ANKITA MARDIA, CHENNAI V. ITO NON CORPORATE WARD-9(1), CHENNAI

ITA 9/CHNY/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4029 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 03-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of cross examination; Benefit of exemption; Set aside
• Section: 143(2); 147; 68; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI , . , & BEFORE SHRI MAHAVIR SINGH, VICE-PRESIDENT AND SHRI G.MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO.9/CHNY/2020 ( / ASSESSMENT YEAR: 2014-15) MRS.ANKITA MARDIA, 2B, SATRUNJAY APARTMENTS, 42/57, VEPERY, CHENNAI. VS ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE WARD-9(1), CHENNAI-600 034. PAN:ADGPA7764A ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : NONE /RESPONDENT BY : MR. AR.V.SREENIVASAN , ADDL. CIT /DATE OF HEARING : 27.10.2020 /DATE OF PRONOUNCEMENT : 27.10.2020 / O R D E R PER G.MANJUNATHA, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AG AINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)-10, CHENNAI DATED 15.10.2019 AND IT PERTAINS TO ASSESS MENT YEAR 2014-15. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LD. AO ERRED IN REJECTING THE CLAIM OF EXEMP TION U/S 10(38) ON THE LTCG EARNED ON SALE OF SHARES. 2. THE LD AO ERRED IN REJECTING THE TRANSACTIONS DO NE ON THE SALE OF SHARES WHICH WERE THROUGH RECOGNISED STOCK EXCHANGE ON WHICH STT WAS PAID AND ALL THE TRANSACT IONS WERE DONE THROUGH BANKING CHANNELS. 3. THE LD AO ERRED IN TREATING THE LTCG EARNED AS UNEXPLAINED U/S 68 OF THE I.T ACT 1961. 4. THE LD AO ERRED IN NOT ALLOWING THE COST OF INVE STMENT MADE OF RS. 100000 ON PURCHASE OF SHARES. 2 ITA NO.9/CHNY/2020 5. THE LD AO HAD JUST DECIDED TO IGNORE THE DOCUMEN TARY EVIDENCES PRODUCED IN SUPPORT OF OUR CLAIM AND RELY ON A STATEMENT GIVEN BY A PERSON WITHOUT GIVEN AN OPPORT UNITY TO CROSS EXAMINE. WITHOUT PREJUDICE TO THE ABOVE 6. THE ADDITIONS MADE BY THE A 0 WERE BASED ON GUES SWORK, CONJECTURES AND SURMISES. 7. THE LD AO ERRED IN ALLEGING THAT UNEXPLAINED MON EY OF THE APPELLANT HAD BEEN CHANNELIZED THROUGH BANK AND SHA RE TRANSACTIONS. 8. THE LD AO ERRED IN COMING TO A CONCLUSION THAT T HE APPELLANT AND THE BROKER COLLUDED IN BRING THE UNAC COUNTED MONEY OF THE APPELLANT. 9. THE LD AO HAD RELIED ON A STATEMENT GIVEN BY A T HIRD PERSON WITHOUT GIVING A COPY OF THE SWORN STATEMENT AND AN OPPORTUNITY OF CROSS EXAMINATION. 10. THE LD CIT(A) HAD NOT CONSIDERED THE ADDITIONAL GROUND RAISED ON NON ISSUANCE OF THE MANDATORY NOTICE U/S 143(2) AFTER FILING OF THE RETURN U/S 148. 11. NOTICE ISSUED U/S 148 IS BAD IN LAW. 12. AS THERE WAS NO ADDITION MADE BASED ON THE REAS ONS FOR REOPENING, THE ADDITION MADE BY DISALLOWING THE CLA IM MADE U/S 10(38) IS BAD IN LAW. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND FILED HER RETURN OF INCOME FOR THE ASSESSMEN T YEAR 2014-15 ON 22.09.2014 DECLARING TOTAL INCOME OF ` 2,82,200/-. THE CASE HAS BEEN SUBSEQUENTLY REOPENED UNDER SECTION 147 OF T HE ACT ON THE BASIS OF THE INFORMATION RECEIVED FROM INVESTIGA TION WING, KOLKATA THAT THE ASSESSEE HAD DEALT IN SHARES OF M/S. KAILASH AUTO FINANCE LTD., WHICH WAS HELD TO BE PENNY STOCK AN D ALL TRANSACTIONS OF PURCHASE AND SALE OF SHARES OF T HIS COMPANY WAS 3 ITA NO.9/CHNY/2020 FOUND TO BE COLLUSIVE, NON-GENUINE AND CAPITAL GA INS WERE FOUND TO BE MANAGED TO CLAIM THE BENEFIT OF EXEMPTION U/S.1 0(38) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). THE ASSESSMENT HAS BEEN COMPLETED U/S.143(3) READ WIT H SECTION 147 OF THE ACT AND DETERMINED TOTAL INCOME OF ` 41,98,750/-, INTER-ALIA, MAKING ADDITION OF ` 39,16,550/- TOWARDS SALE CONSIDERATION RECEIVED FROM SALE OF SHARES OF M/S. KAILASH AUTO FINANCE LTD. UNDER SECTION 68 OF THE ACT. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. THE LE ARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE EX-PARTE FOR NON-APPEARANC E, HOWEVER NOT DISCUSSED THE ISSUE OF ADDITIONS TOWARDS CONSID ERATION RECEIVED ON SALES OF SHARES U/S.68 OF THE ACT. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A), THE ASSESSEE IS IN APPEAL BEFOR E US. 4. NONE APPEARED FOR THE ASSESSEE . WE HAVE HEARD THE LEARNED D.R., PERUSED THE MATERIAL AVAILABLE ON RECORD AN D GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND THAT T HE LEARNED CIT(A) HAS DISPOSED OFF THE APPEAL FILED BY THE ASSESS EE EX-PARTE FOR NON-PROSECUTION AS THE ASSESSEE NEITHER APPEARED NOR FILED ANY DETAILS TO JUSTIFY ITS CASE. NO DOUBT, IT IS THE OBLIGATION OF THE 4 ITA NO.9/CHNY/2020 PERSON WHO FILES APPEAL, GO BEFORE THE AUTHORITIES , WHEN THE APPEAL IS CALLED FOR HEARING TO JUSTIFY ITS CASE . IN CASE, THE ASSESSEE DID NOT CHOOSE TO APPEAR BEFORE THE AUTH ORITIES, THEN THE APPELLATE AUTHORITY LEFT WITH NO OPTION BUT TO D ISPOSE OFF THE APPEAL ON THE BASIS OF MATERIALS AVAILABLE ON RECORD, BUT THE SAID APPEAL NEEDS TO BE DISPOSED OFF ON MERITS ON THE BASIS OF MATERIALS AVAILABLE ON RECORD. IN THIS CASE, ON PERUSAL OF THE ORDER OF THE LEARNED CIT(A), WE FIND THAT THE LEARNED CIT(A) H AS DISPOSED OFF THE APPEAL FOR NON-APPEARANCE WITHOUT DISCUSSING THE ISSUES INVOLVED IN THE APPEAL ON MERITS. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE NEEDS TO GO B ACK TO THE FILE OF THE LEARNED CIT(A) TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO FILE NECESSARY EVIDENCE IN SUPPORT OF ITS CASE. HE NCE, WE SET ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER BACK TO T HE FILE OF LEARNED CIT(A) AND DIRECT HIM TO RECONSIDER THE ISSUES AFTER PROVIDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. NEEDLESS TO SAY THE ASSESSEE SHALL GO BEFORE THE C IT(A) WITHOUT SEEKING ANY ADJOURNMENT UNLESS OR OTHERWISE WARRA NTS UNDER EXTREME CIRCUMSTANCES. 5 ITA NO.9/CHNY/2020 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH OCTOBER, 2020 SD/- SD/- ( ) ( . ) (MAHAVIR SINGH) (G. M ANJUNATHA ) / VICE-PRESIDENT $ / ACCOUNTANT MEMBER & /CHENNAI, ' /DATED 27 TH OCTOBER, 2020 DS )* +* /COPY TO: 1. APPELLANT 2. RESPONDENT 3. , () /CIT(A) 4. , /CIT 5. * 1 /DR 6. /GF .