Shri Bhawani Kumar Shah C/o- O.P. Agrawal, CA, H-8, Chitranjan Marg, C-Scheme, Jaipur, Jaipur V. ITO Ward-7(1), Jaipur, Ward-7(1), Jaipur

ITA 737/JPR/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5581 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 21-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA
• Keywords: Principle of natural justice; Reasonable cause; Set aside; Bogus
• Section: 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH SMC, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE : SHRI VIJAY PAL RAO, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO.737/JP/2019 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2015-16 SHRI BHAWANI KUMAR SHAH 7, RATHORE NAGAR, VAISHALI NAGAR,JAIPUR CUKE VS. THE ITO WARD- 7(1),JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ACQPS 0534 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY :SHRI MANISH AGARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA, JCIT-DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 23/07/2019 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 24 /07/2019 VKNS'K@ ORDER PER VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 25-03-2019 OF LD. CIT(A)-3, JAIPUR FOR THE ASSESSM ENT YEAR 2015-16. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) HAS GROSSLY ERRED IN DECIDING TH E APPEAL EX-PARTE WITHOUT AFFORDING ADEQUATE OPPORTUNITY TO THE ASSES SEE. APPELLANT 2 ITA NO. 737/JP/2019 SHRI BHAWANI KUMAR SHA H VS ITO, WARD-7(1), JAIPUR PRAYS ORDER SO PASSED IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND DESERVES TO BE QUASHED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE MAT TER, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF AO IN HOLDING THE LONG TERM CAPITAL GAIN OF RS. 5,40,413/- ARISING TO ASSESSEE ON SALE OF SHARES OF M/S. PARAG SHILPA INVESTMENTS LTD. FOR A TOTAL SALE CONSIDERATION OF RS. 5,53,457/- AND CLAIMED EXEMPT U/S 10(38) OF THE I.T. ACT, 1961 AS BOGUS AND TREATING THIS LONG TERM CAPITAL GAIN OF RS. 5,40,413/- ON SALE OF ABOVE MENTIONED SHARES AS UNE XPLAINED CREDIT U/S 68 OF THE ACT. THIS IS MOST ARBITRARY, UNJUST, UNTE NABLE AND BAD IN FACT AND IN LAW AND IN THE ALTERNATIVE EXCESSIVE. 2.1 THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTI ON OF AO IN NOT APPRECIATING THAT M/S. PARAG SHILPA INVESTME NTS LTD IS A PUBLIC LIMITED COMPANY AND ITS SHARE ARE QUOTED IN RECOGNI ZED STOCK EXCHANGE AND ITS SHARES WERE SOLD BY THE ASSESSEE THROUGH AU THORIZED SHARE BROKER ON THE ONLINE PORTION OF THE RECOGNIZED STOC K EXCHANGE AFTER PAYING STT AND PAYMENT WAS RECEIVED THROUGH BANKING CHANNELS. 2.2 THAT THE LD. CIT(A) HAS FURTHER ERRED IN CONFIR MING THE ABOVE MENTIONED ADDITION OF RS. 5,40,413/- MADE BY THE AO AFTER INTER ALIA OBSERVING THAT THE FINANCIAL TRANSACTION EFFEC TED BY THE ASSESSEE WERE SHAM ONES AND THAT THE ENTIRE EDIFICE WAS ONLY A COLOUR DEVICE USED TO EVADE TAX, WHICH IS MOST ARBITRARY, UNJUST AND UNTENABLE IN FACT AND IN LAW AND LIABLE TO BE CANCELLED. 2.1 THE GROUND NO.1 OF THE ASSESSEE IS REGARDING VIOLATION OF PRINCIPLES OF NATURAL JUSTICE DUE TO NOT AFFORDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. 