Krish Capital Services , Mumbai V. Assistant Commissioner of Income Tax Circle-1 , Raichur

ITA 91/BANG/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4162 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 14-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PALANI KUMAR
• Assessee Lawyers: S SINGHI
• Keywords: Opportunity of being heard; Set aside
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH SMC-B, BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNANT MEMBER ITA NOS. 91 & 92 (BANG) 2019 (ASSESSMENT YEARS : 2009 10 & 2010 11) M/S. KRISH CAPITAL SERVICES, APPELLANT C/O V. SINGHI & ASSOCIATES, CHARTERED ACCOUNTANTS, 61, 6 TH FLOOR, SAKHAR BHAVAN, NARIMAN POINT, MUMBAI. PAN. AAIFK8281H VS ACIT CIRCLE 1, RESPONDENT RAICHUR. ASSESSEE BY : SHRI S. SINGHI, C. A. REVENUE BY : SHRI PALANI KUMAR, ADDL. CIT (DR) DATE OF HEARING : 02-05-2019 DATE OF PRONOUNCEMENT : 10-05-2019 O R D E R PER A. K. GARODIA, A.M.: BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AND THESE ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF CIT (A) KALABURAGI BOTH DATED 29.11.2018. 2. THE ASSESSEE HAS RAISED AS MANY AS 6 GROUNDS IN EACH YEAR. IN COURSE OF HEARING, IT WAS SUBMITTED BY THE LEARNED AR OF THE ASSESSEE THAT ONLY GROUND NO. 5 (A) IN EACH OF THESE TWO YEARS IS IDENTICAL AND ONLY THIS GROUND IS PRESSED IN EACH YEAR AND REMAINING GROUNDS ARE NOT PRESSED IN BOTH YEARS. ACCORDINGLY ALL GROUNDS EXCEPT GROUND NO. 5 (A) IN EACH YEAR ARE REJECTED AS NOT PRESSED AND I REPRODUCE IDENTICAL GROUND NO. 5 (A) WHICH IS TO BE DECIDED. THIS READS AS UNDER:- 5 (A). FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS) AS WELL AS THE ASSESSING OFFICER FAILED TO APPRECIATE THE FACT THAT THE LOSSES ALLEGEDLY TRANSFERRED HAD BEEN INCURRED ON THE PLATFORM OF RECOGNIZED ITA NOS. 91 & 92(BANG)2019 2 STOCK EXCHANGE AND NO PART OF SUCH LOSSES IN ANY CIRCUMSTANCES CAN BE TREATED AS BOGUS AND/OR UNACCOUNTED FOR IN THE CASE OF THE ASSESSEE. 3. IT WAS SUBMITTED BY THE LEARNED AR OF THE ASSESSEE THAT THE WRITTEN SUBMISSIONS FILED BEFORE THE CIT (A) FOR A. Y. 2009 10 AND 2010 11 ARE AVAILABLE ON PAGES 65 TO 75 AND PAGES 45 TO 58 OF THE PAPER BOOK FOR RESPECTIVE YEAR AND IT WAS POINTED OUT THAT IN PARA 6 OF THE SAME AS CAN BE SEEN ON PAGE 75 OF THE PAPER BOOK FOR A. Y. 2009 10 AND ON PAGE 57 OF THE PAPER BOOK FOR A. Y. 2010 11, IT WAS SUBMITTED THAT THE ASSESSEE IS NOT AWARE ABOUT THE MODIFICATIONS DONE BY THE BROKER AND IT WAS ALSO SUBMITTED THAT NEITHER THE DATE NOR THE MANNER, IN WHICH RS. 46,20,991/- IN A. Y. 2009 10 AND RS. 11,79,179/- IN A. Y. 2010 11 WAS DERIVED, WAS MADE AVAILABLE TO THE ASSESSEE. HE POINTED OUT THAT THIS WAS ALSO SUBMITTED THAT THE AO WAS SELECTIVE IN ANALYZING THE DATE AND HAD NOT CONSIDERED THE FACTS AND SUBMISSION OF THE CASE. HE SUBMITTED THAT LEARNED CIT (A) HAS DECIDED THE ISSUE AS PER PARA 2.4 ON PAGE 6 OF HIS ORDER FOR BOTH YEARS BUT ON THESE ASPECTS, NO FINDING IS RECORDED BY HIM. HE POINTED OUT THAT ON PAGE 17 OF THE ASSESSMENT ORDER FOR A. Y. 2009 10, IT IS STATED BY THE AO THAT THE BROKER WAS ISSUED SUMMONS U/S 131 ON 15.12 2016 FOR THE PURPOSE OF CROSS EXAMINATION BY THE ASSESSEE BUT THE BROKER IN ITS REPLY DATED 20.12.2016 MENTIONED THAT ITS NOT POSSIBLE TO BE PRESENT AT THE GIVEN DATE AND TIME FOR PAUCITY OF TIME. HE SUBMITTED THAT THEREFORE, IT IS CLEAR THAT THE ASSESSEE WAS NOT ALLOWED CROSS EXAMINATION OF THE BROKER. HE SUBMITTED THAT IN A. Y. 2010 11, THERE IS NO MENTION OF CROSS EXAMINATION. HE SUBMITTED THAT UNDER THESE FACTS, THE MATTER MAY BE RESTORED TO CIT (A) FOR FRESH DECISION .LEARNED DR OF THE REVENUE SUPPORTED THE ORDER OF AO & CIT (A). 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST I REPRODUCE PARA 2.4 FROM THE ORDER OF CIT (A) FOR A. Y. 2009 10 AS THE ORDER IS IDENTICAL IN BOTH YEARS. THIS PARA IS AS UNDER:- 2.4 IN THE COURSE OF APPELLANT PROCEEDINGS, AS STATED IN EARLIER PARAGRAPHS, THE APPELLANT HAS STRONGLY ARGUED THAT THE ASSESSING ITA NOS. 91 & 92(BANG)2019 3 OFFICER HAS NOT CLEARLY WORKED OUT THE LOSS TRANSFERRED TO THE APPELLANT BY MAKING CLIENT CODE MODIFICATION. HE HAS ALSO ARGUED THAT THE AO HAS NOT FOLLOWED THE NATURAL PRINCIPLES OF JUSTICE BY AFFORDING AN OPPORTUNITY FOR CROSS EXAMINE THE SHARE BROKERS. AT THIS POINT, AS COULD BE SEEN FROM THE ASSESSMENT ORDER, THE AO HAS CLEARLY WORKED OUT THE LOSS TRANSMITTED TO THE APPELLANT BY WAY OF CLIENT CODE MODIFICATION FOR AN AMOUNT OF RS. 46,20,991/-. THIS IS EVIDENT FROM PAGE 9 OF THE ASSESSMENT ORDER. FURTHER, THE ASSESSING OFFICER HAS ALSO GIVEN AN OPPORTUNITY OF BEING HEARD BY GIVING SUMMONS TO THE BROKER. THUS, IT CANNOT BE SAID THAT THE ASSESSING OFFICER HAS NOT CLEARLY WORKED OUT THE LOSS TRANSFERRED THE APPELLANT AND NOT USED THE INFORMATION BEHIND THE BACK OF THE APPELLANT. THIS APART, THE THEORY BROUGHT IN BY THE APPELLANT THAT EVEN IF THE LOSS IS TRANSFERRED BY ONE ASSESSEE TO THIS ASSESSEE THERE IS NO LOSS TO THE REVENUE BECAUSE IN THE HANDS OF THE OTHER ASSESSEE THE LOSS TRANSMITTED COULD NOT HAVE BEEN REDUCED FROM ITS INCOME. THIS THEORY IS NOT ACCEPTED BECAUSE THE TAX HAS TO BE SUFFERED BY A PERSON ON HIS ACTUAL INCOME AND NOT ON FICTITIOUS INCOME. IN OTHER WORDS, A LOSS SUFFERED BY ASSESSEE IS TO BE ASSESSED IN ITS HANDS ONLY AND NOT OTHERS HANDS. THEREFORE, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, NO INTERVENTION ON THE ASSESSMENT ORDER, IS CALLED FOR ON THE ISSUE. 5. I FIND THAT AS PER ABOVE PARA OF THE ORDER OF CIT (A), THERE IS NO FINDING GIVEN BY CIT (A) IN RESPECT OF VARIOUS SUBMISSIONS MADE BY THE ASSESSEE BEFORE HIM AS NOTED IN PARA 3 ABOVE. HENCE, I FEEL IT PROPER TO SET ASIDE THE ORDER OF CIT (A) IN BOTH YEARS AND RESTORE THE MATTER BACK TO HIS FILE FOR A FRESH DECISION BY WAY OF A SPEAKING AND REASONED ORDER ON ALL ASPECTS AND AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES AND AFTER CONSIDERING ALL SUBMISSIONS MADE BEFORE HIM BY BOTH SIDES. I ORDER ACCORDINGLY. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 10 TH MAY, 2019. /MS/ ITA NOS. 91 & 92(BANG)2019 4 COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.