Shri Ravindra M.Jajodia, Baroda V. The ACIT.,Circle-2(2), Baroda

ITA 935/AHD/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6071 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-06-2014
• Assessment Year: 1998-1999
• Appeal Filed On: 30-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ITA NO.935/AHD/2011 A.YS. 1998-99 SHRI RAVINDRA M. JADODIA, C/O MANISH SHAH & ASSOCIATES, 101/38, RACE COURSE CIRCLE, BARODA. PAN: ABQPJ 7679B VS ACIT, CIRCLE-2(2), BARODA. (APPELLANT) (RESPONDENT) REVENUE BY : MISS SURABHI SHARMA, SR.D.R., ASSESSEE(S) BY : URVASHI SHODHAN, A.R. / DATE OF HEARING : 19/06/2014 / DATE OF PRONOUNCEMENT: 27/06/2014 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THE REGISTRY HAS INFORMED THAT THIS APPEAL WAS BELA TEDLY FILED BY 19 DAYS. THE APPELLANT HAD MOVED AN APPLICATION FOR CONDONATION AND AFTER CONSIDERING THE REASONS ASSIGNED THEREIN WE H EREBY CONDONE THE DELAY AND ADMIT THIS APPEAL FOR ADJUDICATION AS FOL LOWS. THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FRO M THE ORDER OF LEARNED CIT(A)-IV, BARODA, DATED 14.03.2008. THROUG H SEVERAL GROUNDS, THE ASSESSEE HAS CHALLENGED THE LEVY OF PENALTY U/S .271(1)(C) OF RS.77,000/-. FACTS IN BRIEF AS EMERGED FROM THE COR RESPONDING ASSESSMENT ORDER PASSED U/S.143(3), DATED 26.03.2001 AND THE O RDER PASSED U/S.271(1)(C) DATED 27.02.2008 WERE THAT THE AO HAD MADE A PROTECTIVE ITA NO.935/AHD/2011 SHRI RAVINDRA M. JAJODIA. VS. ACIT, BARODA. A.Y. 1998-99. - 2 - ADDITION ON ACCOUNT OF INTEREST OF RS.1,21,150/- AN D ALSO TAXED LONG TERM CAPITAL GAIN OF RS.3,82,043/- ON SUBSTANTIVE B ASIS. THE MATTER WAS CARRIED BEFORE LEARNED CIT(A) WHO HAS DISMISSED THE APPEAL OF THE ASSESSEE AND THEREAFTER THE MATTER WAS CARRIED BEFO RE RESPECTED ITAT AHMEDABAD WHEREIN THE ADDITION IN RESPECT OF LONG T ERM CAPITAL GAIN WAS UPHELD, HOWEVER, DELETED THE PROTECTIVE ADDITIO N ON ACCOUNT OF INTEREST INCOME. 2.1 FACTS OF THE CASE HAVE REVEALED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS FOUND THAT IN THE LI ST OF THE DIVIDEND SHARES SHOWN WAS LESS THAN THE SHARES APPEARING IN THE LAST YEARS. THE EXPLANATION OF THE ASSESSEE WAS THAT CERTAIN SHARES WERE GIVEN AS LOAN TO HIS RELATIVES TO MEET THEIR FINANCIAL REQUIREMENT. IT WAS ALSO EXPLAINED THAT THE PARTIES TO WHOM THE SHARES WERE GIVEN AS L OAN HAVE PROMISED TO RETURN THE SHARES TOGETHER WITH DIVIDEND. THOSE SHA RES WERE NOT SOLD; HENCE, THERE WAS NO QUESTION OF CAPITAL GAIN. THE A O WAS OF THE VIEW THAT THOSE SHARES WERE SOLD UNOFFICIALLY BY RECEIVI NG CASH. THE AO HAS HELD THAT THE SHARES WERE SECRETLY SOLD; HENCE, HE HAS COMPUTED THE CAPITAL GAIN AND TAXED ACCORDINGLY. 3. FURTHER, OUR ATTENTION HAS ALSO BEEN DRAWN ON AN ORDER OF ITAT A BENCH AHMEDABAD PRONOUNCED IN ASSESSEES OWN CASE B EARING ITA NO. 156/AHD/2002 A.Y.1998-99 ORDER DATED 9 TH APRIL, 2007 WHEREIN A DECISION OF RAJ KUMAR JAJODIA (ITA NO.157/AHD/2002) A.Y. 1998-99 ORDER DATED 28 TH JULY, 2006 WAS REFERRED AND THE PROTECTIVE ADDITIO N WAS DELETED HOWEVER THE SUBSTANTIVE ADDITION WAS CONFIR MED. SO, THE ARGUMENT BEFORE US BY LEARNED AR, URVASHI SHODHAN I S THAT MERELY ON ITA NO.935/AHD/2011 SHRI RAVINDRA M. JAJODIA. VS. ACIT, BARODA. A.Y. 1998-99. - 3 - PRESUMPTION THE IMPUGNED ADDITION WAS MADE WHICH CO ULD NOT BE A VALID REASON FOR IMPOSITION OF PENALTY U/S.271(1)(C) OF I T ACT. FROM THE SIDE OF THE REVENUE, LEARNED DR, MISS SURABHI SHARMA SUPPOR TED THE ORDERS OF THE REVENUE AUTHORITIES AND ARGUED THAT THE ASSESSE E HAS CONCEALED THE FACTS OF THE CASE RESULTING INTO THE CONCEALMENT OF CAPITAL GAIN; HENCE THE ASSESSEE WAS RIGHTLY PENALIZED. 4. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUM STANCES OF THE CASE AS ALSO THE SMALLNESS OF THE AMOUNT INVOLVED, WE HE REBY HOLD THAT IN A SITUATION WHEN NO DIRECT EVIDENCE WAS AVAILABLE ON RECORD THAT THE ASSESSEE HAS IN FACT SOLD THE SHARES AND THAT THE A SSESSEE HAS EARNED CAPITAL GAIN, IT APPEARS TO US THAT THE AO HAS COMP UTED THE CAPITAL GAIN ON SUSPICION THAT THOSE SHARES MIGHT HAVE BEEN SOLD TO THE RELATIVES. ALTHOUGH, THE ADDITION WAS CONFIRMED BY THE RESPECT ED CO-ORDINATE BENCH BUT THE DOUBT REMAINED UNRESOLVED. GIVING THE BENEFIT OF THE DOUBT AND ALSO CONSIDERING THE EXPLANATION OF THE A SSESSEE WE HEREBY HOLD THAT THE PENALTY OF ONLY RS.77,000/- DESERVES TO BE DELETED. WE DIRECT ACCORDINGLY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. SD/- SD/- (ANIL CHATURVEDI) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED 27/06/2014 PRABHAT KR. KESARWANI, SR. P.S. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-III, AHMEDABAD ITA NO.935/AHD/2011 SHRI RAVINDRA M. JAJODIA. VS. ACIT, BARODA. A.Y. 1998-99. - 4 - 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD