DCIT, Central Circle - XX, Kolkata, Kolkata V. Premlal Jain, Kolkata

ITA 789/KOL/2011

• Counselvise Citation: [2013] 119 COUNSELVISE.COM (IT) 2934 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 23-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S M SURANA P
• Keywords: Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI P.K.BANSAL, A.M. & SHRI MAHAVIR SINGH, J.M. ] I.T.A. NO.789/KOL/2011 ASSESSMENT YEAR : 2004-05 DCIT, CENTRAL CIRCLE-XX, KOLKATA -VS- PREML AL JAIN, KOLKATA PAN : ACVPJ 2348D ( APPELLANT ) ( RESPONDENT ) DATE OF CONCLUDING THE HEARING : 20.03.2013 DATE OF PRONOUNCING THE ORDER : 20.03.2013 APPEARANCES : FOR THE DEPARTMENT : S HRI SANJAY MUKHERJEE, SR.DR : FOR THE RESPONDENT : SHRI S.M. SURANA, AD VOCATE O R D E R PER BENCH : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A), CENTRAL-III, KOLKATA DATED 24.03.2011 FOR THE ASSES SMENT YEAR 2004-05 BY TAKING THE FOLLOWING EFFECTIVE GROUND OF APPEAL. 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF L OSS AMOUNTING TO RS.42,29,964/- CLAIMED TO HAVE BEEN INCURRED IN TR ANSACTIONS OF SHARES OF FIVE COMPANIES, E.G. M/S. AMLUCKI INVESTMENTS LTD. GAUTAM RESOURCES LTD. LIMTEX INVESTMENT LTD. MEDHAVI TRADERS LTD., SHREE SECURITIES LTD. WITHOUT PROPER APPRECIATION OF THE EVIDENCES BROUGHT TO RE CORDS ESTABLISHING HOW THE LOSS WAS BOOKED ON THE BASIS OF FAKE AND BOGUS CONTRACT NOTES ISSUED BY THE SHARE BROKERS AS A RESULT OF WHICH THE LOSS WA S DISALLOWED AS NOT GENUINE AND BOGUS. 2. THE LD. D.R. RELIED ON THE ORDER OF THE AO WHILE THE LD. A.R. REITERATED THE SUBMISSIONS MADE BEFORE THE CIT(A), WHICH ARE GIVEN BY THE CIT(A) UNDER PARA 8,9 AND ALSO THE FINDING OF THE CIT(A) GIVEN UNDER PARA 10 OF HIS ORDER. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE SAME. WE HAVE GONE THROUGH THE ORDERS OF THE CIT(A). WE FIND THAT THE CIT(A) DELETED THE 2 I.T.A. NO.789/ KOL/2011 PREMLAL JAIN A.Y. 2004-05 DISALLOWANCE OF LOSS MADE BY THE AO, AFTER DISCUSSI NG THE SUBMISSIONS OF THE ASSESSEE, REMAND REPORT OF THE AO AND THE REJOINDER OF THE ASSESSEE ALONGWITH THE CASE LAWS RELIED ON UNDER PARA 10, 10.1 ULTIMATELY BY OBSERVING AS UNDER IN PARA 10.2 10.2 IN VIEW OF THE FACTS OF THE CASE THAT ALL THE TRAN SACTIONS WERE CARRIED OUT THROUGH THE RECOGNIZED BROKERS OF THE STOCK EX CHANGE, THE PAYMENTS AND RECEIPTS WERE BY ACCOUNT PAYEE CHEQUES, THE SHARES BOTH AS THE TIME OF PURCHASE AND SALE HAVE BEEN ROUTED THROUGH THE DEM AT ACCOUNT, THERE IS NOT DISPUTE THAT THE TRANSACTIONS WERE ENTERED INTO AT THE PREVAILING MARKET RATES AND FURTHER THAT SOME OF THE TRANSACTIONS EN TERED THROUGH THE SAME BROKERS HAVE BEEN CONSIDERED AS GENUINE, THE ASSES SEE HAS DULY DISCHARGED HIS ONUS TO PROVE THE TRANSACTIONS. THE AO WAS NOT JUSTIFIED IN TREATING THE LOSS AS BOGUS LOSS BECAUSE SOME OTHER ASSESSEE HAS MADE GAIN ON SUCH SHARES OR THAT THERE IS MISMATCH HI THE DATES IN D EMAT ACCOUNTS. THE FACT REMAINS THAT WHEN THE SHARES WERE DEBITED OR CREDI TED TO THE DEMAT ACCOUNT OF THE ASESSEE THERE HAS TO BE CORRESPONDING ENTRY IN SOME OTHER DEMAT ACCOUNT BUT THE AO HAS NOT ENQUIRED THE SAME FROM THE DEMAT ACCOUNT OPERATOR. EVEN IF THE TRANSACTION WAS OFF MARKET T RANSACTION SO LONG THE SAME IS ENTERED INTO AT THE PREVAILING MARKET RATE SUCH TRANSACTION CANNOT BE DOUBTED. THE AO WAS THEREFORE NOT JUSTIFIED IN DISALLOWING THE LOSS IN SHARE TRANSACTIONS AS BOGUS LOSS IN THE HANDS OF T HE ASSESSEE. THE PRINCIPLES LAID DOWN BY THE COURTS ALSO SUPPORTS THE CASE OF THE ASSESSEE. THE ADDITION MADE BY THE AO IS THEREFORE DELETED. 3.1 EVEN THOUGH, THE LD. DR VEHEMENTLY RELIED ON TH E ORDER OF THE AO BUT COULD NOT BRING TO OUR KNOWLEDGE ANY COGENT MATERIALS OR EVIDENCE, WHICH MAY COMPEL US TO TAKE A VIEW CONTRARY TO THE ONE, WHICH HAS BE EN TAKEN BY THE CIT(A). THE CIT(A) HAS DEALT WITH THE ISSUE EXHAUSTIVELY AS WEL L AS ALL THE DOCUMENTS AND EVIDENCES, THE COPIES OF WHICH WERE ALSO FILED BEFO RE US, WHICH, WE PERUSED IN THE COURSE OF HEARING. IN OUR OPINION, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE CIT(A) AND CIT(A) HAS RIGHTLY DELETED THE DISALLOWA NCE MADE IN RESPECT OF LOSS. WE ACCORDINGLY CONFIRM THE ORDER OF THE CIT(A). 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON 20 TH MARCH, 2013. SD/- SD/- (MAHAVIR SINGH) (P. K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20 TH MARCH, 2013 3 I.T.A. NO.789/ KOL/2011 PREMLAL JAIN A.Y. 2004-05 COPY OF THE ORDER FORWARDED TO: 1. PREMLAL JAIN, 4 TH FLOOR, 1, GANESH CHANDRA AVENUE, KOLKATA- 700 013 2. DCIT, CENTRAL CIRCLE-XX, KOLKATA 3. THE CIT(A), KOLKATA 4. CIT, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, ASSTT. REGISTRAR , ITAT, KOLKATA TALUKDAR(SR.P.S.)