2.2 THE LD.AR OF THE ASSESSEE HAS SUBMITTED THAT TH E LD. CIT(A) HAS DECIDED THE APPEAL OF THE ASSESSEE EX-PARTE WHEN NO BODY ATTENDED THE CASE ON 22-03-2019. HE HAS SUBMITTED THAT ON EARLIE R TWO OCCASIONS THE 3 ITA NO. 737/JP/2019 SHRI BHAWANI KUMAR SHA H VS ITO, WARD-7(1), JAIPUR LD.AR OF ASSESSEE DULY APPEARED BEFORE THE LD. CIT( A) AND THE MATTER WAS ADJOURNED ON SUBSEQUENT DATES. HOWEVER, DUE TO SOME CONFUSION REGARDING THE DATE OF HEARING AS THE APPEAL OF THE ASSESSEE HUF WAS ALSO PENDING BEFORE THE LD. CIT(A). THE HEARING COULD NO T BE ATTENDED. THEREFORE, THE LD.AR HAS STATED AT BAR THAT DUE TO SOME INADVERTENT MISTAKE ON THE PART OF THE LD.AR AND CONFUSION ABOU T THE DATE OF HEARING OF TWO APPEALS PENDING BEFORE THE LD. CIT(A) I.E. O NE OF ASSESSEE INDIVIDUAL AND ANOTHER OF ASSESSEE HUF, HE COULD NO T APPEAR BEFORE THE LD. CIT(A) ON 22-03-2019. THUS HE HAS PLEADED THAT THE MATTER MAY BE SET ASIDE TO THE RECORD OF THE LD. CIT(A) FOR GRANTING ONE MORE OPPORTUNITY OF HEARING TO THE ASSESSEE SO THAT ASSESSEE CAN REPRE SENT ITS CASE BEFORE THE LD. CIT(A). 2.3 ON THE OTHER HAND, THE LD. DR HAS OBJECTED TO T HE PRAYER OF THE ASSESSEE AND SUBMITTED THAT AFTER SEEKING ADJOURNME NTS ON TWO OCCASIONS NOBODY APPEARED ON BEHALF OF THE ASSESSEE. THE LD. CIT(A) THUS HAS DECIDED THE APPEAL EX-PARTE. 2.4 HAVING CONSIDERED THE RIVAL SUBMISSIONS AND CAR EFUL PERUSAL OF THE IMPUGNED ORDER, IT IS NOTED THAT THE LD. CIT(A) HAS DISMISSED THE APPEAL 4 ITA NO. 737/JP/2019 SHRI BHAWANI KUMAR SHA H VS ITO, WARD-7(1), JAIPUR OF THE ASSESSEE EX-PARTE DUE TO THE REASONS OF NON- APPEARANCE ON BEHALF OF THE ASSESSEE, THOUGH THE APPEAL WAS DECIDED ON MERI T. THE REASONS RECORDED BY THE LD. CIT(A) FOR DECIDING THE APPEAL EX-PARTE IN PARA 2 OF HIS ORDER ARE AS UNDER:- 2. THE HEARING IN THIS CASE WAS INITIALLY FIXED F OR 04-12- 2018 BUT ON THE APPOINTED DATE NEITHER APPELLANT AT TEND NOR FILED ANY ADJOURNMENT LETTER. THE NOTICE AGAIN ISSUED FIXING FOR HEARING ON 11- 01-2019. ON APPOINTED DATE A/R OF THE APPELLANT ATT ENDED AND ADJOURN ON 25-02-2019. ON APPOINTED DATE STAFF OF THE A/R A TTENDED AND ADJOURN ON 22-03-2019 BUT ON THE APPOINTED DATE NEI THER APPELLANT ATTEND NOR FILED ANY ADJOURNMENT LETTER. UNDER THE CIRCUMSTANCES, IT APPEARS THAT THE APPELLANT DOES NOT WANT TO PURSUE THIS APPEAL, THEREFORE, I HAVE NO OPTION BUT TO DECIDE THE APPEA L ON MERITS ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THUS IT IS CLEAR THAT ON EARLIER TWO OCCASIONS, THE LD.AR OF THE ASSESSEE DULY APPEARED BEFORE THE LD. CIT(A). HOWEVER, WHEN HEARING WAS ADJOURNED ON 22-03-2019, NOBODY APPEARED BEFORE THE LD. CIT(A) AND WITHOUT ISSUING ANY FRESH NOTICE THE LD. CIT(A) HAS DECIDED THE APPEAL EX- PARTE. THE LD.AR HAS EXPLAINED THE REASONS FOR NON- APPEARANCE BEFORE THE LD. CIT(A) THAT DUE TO ANOTHER APPEAL PENDING IN T HE CASE OF BHAWANI KUMAR SHAH, (HUF) BEFORE THE SAME LD. CIT(A), THERE WAS A CONFUSION ABOUT THE DATE OF HEARING AND THEREFORE, THE NON-A PPEARANCE IS DUE TO INADVERTENT AND BONA FIDE MISTAKE. THE TRIBUNAL FIN DS THAT THE REASONS 5 ITA NO. 737/JP/2019 SHRI BHAWANI KUMAR SHA H VS ITO, WARD-7(1), JAIPUR EXPLAINED BY THE LD.AR ARE REASONABLE CAUSE FOR NON -APPEARANCE BEFORE THE LD. CIT(A) . THEREFORE, IN THE FACTS AND CIRCUM STANCES OF THE CASE, THE MATTER IS SET ASIDE TO THE RECORD OF THE AO FOR GRA NTING ONE MORE OPPORTUNITY OF HEARING TO THE ASSESSEE AND THEN DEC IDING THE SAME AFRESH. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24 /07/201 9. SD/- FOT; IKY JKO (VIJAY PAL RAO) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 24/07/ 2019 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI BHAWANI KUMAR SHAH, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO , WARD- 7 (1), JAIPUR 3. VK;DJ VK;QDRVIHY ) @ CIT(A), 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.737/JP/2019) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR