURCHASED AT RS.2/ - PER SHARE AND AFTER FIVE YEARS, THE SAME WAS SOLD @ RS.35/ - PER SHARE , SHOULD HAVE BEEN DRAWN THE ATTENTION OF THE ASSESSING OFFICER THAT THERE WAS SOMETHING MORE TO THE TRANSACTIONS. IT WAS THE SUBMISSION THAT THE ORDER UNDER SECTION 263 PASSED BY THE LD. CIT WAS LIABLE TO BE UPHELD. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT THE OUTSET, A PERUSAL OF THE EVIDENCES WHICH HAVE BEEN PLACED IN THE PAPER BOOK MO RE SPECIFICALLY THE EVIDENCES WHICH HAVE BEEN CLAIMED BY THE ASSESSEE TO HAVE BEEN PRODUCED BEFORE THE ASSESSING OFFICER AND WHICH THE LD. CIT IN HIS ORDER UNDER SECTION 263 REFERS TO AS ONLY FEW BONDS R ELATED DOCUMENTS AND NO OTHER PAPERS RELATING TO THE PURCHASE AND SALE OF SHARES OF THE PRIVATE LIMITED COMPANY HAS BEEN AVAILABLE ON RECORD, SHOWS THAT THESE DOCUMENTS RUNNING FROM PAGES 2 TO 27 BEING THE I.T.A . NO . 704 /KOL./201 4 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 5 OF 6 COMPUTATION OF TOTAL INCOME, INCOME & EXPENDITURE ACCOUNT, DETAILS OF THE PROFIT ON THE SALE OF SHARES, DETAILS OF THE CAPITAL GAINS, FORM NO. 16, REC BONDS CERTIFIED COPIES, ITNS 280 TAX PAID CHALLAN, NOTICE UNDER SECTIONS 143(2), 142, COPY OF THE ORDER - SHEET NOTINGS IN THE ASSESSMENT FOLDER, THE DETAI LS OF THE SOURCE OF INVESTMENT IN REC BONDS, THE ACCOUNTS STATEMENT WITH AXIS BANK AND THE CONFIRMATION OF ACCOUNTS WITH VARIOUS PERSONS ARE ALL CERTIFIED TO BE TRUE COPY BY THE OFFICE SUPERINTENDENT, OFFICE OF THE ADDITIONAL CIT, RANGE - 25, KOLKATA. THE AS SESSING OFFICER IN THE ASSESSEE S CASE IS INCOME TAX OFFICER, WARD - 25(1), KOLKATA. FURTHER DETAILS IN THE FORM OF BILLS FOR THE SALE OF SHARES, PRINTED ACCOUNTS OF M/S. INCENTS CONSULTANTS PRIVATE LIMITED ARE ALL PART OF THE EVIDENCES REPRESENTING THE ANNE XURE S BEFORE THE LD. CIT. WHAT IS NOTICED IS THAT ONLY THE EVIDENCES IN REGARD TO THE DETAILS REPRESENTING THE PRINTED ACCOUNTS OF THE COMPANY M/S. INCENTS CONSULTANTS PRIVATE LIMITED AND THE COPIES OF THE BILLS FOR THE SALE OF SHARES WERE NOT ALLEGEDLY BE FORE THE ASSESSING OFFICER IF AT ALL. IN ANY CASE THAT WOULD NOT MAKE A DIFFERENCE. THE ALLEGATION MADE BY THE LD. CIT THAT THE TRANSACTIONS MIGHT NOT BE GENUINE AND REQUIRES DEEPER INVESTIGATION, COULD BE OF NO RELEVANCE IN SO FAR AS THE TRANSACTIONS REPR ESENTING THE ACTUAL PURCHASE OF THE SAID SHARES TOOK PLACE IN THE ASSESSMENT YEAR 2003 - 04. IF THE TRANSACTION IS BOGUS, THEN T HE TRANSACTION BECOMES BOGUS IN THE ASSESSMENT YEAR 2003 - 04 BECAUSE IT IS THE PURCHASE ITSELF. THE FACTUM OF SALE HAS BEEN PROVED AND ADMITTED, IN SO FAR AS THE NAME OF THE PURCHASER AND THE TRANSACTIONS HAVING BEEN ROUTED THROUGH THE BANK ACCOUNT REMAINED PROVED. IN THE ASSESSMENT YEAR 2009 - 10, WHICH IS THE ASSESSMENT YEAR IN APPEAL, TRANSACTION RELATING TO THE ASSESSMENT YEAR 2004 - 05 CANNOT BE EXAMINED. FURTHER A PERUSAL OF THE ORDER - SHEET NOTINGS AS ALSO THE 142(1) NOTICE ISSUED BY THE ASSESSING OFFICER AND THE EVIDENCES PRODUCED BY THE ASSESSEE IN THE COURSE OF ASSESSMENT CLEARLY SHOW THAT THE ISSUE OF THE CAPITAL GAINS AS ALSO TH E INVESTMENT IN THE REC BONDS HAVE BEEN EXAMINED BY THE ASSESSING OFFICER. IN ANY CASE, THE LD. CIT OTHER THAN SAYING THAT THE ASSESSMENT ORDER IS CRYPTIC IN NATURE OR THAT IS VERY DIFFICULT TO ASCERTAIN AS TO I.T.A . NO . 704 /KOL./201 4 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 6 OF 6 WHETHER THE ASSESSING OFFICER REALLY PROBED TH E GENUINENESS OF THE INCIDENCE OF CAPITAL GAINS CANNOT MAKE THE ASSESSMENT ORDER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE . IN FACT, THE LD. CIT HAS NOT POINTED OUT WHAT IS THE EXACT ERROR . J UST BECAUSE THE QUERY NOR THE ANSWER IS REFLECTED IN T HE ASSESSMENT ORDER , I T WOULD NOT LEAD TO THE CONCLUSION THAT THE ORDER OF THE ASSESSING OFFICER CALLED FOR ANY INTERFERENCE OR REVISION. ALSO, THE LD. CIT HAVING EXAMINED AND VERIFIED THE TRANSACTIONS HIMSELF AND HAVING NOT POINTED OUT ANY ERROR IN THE ME RITS OR THE ORDER OF THE ASSESSING OFFICER OR THE VIEW TAKEN BY THE ASSESSING OFFICER, IT WOULD NOT BE POSSIBLE TO INVOKE HIS POWERS UNDER SECTION 263 , J UST BECAUSE TH E VIEW AS DESIRED BY THE LD. CIT HAS NOT BEEN TAKEN BY THE ASSESSING OFFICER IN THE ASSES SMENT ORDER. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ORDER PASSED UNDER SECTION 263 BY THE LD. CIT IS UNSUSTAINABLE AND CONSEQUENTLY QUASH THE SAME. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OP EN COURT ON 29 TH JANUARY , 201 5 . SD/ - SD/ - N.K. SAINI GEORGE MATHAN ( ACCOUNTANT MEMBER) ( JUDICIAL MEMBER) KOLKATA, THE 29 TH D AY OF JANUARY , 201 5 COPIES TO : (1) GITA CHOWDHURY, C/O. D.J. SHAH & CO., K ALYAN BHAVAN, 2, ELGIN ROAD, KOLKATA - 700 020 (2) COMMISSIONER OF INCOME TAX, KOLKATA - IX, KOLKATA, BAMBOO VILLA, 169, A.J.C. BOSE ROAD, KOLKATA - 700 014 ( 3 ) COMMISSIONER OF INCOME TAX ( 4 ) THE DEPARTMENTAL REPRESENTATIVE ( 5 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S.