ITO-1(3), Agra V. M/s Ajay Prakash, HUF., Agra

ITA 74/AGR/2010

• Counselvise Citation: 7420314 RSA 2010
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 05-03-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 23-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SOHAIL AKHTAR
• Keywords: Reassessment proceedings
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER & SHRI A. L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 74/AGRA/2010 ASST. YEAR : 2001-02 INCOME-TAX OFFICER, VS. M/S. AJAY PRAKASH, HUF, 1(1), AGRA. 49, OLD VIJAY NAGAR COLONY, AGRA.(PAN : AABHA 0401 N) C.O. NO.04/AGRA/2011 (IN ITA NO. 74/AGRA/2010) ASST. YEAR : 2001-02 M/S. AJAY PRAKASH, HUF, VS. INCOME-TAX OFFICER, 49, OLD VIJAY NAGAR COLONY, 1(1), AGRA. (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI SOHAIL AKHTAR, JR. D.R. FOR ASSESSEE : NONE DATE OF HEARING : 05.03.2012 DATE OF PRONOUNCEMENT : 07.03.2012 ORDER PER BHAVNESH SAINI, J.M. : THE DEPARTMENTAL APPEAL AS WELL AS CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A)-I, AGRA DA TED 29.12.2009 FOR THE ASSESSMENT YEAR 2001-02. 2. WE HAVE HEARD THE LD. DR AND PERUSED THE FINDING S OF THE AUTHORITIES BELOW. NONE IS PRESENT ON BEHALF OF THE ASSESSEE DESPITE N OTIFYING THE DATE OF HEARING 2 THROUGH REGISTERED POST. THE PAPER BOOK ALREADY ON RECORD FILED BY THE ASSESSEE IS TAKEN INTO CONSIDERATION. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSING OFFICER INITIATED REASSESSMENT PROCEEDINGS U/S. 148 OF THE IT ACT. TH E AO MADE ADDITION OF RS.8,99,850/- ON ACCOUNT OF AMOUNT RECEIVED, WHICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNT. THE ASSESSEE EXPLAINED BEFORE THE AO TH AT THE AMOUNT WAS RECEIVED FROM M/S. AYUSHI STOCK BROKERS THROUGH CHEQUE NO. 516121 AND 694219 DRAWN ON FEDERAL BANK. THIS AMOUNT WAS RECEIVED TOWARDS SALE OF 16000 SHARES OF G.K. CONSULTANTS SECURITIES LIMITED. THE ASSESSEE PURCHA SED THESE SHARES FROM M/S. MOTLEY SECURITIES PVT. LTD. IN MAY, 2000 FOR A CONS IDERATION OF RS.5,83,628/-. ON THIS PURCHASE AND SALE OF SHARES, THE ASSESSEE EARN ED SHORT-TERM CAPITAL GAINS. THE ASSESSEE FILED COPY OF ACCOUNT OF M/S. AYUSHI STOCK BROKERS, BUT THE NOTICE SENT TO THE BROKER U/S. 133(6) REMAINED UN-COMPLIED WITH. T HE AO ALSO NOTED THAT THE COPY OF THE BANK ACCOUNT WAS ALSO NOT FURNISHED. THE AO WAS, THEREFORE, OF THE VIEW THAT THE SOURCE OF INCOME IS NOT EXPLAINED AND NOT DISCL OSED AND, THEREFORE, THE ADDITION OF RS.8,99,850/- WAS MADE. SINCE EX PARTE ASSESSMEN T U/S. 144 WAS COMPLETED, THEREFORE, INCOME OF THE ASSESSEE WAS ALSO TAKEN AT RS.50,000/- ON NOTIONAL BASIS. INCOME WAS, ACCORDINGLY, COMPUTED AT RS.9,49,850/-. THE ASSESSEE EXPLAINED THE ISSUES BEFORE THE LD. CIT(A). THE LD. CIT(A) FOUND THAT THE AO HAS TAKEN INCOME AT RS.50,000/- ON NOTIONAL BASIS ONLY AND ACCORDINGLY, DIRECTED THAT THE COMPUTATION OF 3 INCOME FILED BY THE ASSESSEE SHOULD HAVE BEEN ACCEP TED BY THE AO. THERE IS NO DEPARTMENTAL APPEAL ON THIS GROUND. 3.1 THE REVENUE HAS ONLY CHALLENGED THE DELETION O F ADDITION OF RS.8,99,850/- MADE U/S. 69A OF THE IT ACT. THE ASSESSEE FURNISHED COMPLETE DETAILS OF PURCHASE AND SALES OF THE SHARES AND REITERATED THE SAME SUB MISSIONS WHICH WERE MADE BEFORE THE AO REGARDING RECEIPT OF THE AMOUNT IN QUESTION. A COPY OF THE ASSESSMENT ORDER WAS ALSO FILED OF THE BROKER. IT WAS, THEREFORE, CL AIMED THAT THE AO WAS NOT JUSTIFIED IN MAKING ADDITION TREATING THE INCOME FROM OTHER S OURCES AND FURTHER, THE AO WAS NOT JUSTIFIED IN HOLDING THAT THE SOURCE OF THE TRA NSACTION HAS NOT BEEN EXPLAINED. THE LD. CIT(A) ACCEPTED THE EXPLANATION OF THE ASSESSEE THAT THE ASSESSEE MADE PURCHASE OF SHARES AS WELL AS SOLD THE SHARES THROUGH BROKER . THE MATERIAL ON RECORD CLEARLY SUGGESTED THAT THE ASSESSEE EARNED SHORT-TERM CAPIT AL GAINS. THE EXPLANATION OF THE ASSESSEE COULD NOT BE CONTROVERTED BEFORE THE LD. C IT(A). THEREFORE, THE LD. CIT(A) FOUND THAT SINCE SHORT-TERM CAPITAL GAIN HAS BEEN S HOWN IN THE RETURN OF INCOME, THEREFORE, THE AO WAS DIRECTED TO ADOPT THE SAME IN COME INSTEAD OF MAKING ADDITION OF RS.8,99,850/-. 4. THE LD. DR RELIED UPON THE ORDER OF THE ASSESSIN G OFFICER. THE ASSESSEE IN PAPER BOOK FILED COMPLETE DETAILS OF PURCHASE AND S ALE OF SHARES AND ALSO FILED COPY OF THE ASSESSMENT ORDER OF THE BROKER, M/S. AYUSHI STOCK BROKERS FOR THE ASSESSMENT 4 YEAR UNDER APPEAL U/S. 143(3) TO SHOW THAT THE GENU INE TRANSACTION HAD TAKEN PLACE, THE SOURCE OF WHICH IS ALSO EXPLAINED. 5. ON CONSIDERATION OF THE FACTS OF THE CASE IN THE LIGHT OF THE FINDINGS OF THE LD. CIT(A) AND THE MATERIAL ON RECORD, WE DO NOT FIND A NY JUSTIFICATION TO INTERFERE WITH THE ORDER OF LD. CIT(A). THE TRANSACTIONS CARRIED O UT BY THE ASSESSEE HAVE BEEN EXPLAINED THROUGH MATERIAL ON RECORD AND THE ASSESS EE ENTERED INTO THE TRANSACTIONS OF PURCHASE AND SALE OF SHARES GENUINELY. SALE CONS IDERATION IS RECEIVED THROUGH BROKER WHO IS ALSO EXISTING ASSESSEE WITH THE REVEN UE DEPARTMENT. THEREFORE, THERE IS NO REASON TO TREAT THE AFORESAID TRANSACTION AS NON-GENUINE FOR THE PURPOSE OF MAKING ADDITION. SINCE THE SOURCE OF THE RECEIPT OF THE AMOUNT IN QUESTION IS EXPLAINED AND THE TRANSACTION ENTERED INTO BY THE A SSESSEE WITH THE BROKER CLEARLY SUGGESTS A CASE OF SHORT-TERM CAPITAL GAINS, THEREF ORE, THE LD. CIT(A) RIGHTLY DIRECTED THE AO TO COMPUTE THE INCOME AS PER RETURN OF INCOM E AND FOR CAPITAL GAINS. THE DEPARTMENTAL APPEAL HAS NO MERIT AND IS, ACCORDINGL Y DISMISSED. 6. THE ASSESSEE IN THE CROSS-OBJECTION RAISED THE I SSUE OF REOPENING OF THE ASSESSMENT U/S. 148 OF THE IT ACT AS WELL NOT COMPL YING WITH THE PROVISIONS OF SECTION 124(4) AND FRAMING ASSESSMENT WITHOUT ISSUA NCE OF NOTICE U/S. 143(2) OF THE IT ACT. WE FIND THAT THE ISSUE OF VALIDITY OF REASS ESSMENT PROCEEDINGS U/S. 148 WAS NOT DECIDED BY THE LD. CIT(A) BECAUSE BOTH THE ADDI TIONS MADE BY THE AO HAVE BEEN DELETED ON MERITS. THEREFORE, IT WAS CONSIDERED MER ELY AS AN ACADEMIC EXERCISE BY 5 THE LD. CIT(A). FURTHER THE OTHER ISSUES RAISED IN THE CROSS-OBJECTION HAVE NOT BEEN DECIDED BY THE LD. CIT(A). SINCE THE ISSUES NOW RAI SED IN THE CROSS-OBJECTION, APART FROM VALIDITY OF PROCEEDINGS U/S. 148, DID NOT ARIS E FROM THE ORDER OF LD. CIT(A) AND HAVING ACADEMIC INTEREST ONLY, THEREFORE, WE DO NOT FIND IT APPROPRIATE TO DECIDE THESE ISSUES AT THIS STAGE. BOTH THE ADDITIONS MADE BY THE AO ON MERITS HAVE BEEN DELETED BY THE LD. CIT(A). ONE OF THE ADDITIONS DEL ETED BY THE LD. CIT(A) HAS BEEN ACCEPTED BY THE REVENUE DEPARTMENT AND OTHER DELETI ON OF ADDITION HAS BEEN CONFIRMED BY US. THEREFORE, NOTHING SURVIVES IN FAV OUR OF ASSESSEE FOR CONSIDERATION IN THE CROSS-OBJECTION. THE CROSS-OBJECTION OF THE ASSESSEE STANDS DISPOSED OF ACCORDINGLY. 7. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED AND CROSS OBJECTION OF ASSESSEE STANDS DISPOSED OF IN TERMS ABOVE. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 7 TH MARCH, 2012 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY