Late Smt.Mamta Goyal, Through her Legal Heir, Sh. Shashank Goyal, Agra V. ITO ward-39(1), New Delhi

ITA 8889/DEL/2019

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 8512 (ITAT-DELHI)
• Duration Of Justice: 3 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 06-11-2022
• Assessment Year: misc
• Appeal Filed On: 13-11-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital Gains
• Section: 234B; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘SMC’: NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA No.8889/DEL/2019 [Assessment Year: 2015-16] Late Smt. Mamta Goyal, Through her Legal Hier, Sh. Shashank Goyal, 145, Kaveri Kunj, Phase-2, Kamla Nagar, Agra Uttar Pradesh-282005 Vs The Income Tax Officer, Ward-39(1), New Delhi PAN-AFLPG5456Q Assessee Revenue Assessee by None Revenue by Sh. Om Parkash, Sr. DR Date of Hearing 07.11.2022 Date of Pronouncement 15.11.2022 ORDER This appeal filed by the assessee is directed against the order of the CIT(A)-13, New Delhi, dated 26.07.2019 pertaining to Assessment Year 2015-16. 2. The grounds of appeal read as under:- 1) The order of the Ld. Commissioner of Income Tax (Appeals) -XIII, New Delhi as well as the Ld. AO is bad in law, wrong on the facts and against the principles of natural 2) That on the facts and in the circumstances of the case, the Ld. Assessing Officer at the outset has erred in issuance of notice and thereby framing a consequential assessment on a deceased person and therefore the order is bad in law and needs to be quashed. 3) That on the facts and in the circumstances of the case, the order of the Ld. CIT (Appeals) and Assessing Officer is against the legal principles of audi alteram partem and therefore the order is bad in law and needs to be quashed. 2 ITA No.8889/Del/2019 4) That on the facts and in the circumstances of the case, the Ld. Assessing Officer and the Ld. CIT(A) have erred in making the arbitrary addition which needs to be deleted. 5) That on the facts and in the circumstances of the case and without prejudice to the above, the issuance of notice u/s 143(2) of the act and the consequential assessment is bad in law and thus void-ab- initio. 6) That on the facts and in the circumstances of the case and without prejudice to the above, the order of the Ld. Assessing Officer is bad in law as the opportunity of cross examination was not provided to the appellant despite of the fact that cross- examination is the sine qua non of due process of taking evidences and no adverse inference can be drawn against a party unless the party is put on a notice of the case made out against him/her. 7) That on the facts and in the circumstances of the case and without prejudice to the above, the order of the Ld. Assessing Officer is devoid of the principles of natural justice as the arbitrary concocted material/information has been used against the appellant without providing the appellant the contents of all such material, both oral and documentary, so that it can prepare to meet the case against it. 8) That on the facts and in the circumstances of the case, even otherwise, the addition so made and sustained by the CIT(A) is wrong, illegal .totally baseless and without any merits keeping in view the facts of the case, the submissions of the appellant ,the relevant law and the judicial pronouncements. 9) That on the facts and circumstances of the case, the Ld. Assessing Officer has erred in law in arbitrarily levying the interest under section 234A, 234B and 234C of the act and initiating penalty proceedings u/s 271 (1)(c) of the Act particularly when the appellant had neither concealed any particulars of income nor had any intention to evade any tax or furnished any inaccurate particulars of income . 3. Brief facts of the case are that the assessee has filed a return showing income of Rs. NIL- on 23.03.2016 which was selected for complete scrutiny. During the course of scrutiny proceedings it was informed vide 3 ITA No.8889/Del/2019 letter dated 22.11.2017 and e-mail dated 24.11.2017 that the assessee Smt. Mamta Goyal expired on 06.04.2014 and that Mr. Shashank Goyal husband of late Smt. Mamta Goyal was her legal heir Accordingly, the notices were issued and served on the legal heir. During the relevant year, it was noted that an amount of Rs. 24,57,699/- was shown as long term capital gains, claimed as exempt u/s 10(38) of the IT Act 1961. 1. The assessee purchased 4700 shares of M/s Essar (India) Ltd (face value Rs. 10) through the broker Uttam Commodities Pvt. Ltd. Kolkata @ Rs. 5 per share on 07.11.2011 in physical mode, by cheque for a sum of Rs. 23,500/-. 2. The shares were split in the year 2012 and the appellant was allotted 47000 with a face value of Rs. 1/- on 22.02.2012 which were converted to Demat account on 12.04.2013 by HDFC Bank Ltd. The shares were sold in August 2014 for Rs. 24,80,000/- i.e. @ approximately 52.76 per share. 3. It was seen that the appellant was not regular investor. Infact even after a windfall profit in this scrip, no further investment was made in shares. 4. The AO has analyzed the financials of the company M/s Essar (India) Ltd. from the website as well as the reports of the various Investigating Agencies which did not justify or support the exponential rise in its share prices. Chronology of Events/Transactions Date Event Amount 2011 Purchase of Share 4700 at the @ Rs.5/- through M/s Uttam Commodities (P) Ltd. in physical mode Rs.23,500/- 02.09.2012 Split of shares in ration of 1:10 12.04.2013 Shoes transference to Demat A/c with HDFC bank Aug. 2014 Sale of 47000 shares of Rs.52.29/- Rs.24,57,699/- 4 ITA No.8889/Del/2019 4. Upon assessee’s appeal, the Ld. CIT(A) elaborately considered the issue. He referred to catena of case laws and was of the opinion that it is penny stock transaction. The Ld. CIT(A) has concluded as under:- “5.4. While Ld. AR has supported his contention citing various decisions of Hon'ble High Courts and ITATs but the final interpretation of the legislative intent and law of the land has been clearly put forth by the Hon'ble Supreme Court in the following three landmark judgments:- • CIT vs. Durga Prasad More [1971] 82 ITR 540 (SC) • Sumati Dayal 214 ITR 801 (SC) • Me Dowell & Co. 154 ITR 148 (SC) 5.5 As can be seen from the magnitude, volume and surgical precision of the entire operation, it was an exercise which was targeted to introduce unaccounted money into the books, that too without paying taxes, by abusing the exemption provisions u/s 10(38) of the statute, to circumvent the law of the land, evade taxes and deprive the exchequer of its rightful due. The plethora of cases quoted by the AO all lend support to his decision, especially in such scam ridden cases, wherein it is essential to pierce the veil of legitimacy and innocence/ ignorance and look behind the charade woven to evade taxes. On the other hand, after due consideration of arguments put forth by the appellant, it is held that the Ld. AR has not been able to controvert/ successfully distinguish the judicial pronouncements quoted by the AO. Accordingly, the addition of Rs.24,57,699/- u/s 68 r.w.s. 115BBE made by the AO, is confirmed.” 6. Against the above order, the assessee is in appeal before us. 7. Nobody has appeared on behalf of the assessee despite several notices which have returned unserved, hence I proceed to adjudicate the issue by hearing the Ld. DR and perusing the records. I note that the assessee’s claim that assessment has been framed on a dead person is totally incorrect. The Assessing Officer has duly framed the assessment in the name of legal heir hence, this ground of the assessee is without any basis. The Ld. DR in this regard submitted that this is a classic case of 5 ITA No.8889/Del/2019 penny stock transaction in which the abnormally high Long Term Capital Gain has been shown and the Ld. DR pleaded that it is a bogus transaction. The Ld. DR referred to catena of case laws in this regard. 8. Upon careful consideration, I find that in this case, clearly penny stock transaction has been entered into. Shares were purchased on 07.11.2011 for a total sum of Rs.23,500/-. After several splitting the shares were sold in August 2014 for a total sum of Rs.24,80,000/- i.e. approximately 52.76 per shares. Such fantastic rise in price of shares of little known/unknown company is totally improbable. The case laws referred by Ld. CIT(A) are germane and fully applicable on the facts here. Hence, I do not find any infirmity in the order of the authorities below and I affirm the order of the Ld. CIT(A). 9. In the result, the appeal of the assessee stands dismissed. Order pronounced in the open court on 15 th November, 2022. Sd/- Sd/- [YOGESH KUMAR US] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER Delhi: 15.11.2022. f{x~{tÜ? f{x~{tÜ?f{x~{tÜ? f{x~{tÜ? Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi