South India Travels Private Ltd., CHENNAI V. ACIT, CHENNAI

ITA 771/CHNY/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68649 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 14-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 19-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Depreciation; Earning of tax free income; Deemed to accrue or arise in india; Corroborative evidences; Revised return; Reason to believe
• Section: 44AD; 147; 148; 28; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER I.T.A. NO. 771/MDS/2013 (ASSESSMENT YEAR :2006-07) M/S SOUTH INDIA TRAVELS PRIVATE LTD., NO.16, ANNA SALAI I BLOCK, FLAT NO.2, 1 ST FLOOR, BAID MEHTA COMPLEX, SAIDAPET, CHENNAI - 600 015. PAN : AAACS 3792 E (APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE VI(3), CHENNAI - 600 034. (RESPONDENT) APPELLANT BY : SH. S. SRIDHAR, ADVOCATE RESPONDENT BY : SH.SHAJI P. JACOB, ADDL.CIT DATE OF HEARING : 14.08.2013 DATE OF PRONOUNCEMENT : 23.08.2013 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL, GRIEVANCE RAISED BY THE ASSESSEE I S THAT CIT(APPEALS) CONFIRMED AN ADDITION OF ` 12,64,99,367/- MADE BY THE ASSESSING OFFICER. I.T.A. NO. 771/MDS/13 2 2. FACTS APROPOS ARE THAT ASSESSEE, A COMPANY ENGAG ED IN TRAVEL SERVICE BUSINESS, HAD FILED ITS RETURN FOR THE IMPU GNED ASSESSMENT YEAR, ON 22.11.2006 DECLARING NIL INCOME. THE SAID RETURN WAS SUBJECTED TO A PROCESSING UNDER SECTION 143(1) OF I NCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). THEREAFTER, A NOTICE UN DER SECTION 148 WAS ISSUED BY THE ASSESSING OFFICER ON 23.2.2011. THE REASON RECORDED FOR THE REOPENING WAS AS UNDER:- SOUTH INDIA TRAVELS PVT. LIMITED, THE ASSESSEE COMP ANY HAS FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 206-07 ON 22.11.2006 WHICH WAS PROCESSED U/S. 143(1) OF THE I .T. ACT, 1961 ON 05.03.2008. IN THE PROFIT AND LOSS ACCOUNT, THE ASSESSEE COMPANY HAS ADMITTED NET INCOME OF ` 9,67,62,083/. HOWEVER, IN SCHEDULE I OF COMPUTATION OF INCOME FROM BUSINESS A ND PROFESSION UNDER COLUMN 8 I.E. ANY OTHER INCOME NO T INCLUDED IN THE PROFIT AND LOSS ACCOUNT, THE ASSESSEE COMPANY HAS DELETED A SUM OF ` 12,64,99,367/- INSTEAD OF ADDING BACK. IN VIEW OF ABOVE, I HAVE REASON TO BELIEVE THAT I NCOME OF THE ASSESSEE COMPANY TO THE EXTENT OF ` 12,64,99,367/- HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 14 7 OF THE I.T. ACT, 1961. ASSESSEE SUBMITTED THE DETAILS OF ` 12,64,99,367/-, CONSIDERED BY THE ASSESSING OFFICER AS ESCAPED INCOME, WHICH READ A S UNDER:- A. PROFIT OF SALE OF INVESTMENT ` 34,45,65,785 B. LESS: INVESTMENT WRITTEN OFF ` 21,81,18,300 C. ADD: INTEREST CONSIDERED SEPARATE LY ` 1,01,864 D. LESS: LOSS ON SALE OF FIXED ASSETS ` 33,376 E. LESS: FBT ` 16,606 ` 12,64,99,367/ - I.T.A. NO. 771/MDS/13 3 SUBMISSION OF THE ASSESSEE WAS THAT THE SAID AMOUNT , WAS A PART OF THE PROFIT & LOSS ACCOUNT AND IT WAS INCLUDED IN IT S PROFITS. ACCORDING TO ASSESSEE, IT REPRESENTED PROFIT ON SALE OF 1,44, 500 SHARES OF A COMPANY CALLED SOUTH INDIA CORPORATION (A) LTD.(IN SHORT SICAL). THE SAID COMPANY BEING A LISTED ONE, AS PER ASSESSE E, SURPLUS ON SALE WAS EXEMPT UNDER SECTION 10(38) OF THE ACT. 3. HOWEVER, ASSESSING OFFICER WAS NOT IMPRESSED WIT H THE ABOVE ARGUMENT. ACCORDING TO HIM, IN THE RETURN FORM USE D BY THE ASSESSEE FOR FILING ITS RETURN, THERE WAS A PARTICULAR SCHED ULE NUMBERED AS SCHEDULE 13,FOR GIVING DETAILS OF EXEMPT INCOME AND ASSESSEE HAD FAILED TO MENTION SUCH AMOUNT THEREIN. HE, THEREFO RE, REJECTED SUCH CLAIM AND MADE AN ADDITION OF ` 12,64,99,367/-. 4. IN ITS APPEAL BEFORE CIT(APPEALS), ARGUMENT OF T HE ASSESSEE WAS THAT ALL SUPPORTING EVIDENCE WITH REGARD TO THE SALE OF THE SHARES RESULTING IN THE GAIN OF ` 12,64,99,367/-, CONSIDERED AS TAXABLE INCOME BY THE ASSESSING OFFICER, HAD BEEN FURNISHED , INCLUDING BROKERS CONTRACTS. AS PER THE ASSESSEE, THE AMOUN T OF ` 12,64,99,367/- WAS A PART OF ITS PROFIT & LOSS ACCO UNT . PROFIT AND LOSS ACCOUNT FORMED A PART OF THE RETURN FORM ITSEL F AND THE ONLY ERROR I.T.A. NO. 771/MDS/13 4 COMMITTED WAS IN DEDUCTING SUCH AMOUNT, AGAINST A W RONG CODE NUMBER. ASSESSEE HAD DEDUCTED ` 12,64,99,367/- AGAINST CODE 2595 INSTEAD OF CODE 2555. AS PER ASSESSEE, ALL T HE DETAILS WERE FILED BEFORE ASSESSING OFFICER TO SHOW THAT IT WAS AN EXEMPT INCOME. ASSESSEE ALSO POINTED OUT THAT IT WAS THE FIRST YEA R OF E-FILING OF RETURN AND THE MISTAKE WAS AN INADVERTENT ONE. 5. HOWEVER, THE CIT(APPEALS) WAS NOT IMPRESSED. AC CORDING TO HIM, ASSESSEE HAD NOT CLAIMED ANY EXEMPTION UNDER S ECTION 10(38) OF THE ACT IN THE ORIGINAL RETURN. IN SCHEDULE 13 OF THE RETURN FORM, IN WHICH ASSESSEE HAD TO SHOW SUCH FIGURE, THE AMOUNT WAS SHOWN AS NIL. THEREFORE, ACCORDING TO LD. CIT(APPEALS), IT WAS A FRESH CLAIM THAT WAS NEVER MADE IN THE ORIGINAL RETURN OF INCOM E. RELYING ON THE DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN T HE CASE OF ADIT (INTERNATIONAL TAXATION) V. LITOSTROJ (2012) 54 SOT (URO) 37, LD. CIT(A) HELD THAT A FRESH CLAIM THAT WAS NOT AVAILAB LE IN THE ORIGINAL RETURN, COULD NOT BE MADE OTHER THAN THROUGH A REVI SED RETURN. NO REVISED RETURN WAS FILED BY THE ASSESSEE. HENCE, A CCORDING TO HIM, THE A.O. WAS JUSTIFIED IN MAKING THE ADDITION. REL IANCE WAS ALSO PLACED ON THE DECISION OF HON'BLE JURISDICTIONAL HI GH COURT IN THE CASE I.T.A. NO. 771/MDS/13 5 OF CIT V. SHRIRAM INVESTMENTS (TCA NO. 344 OF 2005 DATED 16.6.2012). 