LATE MR. ROSHAN RAJA, MUMBAI V. ITO 19(3)(2), MUMBAI

ITA 7212/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3079 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 20-06-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 03-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SOMANATH S UKKALI
• Assessee Lawyers: DIKSHIT DOSHI
• Keywords: Income from undisclosed sources; Share purchase agreement; Penny stocks
• Section: 143(3); 147; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SM C BENCH , MUMBAI BEFORE SRI MAHAVIR SINGH, J UDICIAL MEMBER ITA NO .721 2 /MUM/2014 (A.Y.:2005 - 06 ) LATE MRS. ROSHAN RAJA, THROUGH LEGAL HEIR FARIDA RAJA MARKER, C/O. D. C. BOTHRA & CO. (CA), 297, WILLIE MANSION, 1 ST FLOOR, TARDEO ROAD, NANA CHOWK, MUMBAI 200 007 VS. THE INCOME TAX OFFICER, WA RD - 19 (3) (2), PIRAMAL CHAMBERS, 3 RD FLOOR, LALBAUG, MUMBAI 400 012 PAN: AADPR 1741 G APPELLANT .. RESPONDENT APPELLANT BY SHRI DIKSHIT DOSHI, AR RESPONDENT BY SHRI SOMAN ATH S. UKKALI, DR DATE OF HEARING 20 - 06 - 2016 DATE OF PRONOUNCEMENT 20 - 06 - 2016 O R D E R PER MAHAVIR SINGH , JM : THIS APPEAL BY THE ASSESSEE IS ARISING OU T OF THE ORDER OF THE CIT (A) - 30 , MUMBAI PASSED IN APPEA L NO. CIT (A) - 30 / ITO - 19 (3 ) ( 2)/ IT - 11 /1 2 - 13 DATED 28 - 10 - 2014 . ASSESSMENT WAS FRAMED BY THE IT O , WARD - 19 (3)(2) , MUMBAI FOR ASSESSMENT YEAR 20 05 - 06 VIDE HIS ORDER DATED 27 - 12 - 2007 PASSED U/S 143(3) 147 OF THE INCOME TAX ACT, 1961 ( HEREINAFTER REFERRED TO AS THE ACT). PENALTY UNDER DISPUTE WA S LEVIED BY THE ITO, WARD - 19 (3) (2), MUMBAI U/S 271 (1) (C) OF THE ACT VIDE ORDER DATED 28 - 03 - 2012. 2. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE STATED THAT THIS IS A PENALTY APPEAL FOR LEVY OF PENALTY U/S 271 (1) (C) OF THE ACT BY THE AO AND C ONFIRMED BY THE CIT AND THE TRIBUNAL HAS ALREADY ALLOWED THE QUANTUM APPEAL DELETING THE ADDITION OF RS.32,94,982/ - MADE BY THE AO U/S 68 OF THE ACT IN RESPECT OF LONG TERM CAPITAL G AIN SHOWN BY THE ASSESSEE ON SALE OF SHARES BY TREATING THE SAME AS INCOME FROM UNDISCLOSED SOURCES. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER STATED THAT THIS ADDITION HAS BEEN DELETED BY THE TRIBUNAL VIDE ORDER DATED 27 - 04 - 2016 PASSED IN ITA NO.3803/MUM/2011 VIDE PARA 3.4.7 AS UNDER: - ITA NO. 72 1 2 /MUM/20 1 4 2 3.4.7 FROM THE APPRECIATION OF THE FAC TS OF THE CASE, THE MATERIAL EVIDENCE PLACED ON RECORD BY THE ASSESSEE AND IN THE LIGHT OF THE DISCUSSION OF THE FACTUAL AND LEGAL MATRIX OF THE CASE AS DISCUSSED FROM PARA 3.1 TO 3.4.6 OF THIS ORDER (SUPRA), WE ARE OF THE CONSIDERED VIEW THAT THE AUTHORIT IES BELOW I.E. AO/CIT (A) HAVE MADE THE ADDITION UNDER SECTION 68 OF THE ACT MERELY ON PRESUMPTIONS, SUSPICIONS AND SURMISES IN RESPECT OF PENNY STOCKS; DISREGARDING THE DIRECT EVIDENCES PLACED ON RECORD AND FURNISHED BY THE ASSESSEE IN THE FORM OF BROKERS CONTRACT NOTES FOR PURCHASES AND SALE OF THE SAID SHARES OF M/S. SHUKUN CONSTRUCTIONS LTD., COPIES OF THE PHYSICAL SHARE CERTIFICATES AND HER D - MAT ACCOUNT STATEMENT ESTABLISHING THE HOLDING OF THE SHARES IN NAME PRIOR TO THE SALE THEREOF; CONFIRMATION OF THE TRANSACTIONS OF BUYING AND SELLING OF THE SAID SHARES BY THE RESPECTIVE STOCK BROKERS, RECEIPT OF SALE PROCEEDS THROUGH BANKING CHANNELS, ETC. WE ARE ALSO OF THE VIEW THAT THE RATIO AND THE FACTUAL MATRIX OF THE DECISIONS IN THE CITED CASE, I.E. J ATIN CHHADWA (SUPRA) AND HARKHCHAND K. GADA (HUF) & OTHERS (SUPRA) WOULD BE APPLICABLE AND SUPPORT OF THE CASE OF THE ASSESSEE SINCE NO ADVERSE FINDING HAS BEEN RENDERED IN RESPECT OF THE DIRECT MATERIAL EVIDENCE PLACED ON RECORD IN RESPECT OF HER TRANSACT IONS OF PURCHASE AND SALE OF THE SAID SHARES OF M/S. SHUKUN CONSTRUCTIONS LTD. WHICH STAND DULY DISCLOSED IN HER AUDITED BALANCE SHEETS FILED WITH THE RETURN OF INCOME OF ASSESSMENT YEARS 2004 - 05 AND THE CURRENT YEAR UNDER CONSIDERATION. IN THIS FACTUAL AND LEGAL MATRIX OF THE CASE, AS DISCUSSED ABOVE, WE FIND THAT THE ADDITION OF RS.32,94,982/ - UNDER SECTION 68 OF THE ACT MADE AND CONFIRMED BY THE AUTHORITIES BELOW TO BE UNSUSTAINABLE AND THEREFORE DIRECT THE AO TO DELETE THE SAID ADDITION AND ACCEPT THE LTCG INCOME OF RS.31,96,507/ - SHOWN AS EXEMPT UNDER SECTION 10(38) OF THE ACT. CONSEQUENTLY , GROUND NO.1 OF THE ASSESSEES APPEAL IS ALLOWED. SINCE, THE QUANTUM ADDITION HAS BEEN DELETED, PENALTY U/S 271 (1) (C) OF THE ACT FOR CONCEALMENT OF INCOME WILL NOT SURVIVE. ACCORDINGLY, I DELETE THE PENALTY AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 3 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. O RDER PRONOUNCED IN THE OPEN COURT ON 20 /06 / 201 6 . SD/ - ( MAHAVIR SINGH ) JUDICIAL MEMBER MUMBAI , DATED 20 /6 / 201 6 LAKSHMIKANTA DEKA/SR.PS ITA NO. 72 1 2 /MUM/20 1 4 3 COPY OF THE ORDER FORWARDED TO : BY ORDER, ASSISTANT REGISTRAR ITAT, MUMBAI DATE INITIAL DICTATION PAD ATTACHED WITH THE DRAFT ORDER YES 1. DRAFT D ICTATED ON 20 - 06 - 16 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 2 1 - 06 - 16 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCE MENT ON SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT ( A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//