Urmila Hirawat, CHENNAI V. ITO Non Corporate Ward 6(3), CHENNAI

ITA 912/CHNY/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1025 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 16-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: S SRIDHAR
• Keywords: Penny stocks
• Section: 14A

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL A SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ ITA NO.912/CHNY/2018 ' #$' / ASSESSMENT YEAR : 2013-14 SMT. URMILA HIRAWAT, NO.217, WALTAX ROAD, SOWCARPET, CHENNAI - 600 079. PAN : AAMPU 4556 F V. THE INCOME TAX OFFICER, NON CORPORATE WARD -6(3), CHENNAI. (&'/ APPELLANT) (()&'/ RESPONDENT) &' * + / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE ()&' * + / RESPONDENT BY : SHRI B. SAGADEVAN, JCIT , # * -. / DATE OF HEARING : 05.09.2018 /0$ * -. / DATE OF PRONOUNCEMENT : 11.09.2018 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-5, CHENNAI, DA TED 12.01.2018 AND PERTAINS TO ASSESSMENT YEAR 2013-14. 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS ADDI TION OF 13,73,020/-. 3. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THE ASSESSEE CLAIMED LONG TERM CAPITAL GAIN IN SALE OF SHARES UNDER SECTION 10(38) OF THE INCOME-TAX ACT, 1961 (IN SHOR T 'THE ACT'). ACCORDING 2 I.T.A. NO.912/CHNY/18 TO THE LD. COUNSEL, THE ASSESSING OFFICER DISALLOWE D THE CLAIM OF THE ASSESSEE ON THE GROUND THAT IT IS A PENNY STOCK. A CCORDING TO THE LD. COUNSEL, THE MATERIAL REFERRED IN THE ASSESSMENT OR DER AND ORDER OF THE CIT(APPEALS) AND THE SO-CALLED REPORT OF THE INVEST IGATION WING OF THE DEPARTMENT AT KOLKATA WERE NOT FURNISHED TO THE ASS ESSEE. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE ASSESSEE COULD N OT UNDERSTAND WHAT IS THE ACTUAL REASON FOR DISALLOWANCE. MOREOVER, THE STATEMENTS SAID TO BE RECORDED FROM VARIOUS PERSONS WERE ALSO NOT FURNISH ED TO THE ASSESSEE. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. 4. ON THE CONTRARY, SHRI B. SAGADEVAN, THE LD. DEPA RTMENTAL REPRESENTATIVE, SUBMITTED THAT IT IS A PENNY STOCK TRANSACTION. ACCORDING TO THE LD. D.R., THE EQUITY SHARES OF SHELL COMPANI ES WERE TRANSACTED AND THE PRICE OF EACH SHARE WAS ARTIFICIALLY INCREASED. ACCORDING TO THE LD. D.R., THE INVESTIGATION WING OF THE DEPARTMENT AT K OLKATA FOUND THAT THERE WAS CARTEL AMONG THE BROKERS WHO ARE ALL INVO LVED IN PENNY STOCKS OF SHELL COMPANIES. THEREFORE, ACCORDING TO THE LD . D.R., THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED THE CLAIM OF THE ASS ESSEE UNDER SECTION 10(38) OF THE ACT. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER, ON THE BASIS OF GENERALISED ALLEGATION, DI SALLOWED THE CLAIM OF THE 3 I.T.A. NO.912/CHNY/18 ASSESSEE UNDER SECTION 10(38) OF THE ACT. THERE WA S NO SPECIFIC REFERENCE ABOUT THE ASSESSEES TRANSACTIONS IN THE ASSESSMENT ORDER. MOREOVER, THE SO-CALLED INVESTIGATION REPORT SAID T O BE SUBMITTED BY THE INVESTIGATION WING OF THE DEPARTMENT AT KOLKATA AND OTHER STATEMENTS SAID TO BE RECORDED FROM VARIOUS PERSONS WERE NOT F URNISHED TO THE ASSESSEE. THEREFORE, THIS TRIBUNAL IS OF THE CONSI DERED OPINION THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFF ICER. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO FURNISH THE INVESTIGATION RE PORT OF THE DEPARTMENT AT KOLKATA AND THE STATEMENTS SAID TO BE RECORDED FROM VARIOUS PERSONS TO THE ASSESSEE AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE A SSESSEE. 6. THE ASSESSEE HAS RAISED ONE MORE GROUND WITH REG ARD TO DISALLOWANCE MADE UNDER SECTION 14A OF THE ACT. 7. DURING THE COURSE OF HEARING, THE LD.COUNSEL FOR THE ASSESSEE VERY FAIRLY SUBMITTED THAT HE IS NOT PRESSING THIS ISSUE. THEREFORE, THE ISSUE WITH REGARD TO DISALLOWANCE UNDER SECTION 14A OF THE ACT IS CONFIRMED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 4 I.T.A. NO.912/CHNY/18 ORDER PRONOUNCED IN THE COURT ON 11 TH SEPTEMBER, 2018 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED, THE 11 TH SEPTEMBER, 2018 KRI. * (-34 54$- /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. , 6- () /CIT(A)-5, CHENNAI-34 4. PRINCIPAL CIT-9, CHENNAI 5. 4#7 (- /DR 6. 8' 9 /GF.