Dr. Amita Mitra, New Delhi V. ITO, New Delhi

ITA 932/DEL/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8184 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 12-04-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 23-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Assessee Lawyers: KRISHAN NARANG
• Keywords: Search and seizure; Opportunity of being heard
• Section: 147; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.932/DEL./2016 (ASSESSMENT YEAR : 2007-08) DR. AMITA MITRA, VS. ITO, WARD 37 (2), C/O NARANG & ASSOCIATES, NEW DELHI. ADVOCATES & SOLICITORS, D 28, LGF, JANGPURA EXTENSION, NEW DELHI 110 014. (PAN : ACIPM9624L) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KRISHAN NARANG, ADVOCATE REVENUE BY : SHRI K.K. JAISWAL, DR DATE OF HEARING : 12.04.2016 DATE OF ORDER : 28.04.2016 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, DR. AMITA MITRA (HEREINAFTER REFERRED TO AS THE ASSESSEE), BY FILING THE PRESENT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 21.12.2015 PASSED BY LD. CIT(A)-20, NEW DELHI QUA THE ASSESSMENT YEAR 2007-08 ON THE GROUNDS INTER ALIA T HAT:- 1. THE LD. COMMISSIONER OF INCOME TAX HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ADDITION OF RS.1,00, 000/- MADE U/S 28(IV) OF INCOME TAX ACT, 1961 ON ACCOUNT OF IS SUANCE OF SWEAT EQUITY SHARES TO HER BY THE COMPANY. ITA NO.932/DEL./2016 2 2. THE LD. COMMISSIONER OF INCOME TAX HAS ERRED IN LAW AND ON FACTS IN IGNORING THE FACE VALUE OF RS.10/- AND TAKING THE NOTIONAL VALUE AT RS.200/- OF EACH SHARE WITHOU T APPRECIATING THAT THERE WAS A LOCK-IN PERIOD OF FIV E YEARS AND NO ACTUAL PROFIT WAS DERIVED BY THE ASSESSEE AND TH E SHARES WERE RETURNED TO THE COMPANY ON HER LEAVING THE JOB . 2. BRIEFLY STATED, THE FACTS OF THIS CASE ARE : ASS ESSEE FILED THE RETURN FOR THE ASSESSMENT YEAR 2007-08 DECLARING INCOME AT RS.2,29,556/- WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE INC OME TAX ACT, 1961 (HEREINAFTER THE ACT). THE CASE WAS SUBSEQUENTLY OPENED FOR REASSESSMENT U/S 147 OF THE ACT ON 08.03.2013 AND C ONSEQUENTLY NOTICES U/S 148 AND 143(2) OF THE ACT WERE SERVED UPON. IN RESPONSE THERETO, SHRI VIRENDER KALRA, CA PUT IN APPEARANCE, FILED NE CESSARY DETAILS, INFORMATION / DOCUMENTS ETC. 3. DURING THE SEARCH AND SEIZURE OPERATION CONDUCTE D U/S 132 OF THE ACT ON 06.09.2011 ON M/S. ROCKLAND GROUP OF CASES, IT WAS FOUND THAT M/S. ROCKLAND HOSPITAL LTD. HAD ISSUED SWEAT EQUITY SHARES WITHOUT ANY AMOUNT BEING PAID AS CONSIDERATION TO THE DIRECTORS/EMPLOYEES/PROFESSIONALS INCLUDING DR. AMI TA MITRA, THE PRESENT ASSESSEE. CONSEQUENTLY, VARIOUS ENQUIRIES AND INFORMATIONS WERE OBTAINED U/S 133 (6) OF THE ACT. DURING THE A SSESSMENT PROCEEDINGS, ASSESSEE ADMITTED TO HAVE RECEIVED 500 EQUITY SHARES OF RS.10/- EACH AS SWEAT EQUITY SHARES FROM M/S. ROCKL AND HOSPITAL LTD. ON 26.02.2007 WITH LOCK-IN PERIOD OF FIVE YEARS AND IN THE OPINION OF MANAGEMENT, POSSIBLY VALUE OF ONE EQUITY SHARE IN Q UESTION AFTER FIVE YEARS COULD BE RS.200/- WHICH WAS A NOTIONAL VALUE ARRIVED AT ON THE ITA NO.932/DEL./2016 3 BASIS OF GUESSWORK. SO, FROM THE FACTS, IT HAS COM E ON RECORD THAT BOOK VALUE OF ONE SHARE IN FINANCIAL YEAR 2006-07 WAS IN FACT LESS THAN ITS FACE VALUE OF RS.10/- AND EVEN AFTER FIVE YEARS, IT HAS REACHED AT THE VALUE OF RS.45.03 AND AS SUCH, ANY OTHER EXPECTED AMOUNT WAS NOTIONAL IN NATURE. THE AO EXAMINED THE ISSUE AS TO THE TAXABILITY OF S WEAT EQUITY SHARES IN THE HANDS OF ASSESSEE AND FOUND THAT THE SAME BE TR EATED AS PROFESSIONAL INCOME IN THE HANDS OF THE ASSESSEE IN VIEW OF THE PROVISIONS U/S 28(IV) OF THE ACT. SO KEEPING IN VIEW THE FACT THAT 500 S HARES OF THE FACE VALUE OF RS.10/- AND PREMIUM OF RS.190/- WAS RECEIVED BY THE ASSESSEE AND CONSEQUENTLY, AN ADDITION OF RS.1,00,000/- HAS BEEN MADE TO THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 28(IV) OF THE ACT. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT (A) WHO HAS DISMISSED THE APPEAL. FEELING AGGRIEVED, THE ASSES SEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT AP PEAL. 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS RELIED UP ON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN THE LIGHT OF TH E FACTS AND CIRCUMSTANCES OF THE CASE. 6. AT THE VERY OUTSET, THE LD. AR FOR THE ASSESSEE CONTENDED THAT IN THE SIMILAR FACTS AND CIRCUMSTANCES, IN CASE OF DR. (MRS.) LONA MOHAPATRA, 1000 SWEAT EQUITY SHARES OF THE VALUE OF RS.10/- EACH WITH PREMIUM OF RS.190/- WERE ISSUED WHO HAS FILED A REV IEW PETITION F.NO.PR.CIT-21/REVIEW PETITION/2015-16 BEFORE PR.CI T, AVAILABLE ON ITA NO.932/DEL./2016 4 THE FILE, U/S 264 OF THE ACT CHALLENGING THE ORDER PASSED BY THE INCOME- TAX OFFICER WHICH HAS BEEN ACCEPTED VIDE ORDER DATE D 30.11.2015, BUT THE SAID ORDER HAS NOT BEEN CONSIDERED BY THE CIT ( A) WHILE PASSING THE IMPUGNED ORDER. THIS FACTUAL POSITION HAS NOT BEEN CONTROVERTED BY THE LD. DR FOR THE REVENUE. 7. SINCE ASSESSEE IN THIS CASE IS SIMILARLY PLACED AS DR. (MRS.) LONA MOHAPATRA, WE ARE OF THE CONSIDERED VIEW THAT WITHO UT ENTERING INTO THE MERITS OF THE CASE, THE MATTER IS REQUIRED TO BE RE STORED TO THE CIT (A) TO PASS FRESH ORDER IN THE LIGHT OF THE ORDER DATED 30 .11.2015 (SUPRA) PASSED BY PR.CIT U/S 264 OF THE ACT. CONSEQUENTLY, FILE I S ORDERED TO BE RESTORED TO THE FILE OF CIT (A) TO DECIDE AFRESH AF TER PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, THE PR ESENT APPEAL FILED BY THE ASSESSEE IS HEREBY ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 28 TH DAY OF APRIL, 2016. SD/- SD/- (N.K. SAINI) (KULDIP SIN GH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 28 TH DAY OF APRIL, 2016 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.