6. NOW BEFORE US, LEARNED A.R., STRONGLY ASSAILING THE ORDER OF CIT(APPEALS), SUBMITTED THAT IT WAS NOT A CASE WHER E ASSESSEE HAD NOT MADE A CLAIM IN THE ORIGINAL RETURN. TAKING US THROUGH A COPY OF THE RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT Y EAR, PLACED AT PAPER-BOOK PAGES 1 TO 21, LEARNED A.R. SUBMITTED TH AT ASSESSEE HAD IN THE PROFIT & LOSS ACCOUNT APPENDED TO SUCH RETUR N, SHOWN MISCELLANEOUS INCOME OF ` 34,58,73,997/-. AFTER CONSIDERING THE EXPENDITURE FOR THE YEAR, THE PROFIT BEFORE TAXATIO N WAS ` 9,67,62,083/-. THE SAID AMOUNT WAS SHOWN IN SCHEDU LE 1 TO THE RETURN OF INCOME AS NET PROFIT FOR THE RELEVANT PRE VIOUS YEAR. FROM THE SAID AMOUNT, ASSESSEE HAD DEDUCTED ` 12,64,99,367/- AS ANY OTHER INCOME NOT INCLUDED IN THE PROFIT & LOSS ACCOUNT ( CODE 2595) AND ARRIVED AT NIL INCOME FOR THE IMPUGNED ASSESSMENT Y EAR. ACCORDING TO HIM, THE ONLY ERROR COMMITTED BY THE ASSESSEE WA S THAT THE RELEVANT ROW AGAINST WHICH DEDUCTION OF ` 12,64,99,367/- CLAIMED WAS AGAINST CODE 2595, WHEREAS, IT OUGHT HAVE BEEN SHOW N AGAINST CODE 2555. AS PER LEARNED A.R., JUST BECAUSE DEDUCTED A MOUNT WAS SHOWN IN DIFFERENT ROW WOULD NOT MEAN THAT THERE WA S NO CLAIM I.T.A. NO. 771/MDS/13 6 PREFERRED BY THE ASSESSEE IN THE ORIGINAL RETURN. REFERRING TO THE SCHEDULE OF INVESTMENT FORMING PART OF BALANCE SHEE T OF THE ASSESSEE, LEARNED A.R. SUBMITTED THAT THE NUMBER OF EQUITY SHARES HELD BY THE ASSESSEE IN SOUTH INDIA CORPORATION (A) LTD. CAME DOWN FROM 14,45,099 AS ON 31.3.2005 TO 99 AS ON 31.3.200 6. DETAILS OF SALES OF SUCH EQUITY SHARES WERE FURNISHED BEFORE A SSESSING OFFICER. ACCORDING TO HIM, LD. CIT(APPEALS) FELL IN ERROR IN APPLYING THE DECISION OF HON'BLE APEX COURT IN THE CASE OF GOETZ E (INDIA) LTD. V. CIT (284 ITR 323) AND THE DECISION OF HON'BLE JURIS DICTIONAL HIGH COURT IN THE CASE OF SHRIRAM INVESTMENTS (SUPRA) FO R THE SIMPLE REASON THAT IN BOTH THESE CASES, THERE WAS A FRESH CLAIM MADE BY THE ASSESSEE OTHER THAN THROUGH A REVISED RETURN. HERE , THERE WAS NO FRESH CLAIM MADE BY THE ASSESSEE. THE CLAIM WAS VE RY MUCH THERE, BUT MENTIONED AGAINST A WRONG CODE NUMBER IN THE RE TURN OF INCOME. ASSESSEE HAD PRODUCED SUFFICIENT RECORDS TO SHOW TH AT THE INCOME HAD ARISEN OUT OF SALE OF LISTED SHARES. WHEN THER E WAS A SALE OF LISTED SHARES, PROFITS WERE EXEMPT UNDER SECTION 10 (38) OF THE ACT. RELYING ON THE DECISION OF CO-ORDINATE BENCH OF THI S TRIBUNAL IN THE CASE OF ITO V. SRI BALAJI SAGO & STARCH PRODUCTS (2012) 53 SOT 15, LEARNED A.R. SUBMITTED THAT THE DECISION OF HON'BLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA) WAS REQUIRED TO BE CAREFULLY I.T.A. NO. 771/MDS/13 7 APPLIED IN MATTERS OF STATUTORY ALLOWANCES AVAILABL E TO THE ASSESSEE. AS PER LEARNED A.R., THERE WAS GENETIC DIFFERENCE I N THE CONCEPT OF A DEDUCTION BY WAY OF STATUTORY ALLOWANCE AND DEDUCTI ON BY WAY OF OTHER EXPENDITURE. WHAT WAS CLAIMED WAS DEDUCTION BY WAY OF STATUTORY ALLOWANCE. SECTION 10(38) WAS CLEAR IN T HAT, INCOME ARISING FROM A TRANSFER OF EQUITY SHARE HELD AS LONG TERM C APITAL ASSET, WHERE SUCH TRANSACTION WAS CHARGEABLE TO SECURITY TRANSAC TION TAX, WAS EXEMPT. RELIANCE WAS ALSO PLACED ON THE DECISION O F HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT V. PRUTHVI BRO KERS & SHAREHOLDERS PVT. LTD. (349 ITR 336). ACCORDING TO HIM, IN THIS DECISION, HON'BLE BOMBAY HIGH COURT HAD HELD THAT E VEN WHERE ASSESSING OFFICER HAD NOT GRANTED A DEDUCTION ON TH E BASIS OF A LETTER REQUESTING AN AMENDMENT OF THE RETURN FILED, APPELL ATE AUTHORITIES WERE ENTITLED TO CONSIDER THE CLAIM AND ADJUDICATE THE SAME. RELIANCE WAS ALSO PLACED ON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF RAJ RANI GULATI (SMT) V. CIT (346 ITR 543). 7. PER CONTRA, LEARNED D.R., STRONGLY SUPPORTING TH E ORDER OF CIT(APPEALS), SUBMITTED THAT A MISTAKE APPEARING IN THE RETURN SHOULD HAVE BEEN RECTIFIED BY THE ASSESSEE BY FILING A REV ISED RETURN. SECTION 139(3) OF THE ACT WAS MEANT FOR THIS. ASSE SSEE ELECTED ITSELF I.T.A. NO. 771/MDS/13 8 NOT TO FILE A REVISED RETURN. ONCE IT HAD NOT FILE D A REVISED RETURN, ASSESSING OFFICER HAS NO POWER TO CONSIDER A FRESH CLAIM MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HERE, ASSESSEE HAD NOT MADE ANY CLAIM IN THE ORIGINAL RETURN UNDER SEC TION 10(38) OF THE ACT. THE FORM OF RETURNS CLEARLY SPECIFY SCHEDULE 13 FOR SHOWING EXEMPT INCOME. IN SUCH SCHEDULE 13, ASSESSEE HAD S HOWN ONLY A SINGLE ITEM AS EXEMPT, WHICH WAS AGRICULTURAL INCOM E OF ` 4580/-. AGAINST THE COLUMN FOR SHOWING LONG TERM CAPITAL GA INS ON TRANSACTIONS ON WHICH SECURITY TRANSACTION TAX WAS PAID, ASSESSEE HAD SHOWN NIL. THEREFORE, ASSESSEE COULD NOT SAY THAT THERE WAS ANY CLAIM MADE BY IT IN THE ORIGINAL RETURN UNDER S ECTION 138 OF THE ACT. JUST BECAUSE ASSESSEE GAVE A NEGATIVE FIGURE UNDER THE HEAD ANY OTHER INCOME NOT INCLUDED IN THE PROFIT & LOSS ACCOUNT FORMING A PART OF SCHEDULE 1 OF THE RETURN, WOULD NOT MEAN TH AT IT WAS A CLAIM OF EXEMPTION UNDER SECTION 10(38) OF THE ACT. FURT HER, AS PER LEARNED D.R., THIS WAS NOT AN ORIGINAL ASSESSMENT, BUT A RE OPENED ASSESSMENT. IN SUCH REOPENED ASSESSMENT, NO FRESH CLAIM COULD HAVE BEEN MADE BY THE ASSESSEE BY VIRTUE OF DECISIO NS OF HON'BLE APEX COURT IN THE CASE OF CIT V. SUN ENGINEERING WO RKS PVT. LTD. (1992) (198 ITR 297) AND IN THE CASE OF CHETTINAD C ORPORATION PVT. LTD. V. CIT (200 ITR 320). HON'BLE JURISDICTIONAL HIGH COURT IN THE I.T.A. NO. 771/MDS/13 9 CASE OF SHRIRAM INVESTMENTS (SUPRA) HAD CLEARLY HEL D THAT FOR MAKING A CLAIM OTHER THAN WHAT WAS ORIGINAL MADE, A REVISE D RETURN WAS MANDATORY. THEREFORE, ACCORDING TO HIM, THE FRESH CLAIM MADE BY THE ASSESSEE WAS CORRECTLY DISALLOWED BY THE ASSESSING OFFICER AND ADDITION MADE. 8. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. A COPY OF THE RETURN OF INCOME HAS BEEN FILED BY TH E ASSESSEE BEFORE US. WE HAVE CAREFULLY GONE THROUGH THIS RETURN IN FORM NO.1 APPEARING AT PAPER-BOOK PAGES 1 TO 21. ASSESSEE H AD ARRIVED AT PROFIT BEFORE TAX OF ` 9,67,62,083/-, IN THE P&L ACCOUNT, FALLING IN PART A OF THE RETURN OF INCOME. THIS AMOUNT OF ` 9,67,62,083/-, WAS CARRIED TO SCHEDULE 1, VIZ. COMPUTATION OF INCOME F ROM BUSINESS OR PROFESSION, WHICH IS AGAIN A PART OF THE RETURN. T HIS PARTICULAR SCHEDULE 1 IS REPRODUCED HEREUNDER:- SCHEDULE 1: COMPUTATION OF INCOME FROM BUSINESS OR PROFESSI ON A . FROM BUSINESS OR PROFESSION OTHER THAN SPECULATIVE BUSINESS 1. NET PROFIT OR LOSS AS PER CONSOLIDATED PROFIT AND L OSS ACCOUNT 2500 96762083 2. NET PROFIT OR LOSS FROM SPECULATIVE BUSINESS INCLUD ED IN (I) 2505 NIL 3. NET PROFIT OR LOSS AS PER PROFIT AND LOSS ACCOUNT F ROM BUSINESS OR PROFESSION OTHER THAN SPECULATIVE BUSINESS [(1) (2)] 2510 96762083 I.T.A. NO. 771/MDS/13 10 4. INCOME / RECEIPTS CREDITED TO PROFIT AND LOSS ACCOU NT CONSIDERED UNDER OTHER HEADS OF INCOME 2515 591892 5. EXPENDITURE DEBITED TO PROFIT AND LOSS ACCOUNT CONSIDERED UNDER OTHER HEADS OF INCOME 2520 NIL 6. BALANCE PROFIT AND LOSS AS PER PROFIT AND LOSS ACCO UNT [(3)-(4)+(5)] 2525 96170191 7. AMOUNT CLAIMED DEDUCTIBLE UNDER SECTIONS 10A/10AA/10B/10BA (SCH.-9) 2530 NIL 8. PROFIT OR LOSS FROM BUSINESS REFERRED TO IN FOLLOWI NG SECTIONS INCLUDED IN (6) ABOVE. (A) SECTION 44AD 2535 NIL (B) SECTION 44AE 2536 NIL (C) SECTION 44AF 2537 NIL (D) SECTION 44BB 2538 NIL (E) SECTION 44BBA 2539 NIL (F) SECTION 44BBB 2540 NIL 9. BALANCE PROFIT OR LOSS (6) [(7)+TOTAL OF (8)(A) TO (8)(F)] 2550 96170191 10. NET INCOME INCLUDED IN (9) WHICH IS EXEMPT (A) EXEMPT INCOME (SCH. 13) 2555 4580 (B) SHARE OF INCOME FROM FIRM(S) 2556 NIL (C) SHARE OF INCOME FROM AOP / BOI 2557 NIL 11. PROFIT OR LOSS (9) [TOTAL OF (10)(A) TO (10)(C)] 2560 96165611 12. DEPRECIAT ION DEBITED TO PROFIT AND LOSS ACCOUNT INCLUDED IN (11) 2565 2049225 13. DEPRECIATION ALLOWABLE UNDER THE INCOME - TAX ACT (SCH. 3) 2570 NIL 14. PROFIT OR LOSS AFTER ADJUSTMENT FOR DEPRECIATION (11) + (12) (13) 2575 98214836 15. ADJUSTMENTS IN AC CORDANCE WITH SECTION 28 TO 44 2580 NIL 16. DEEMED INCOME U/S 33AB/33ABA/35ABB/41/72A/ 80HHD/80-IA 2585 NIL 17. PROFIT OR GAINS COMPUTED U/S 44AD/44AE/44AF/ 44BB/44BBA/44BBB 2590 NIL 18. ANY OTHER INCOME NOT INCLUDED IN PROFIT AND LOSS ACCOUNT 2595 - 126499367 19. PROFIT OR LOSS FROM BUSINESS OR PROFESSION [(14)+(15)+(16)+(17)+(18)] 2600 - 28284531 B: COMPUTATION OF INCOME FROM SPECULATIVE BUSINESS 20. NET PROFIT OR LOSS FROM SPECULATIVE BUSINESS AS PER PROFIT OR LOSS ACCOUNT 2605 NIL 21. ADJUSTMENT IN ACCORDANCE WITH SECTIONS 28 TO 44AD INCLUDING DEPRECIATION 2610 NIL 22. PROFIT OR LOSS FROM SPECULATIVE BUSINESS (20) + (21 ) 2615 NIL I.T.A. NO. 771/MDS/13 11 C: INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS 23. INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS [(19) + (22)] 599 - 28284531 9. THE SUMS OF ` 12,64,99,367/- SHOWN BY THE ASSESSEE AGAINST SL. NO.18 OF THE ABOVE COMPUTATION IS MARKED IN THE NEGATIVE. IN OTHER WORDS, IT IS CLAIMED AS A DEDUCTION. CASE OF THE REVENUE IS THAT IF THE SAID SUM WAS AN EXEMPT INCOME, IT SHOUL D HAVE COME IN ITEM NO.(A) OF SL.NO.10 OF THE SAME SCHEDULE. THE SAID ITEM MENTIONS ABOUT EXEMPT INCOME. SCHEDULE 13 OF THE R ETURN MENTIONED AT SERIAL NO.10 IS REPRODUCED HEREUNDER:- SCHEDULE 13 INCOME NOT INCLUDED IN TOTAL INCOME (EXEMPT INCOMES) (A) INTEREST 5501 NIL (B) DIVIDEND INCOME 5503 NIL (C) LONG - TERM CAPITAL GAINS FROM TRANSACTIONS ON WHICH SECURITIES TRANSACTION TAX PAID 5503 NIL (D) AGRICULTURAL INCOME 5505 4580 (E) OTHERS 5504 NIL (F) TOTAL 5520 4580 AGAINST ITEM NO.(C), ASSESSEE HAD SHOWN THE AMOUNT NIL. THERE IS NO DISPUTE THAT DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, ASSESSEE HAD GIVEN A WORK OUT AS TO HOW THE SUM OF ` 12,64,99,367/- WAS ARRIVED AT WHICH WORK OUT HAS BEEN REPRODUCED B Y US AT PARA-2 ABOVE. AT THE SAME TIME, WE ALSO FIND THAT IN PART A OF THE RETURN I.T.A. NO. 771/MDS/13 12 FORM UNDER THE HEAD OTHER INFORMATION, AGAINST TH E HEAD FUNDS RAISED / INFLOW DURING THE PREVIOUS YEAR, THE FOLL OWING DATA WERE GIVEN:- OTHER INFORMATI ON (ITEMS 9 TO 21 ARE OPTIONAL IN A CASE NOT LIABLE FO R AUDIT UNDER SECTION 44AB) 1. FUNDS RAISED / INFLOW DURING THE PREVIOUS YEAR B Y WAY OF (A) EQUITY SHARE 9500 - (B) PREFERENCE SHARE 9505 - (C) SIMILAR INSTRUMENTS 9510 - (D) BONDS 9520 - (E) D EBENTURES 9520 - (F) SECURED LOANS 9525 - (G) UNSECURED LOANS 9530 - (H) EXTERNAL COMMERCIAL BORROWINGS 9535 - (I) TERM LOANS FROM - (1) FINANCIAL INSTITUTIONS (2) SCHEDULED BANKS 9540 9545 - - (J) SALE OF INSTRUMENTS HELD AS INVESTMENT 9550 34456 5785 (K) DIVIDENDS AND INTEREST RECEIVED OTHER THAN RECEIVED BY FINANCIAL ENTERPRISES 9555 693758 2. TOTAL [1(A) TO 1(K)] 9660 34525 9541 10. THE SALE OF INSTRUMENTS HELD AS INVESTMENT WAS SHOWN BY THE ASSESSEE. NO DOUBT, IT MIGHT BE TRUE THAT AUDITE D PROFIT & LOSS ACCOUNT AND SCHEDULES WERE FILED BY THE ASSESSEE ON LY DURING THE COURSE OF ASSESSMENT PROCEEDINGS, SINCE THE RETURN WAS E-FILED. BUT, SCHEDULE 6 OF SUCH AUDITED ACCOUNTS CLEARLY INDICAT ES THAT ASSESSEE HAD SOLD SUBSTANTIAL NUMBER OF EQUITY SHARES IN M/S .SICAL DURING THE RELEVANT PREVIOUS YEAR. THE HOLDING HAD COME DOWN 14,45,099 SHARES TO A MERE 99 SHARES BY THE END OF THE PERIOD . IN THESE I.T.A. NO. 771/MDS/13 13 CIRCUMSTANCES IT MIGHT BE DIFFICULT TO COME TO A CO NCLUSION THAT THERE WAS NO CLAIM IN THE RETURN AT ALL. 11. MOST IMPORTANT FACT THAT WE NOTICE IS THAT THE ASSESSEE HAD SHOWN NIL INCOME IN THE RETURN OF INCOME. ONL Y ADDITION MADE BY THE ASSESSING OFFICER WAS THE SUM OF ` 12,64,99,367/-. HAD THE ASSESSEE NOT CLAIMED SUCH SUM EITHER AS A DEDUCTION OR AS AN EXEMPTION, THEN THE INCOME RETURNED WOULD NOT HAVE BEEN NIL. IT MIGHT BE TRUE THAT THE ASSESSEE HAD DEDUCTED THE AM OUNT AGAINST A WRONG CODE NO.2595 IN THE RETURN AND OMITTED TO SHO W AGAINST THE CORRECT CODE 2555. ASSESSEE MIGHT HAVE ALSO FAILED TO SHOW IT CORRECTLY IN SCHEDULE 13 OF THE RETURN. NEVERTHELE SS, IT IS A FACT THAT A CLAIM WAS ALREADY THERE. WE ARE INCLINED, THEREFOR E, TO ACCEPT THE CONTENTION OF THE LEARNED A.R. THAT THE CLAIM WAS I NDEED THERE, BUT ERRONEOUSLY SHOWN AGAINST DIFFERENT SERIAL NUMBER. LEARNED D.R. HAS NOT DISPUTED THAT THIS WAS THE FIRST YEAR OF FILING E-RETURNS. THE RETURN WAS ORIGINALLY SUBJECTED ONL Y TO A PROCESSING UNDER SECTION 143(1) OF THE ACT AND THERE WAS NO OC CASION FOR THE ASSESSEE TO SUBMIT A DETAILED COMPUTATION BEFORE TH E ASSESSING OFFICER, BUT IN THE PROCEEDINGS SUBSEQUENT TO THE R EOPENING. IN SUCH PROCEEDINGS, ASSESSEE HAD INDEED BROUGHT TO THE ATT ENTION OF THE I.T.A. NO. 771/MDS/13 14 A.O. THAT THE SUM OF ` 12,64,99,367/- SHOWN BY IT AT CODE 2595 WAS NOTHING BUT INCOME EXEMPT UNDER SECTION 10(38) OF THE ACT, BEING SALE OF LISTED SHARES. IN SUCH A SITUATION, WE CAN NOT SAY THAT IT WAS A FRESH CLAIM MADE BY THE ASSESSEE. ONLY MISTAKE WAS THAT IT WAS SHOWN AGAINST A WRONG SERIAL NUMBER. ASSESSING OFF ICER NEVER QUESTIONED THE WORKED OUT BASED ON WHICH THE ASSESS EE HAD ARRIVED THE SUM OF ` 12,64,99,367/-. EVEN OTHERWISE ALL DEDUCTIONS CL AIMED BY THE ASSESSEE FROM ITS RECEIPTS OF `39,85,44,303 /- WERE ALLOWED. 12. COMING TO THE CASE OF SHRIRAM INVESTMENTS (SUPR A),STRONGLY RELIED ON BY THE LD. D.R. NO DOUBT IT WAS HELD THE REIN THAT FOR MAKING A CLAIM OTHER THAN WHAT WAS MADE IN THE ORIGINAL RE TURN OF INCOME, FILING OF REVISED RETURN WAS MANDATORY. BUT, IN OU R OPINION, THE CIT(APPEALS) FELL IN ERROR IN PLACING RELIANCE ON T HE ABOVE DECISION SINCE HERE, THERE WAS A CLAIM AVAILABLE IN THE RETU RN OF INCOME, BUT, THERE WAS ONLY A MISTAKE IN THE CODE UNDER WHICH TH E CLAIM WAS MADE. INSOFAR AS THE DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF LITOSTROJ(SUPRA), THERE, DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, ASSESSEE CONCERNED PREFERRED A FRESH CLAIM UNDER SECTION 44BBB OF THE ACT AND SUBSTITUTED THE ORIGIN AL COMPUTATION WITH REVISED COMPUTATION. HERE, THERE WAS NO SUCH SUBSTITUTION. I.T.A. NO. 771/MDS/13 15 ASSESSEE ONLY POINTED OUT THAT THE DEDUCTION OF ` 12,64,99,367/- MADE BY IT AT CODE NO.2595 WAS ACTUALLY A CLAIM OF EXEMPTION UNDER SECTION 10(38) OF THE ACT. NO DOUBT, HON'BLE APEX COURT IN THE CASE OF SUN ENGINEERING WORKS PVT. LTD. (SUPRA) AS WELL AS IN THE CASE OF CHITTINAD CORPORATION PVT. LTD. (SUPRA) HELD THAT P ROVISIONS OF REASSESSMENT WERE INTENDED ONLY FOR THE BENEFIT OF THE REVENUE AND ASSESSEE COULD NOT ASK FOR A REVIEW OF A CONCLUDED ITEM UNCONNECTED WITH THE ESCAPEMENT OF INCOME. THESE DECISIONS, RE LIED ON BY THE LEARNED D.R., IN OUR OPINION, HAVE NO RELEVANCE HER E. ASSESSEE HAD NOT MADE ANY CLAIM UNCONNECTED WITH THE ITEM OF INC OME ALLEGED TO HAVE BEEN CONCEALED BY IT, NOR IT HAD RAISED A FRES H CLAIM GENETICALLY DIFFERENT FROM ONE WHICH WAS MADE IN THE RETURN OF INCOME. EXEMPTION UNDER SECTION 10(38) IS A STATUTORY ALLOW ANCE FOR LONG TERM CAPITAL GAINS ARISING OUT OF SALE OF LISTED EQ UITY SHARES ON WHICH SECURITIES TRANSACTION TAX HAVE BEEN PAID. IT IS N OT A CASE OF CLAIM FOR DEDUCTION BY WAY OF EXPENDITURE. ASSESSEE WAS ENTI TLED TO SUCH CLAIM AND IT COULD NOT HAVE BEEN DENIED FOR A TECHN ICAL REASON THAT THE SERIAL NUMBER AGAINST WHICH THE CLAIM WAS MADE IN THE RETURN OF INCOME WAS INCORRECT. WE ARE THUS OF AN OPINION T HAT THIS WAS NOT A CASE OF FRESH CLAIM WARRANTING APPLICATION OF DECIS ION OF HON'BLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA). ASSESSEE WAS I.T.A. NO. 771/MDS/13 16 ENTITLED TO CLAIM EXEMPTION UNDER SECTION 10(38) FO R THE IMPUGNED ASSESSMENT YEAR. NEVERTHELESS, NONE OF THE AUTHORI TIES HAD VERIFIED WHETHER THE SUM OF ` 12,64,99,367/- EFFECTIVELY REPRESENTED SALE PROCEEDS OF LISTED SECURITIES. FOR VERIFYING THIS LIMITED ASPECT, WE ARE SETTING ASIDE THE ORDERS OF AUTHORITIES BELOW AND R EMITTING THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER. WE MAKE IT CLEAR THAT IF THE ASSESSEE IS ABLE TO SHOW THAT SUCH AMOUNT WAS LONG TERM CAPITAL GAINS ARISING OUT OF SALE OF LISTED SECURITIES ON W HICH SECURITY TRANSACTION TAX HAD BEEN PAID, IT WOULD BE ELIGIBLE FOR THE CLAIM OF EXEMPTION UNDER SECTION 10(38) OF THE ACT. 13. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE COURT ON FRIDAY, THE 23 RD OF AUGUST, 2013, AT CHENNAI. SD/- SD/- (V.DURGARAO) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 23 RD AUGUST, 2013. KRI. COPY TO: APPELLANT/RESPONDENT/CIT(A)-V, CHENNAI-34/ CIT, CHENNAI-III, CHENNAI/D.R./GUARD FILE