Add.Commissioner of Income tax Range-4, Nagpur V. Dharampal Agrawal, Nagpur

MA 17/NAG/2009

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1537 (ITAT-NAGPUR)
• Duration Of Justice: 4 year(s) 7 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2005-2006
• Appeal Filed On: 04-06-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M MANI
• Keywords: Rectification of order
• Section: 143(3)

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL-E-B ENCH, NAGPUR !' ' # ' /THROUGH VIDEO CONFERENCE AT MUMBAI $ $ $ $ % %% % & && & . . , #' #' #' #' % %% % (')* (')* (')* (')* , ' '' ' . . BEFORE S/SH.H.L.KARWA,PRESIDENT AND RAJENDRA,ACCOUNTANT MEMBER MA NO.17/NAG/2009(ARISING OUT OF ITA. NO. 255/NAG/2 008)-ASSESSMENT YEAR 2005-2006 ACIT, CIRCLE 4, NAGPUR VS. DHARAMPAL AGRAWAL 290 SATNAMI LAYOUT, WARDHMAN NAGAR, NAGPUR. PAN: ABHPA2471M ( +, / APPELLANT ) ( -.+, / RESPONDENT ) REVENUE BY : RIDDHI MISHRA ASSESSEE BY : M.MANI /0 / DATE OF HEARING : 2 4- 01 -201 4 12 /0 /DATE OF PRONOUNCEMENT : 31- 01 -201 4 , 1961 254 )1( ' '' ' )/$/ )/$/ )/$/ )/$/ 3'4 3'4 3'4 3'4 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM VIDE HIS MISCELLANEOUS APPLICATION FILED ON 04.06.2 009, ASSESSING OFFICER (AO) HAS SUBMITTED THAT TRIBUNAL HAD PASSED AN ORDER IN THE CASE ON 05 .01.2009 (ITA NO. 255/NAG/2008),THAT CERTAIN WERE MISTAKES APPARENT ON RECORD IN THE IMPUGNED OR DER, THAT RECTIFICATION ORDER HAS TO BE PASSED U/S.254(2) OF THE ACT. FACTS OF THE CASE 2. ASSESSEE,AN INDIVIDUAL FILED ITS RETURN OF INCOME O N 30.10.2005 FOR RS. 68.19 LACS. AO FINALISED THE ASSESSMENT ON 31.12.2007 U/S. 143(3) OF THE ACT DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 72.55 LACS.DURING THE ASSESSMENT PROCEEDINGS , AO FOUND THAT ASSESSEE HAD SOLD 625 SHARES OF GAUTAM RESOURCES ON 07.03.2005. HE WAS OF THE OP INION THAT THE TRANSACTION ENTERED INTO BY THE ASSESSEE WAS NOT GENUINE AND AS A RESULT HE REJ ECTED THE CLAIM OF THE ASSESSEE FOR CAPITAL GAIN OF RS.4.36 LACS.ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA),WHO CONFIRMED THE ORDER OF THE AO. DECIDING THE APPEAL IN FAVOUR OF THE ASSESSEE,TRIBU NAL DECIDED THE ISSUE AT PARA 35 AS UNDER:- RESPECTFULLY FOLLOWING THE ORDERS OF MUMBAI BENCH OF ITAT REPORTED IN 6 SOT 247 IN THE CASE OF MUKESH R. MAROLIA VS. ACIT,MUMBAI WE HOLD T HAT THE RECEIPTS FROM SALE OF SHARES OUTSIDE THE FLOOR OF STOCK EXCHANGE IS NOT ILLEGAL, THEREFORE, THE CLAIM OF THE ASSESSEE IS IN ORDER. THE GROUND OF APPEAL OF ASSESSEE IS ALLOWED. 2 M.A.NO. 17/NAG/2009 DHARAMPAL AGRAWAL 2.1. THE AO IN HIS APPLICATION HAS SUBMITTED THAT THE SH ARES WERE SOLD OUTSIDE THE FLOOR OF STOCK EXCHANGE,THAT THE ASSESSEE WAS NOT ELIGIBLE FOR EXE MPTION U/S.10(38) OF THE ACT, THAT THE ABOVE FACT WAS POINTED OUT BY HIM TO THE ASSESSEE,THAT TH E ASSESSEE VIDE HIS LETTER DATED 24.12.2007, SUBMITTED THAT CAPITAL GAIN @ 10% HAD TO BE PAID BY HIM U/S. 112 OF THE ACT,THAT THE CONDITIONS LAID DOWN IN SEC.10(38) OF THE ACT WITH REGARD TO P AYMENT OF SECURITIES TRANSACTION TAX(STT) WAS NOT FULFILLED,THAT HE WAS NOT ELIGIBLE FOR EXEM PTION,THAT GRANTING OF EXEMPTION WITHOUT VERIFYING THE FULFILLING THE MANDATORYPRE-CONDITION S WAS A MISTAKE APPARENT FROM RECORD,THAT SUITABLE DIRECTIONS HAD TO BE ISSUED IN THIS REGARD . BEFORE US,DEPARTMENTAL REPRESENTATIVE(DR) SUBMITTED THAT WHILE ALLOWING THE APPEAL OF THE ASSESSEE, TRIBUNAL HAD NOT CONSIDERED THE FACT THAT STT WAS NOT PAID, THAT WITHOUT PAYMENT OF STT ASSESSEE WAS NOT ELIGIBLE TO CLAIM EXEMPTION U/ S. 10(38) OF THE ACT.AUTHORISED REPRESENTATIVE (AR) SUBMITTED THAT STAND TAKEN BY T HE AO WAS AS PER LAW, THAT ASSESSEE WAS READY TO PAY TAX ON LTCG @ 10%. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT TRANSACTIONS CARRIED OUT BY THE ASSESSEE WERE OFF MARKET TRANSAC TIONS AND STT WAS NOT PAID BY HIM. THEREFORE, PARA 35 OF THE ORDER SHOULD BE READ AS UNDER:- RESPECTFULLY FOLLOWING THE ORDERS OF MUMBAI BENCH OF ITAT REPORTED IN 6 SOT 247 IN THE CASE OF MUKESH R. MAROLIA VS. ACIT, MUMBAI WE HOLD THAT THE RECEIP TS FROM SALE OF SHARES OUTSIDE THE FLOOR OF STOCK EXCHANGE IS NOT ILLEGAL.CLAIM MADE BY THE ASSESSEE U/S.10(38) OF THE ACT CAN BE ENTERTAINED ONLY IF TH E ASSESSEE PAYS SECURITY TRANSACTION TAX.IN THE CASE BEFORE US,THE ASSESSEE HAD ADMITTED THAT HE DID NOT PAY ANY TAX AS THE TRANSACTION WAS OFF MARKET.CLAIM MAD E BY THE ASSESSEE ABOUT LONG TERM GAIN HAS TO BE DECIDED BY THE AO IN ACCORDANCE WITH LAW. WITH THESE OBSERVATIONS, WE MODIFY OUR ORDER TO THA T EXTENT. AS A RESULT, MISCELLANEOUS APPLICATION FILED BY THE AO STANDS AL LOWED. 5/6 $7/ 0 8 39 3' (: (/ ; . ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2014. 3'4 12 ' ) 31 ( 0 , 2014 . SD/- SD/- (H.L.KARWA/ & && & . . ) ( (')* (')* (')* (')* / RAJENDRA) PRESIDENT/ #' ' ' ' ' 3= 3= 3= 3= /ACCOUNTANT MEMBER / MUMBAI, 3 /DATE: 31.01.2014 SK 3'4 3'4 3'4 3'4 -/ -/ -/ -/ >'2/ >'2/ >'2/ >'2/ / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / +, 2. RESPONDENT / -.+, 3. THE CONCERNED CIT(A)/ ? @ , 4. THE CONCERNED CIT / ? @ 5. DR ITAT,NAGPUR BENCH/ A -/ , . . ) . - . 6. GUARD FILE/ $ 5 . ./ -/ //TRUE COPY// 3'4 / BY ORDER, B / ( DY./ASST. REGISTRAR , /ITAT, MUMBAI.