ITO, CORPORATE WARD -2 (2), CHENNAI V. M/S. GOLECHA GLOBAL FINANCE LTD., WEST BENGAL

MA 45/CHNY/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4387 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-05-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 14-07-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PANKAJ KUMAR GOYAL
• Keywords: Tax effect; Tax effect; Penny stocks; Capital Gains

Judgement Text

आयकर अपील य अ धकरण,‘सी’ यायपीठ, चे नई IN THE INCOME TAX APPELLATE TRIBUNAL , ‘C’ BENCH, CHENNAI ी वी .द ु गा राव, या यक सद य एवं ी जी.मंज ु नाथ, लेखा सद य के सम$ BEFORE SHRI V.DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER Misc. Petition N o. 4 5 / C hn y/ 2 0 2 1 (In ITA No.27 7 8/ C h n y/ 2 0 1 9) ( नधा रणवष / As s e s s m en t Ye a r : 20 11 - 1 2) The Income Tax Officer, Corporate Ward-2 (2) Chennai-34. V s M/s. Golecha Global Finance Ltd. 522, Tobacco House, 5 th floor 1, Old Court House Corner, Dalhousie, Kolkatta-600001. PA N: A AB CG 9 4 8 8 Q (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओरसे/ Appellant by : Mr. AR V Sreenivasan, Addl.CIT यथ क ओरसे/Respondent by : Mr. Pankaj Kumar Goyal, FCA स ु नवाईक तार$ख/D a t e o f h e a r i n g : 29.04.2022 घोषणाक तार$ख /D a t e o f P r o n o u n c e m e n t : 11.05.2022 आदेश / O R D E R PER G.MANJUNATHA, AM: The Revenue has filed present Miscellaneous Application against order of the Tribunal in ITA No.2778/Chny/2019 dated 11.03.2021 for the assessment year 2011-12. 2. The revenue has narrated facts of its case and mistakes stated to be apparent on record from the order of the Tribunal dated 11.03.2021 and relevant contents of the Miscellaneous Petition filed by the Revenue are reproduced as under:- “The ITAT vide its order dated 11/03/2021 has dismissed the appeal on account of low tax effect in 2 Misc.Petition No. 45/Chny/2021 view of Board’s Circular No.17/2019 dated 08/08/2019. However, the Hon’ble ITAT, in the order, had made it clear that if the appeal fall in any of the exceptions referred to in the above circular, the Revenue is at liberty to move an application for recalling this order. Board’s Circular No.23/2019 dated 06/09/2019 states that by virtue of powers of the CBDT u/s. 268 of the Income tax Act, 1961, the monetary limit fixed for filing appeal before ITAT/HC/and SLPs/appeal before the Supreme Court shall not apply in case of assessee claiming bogus Long Term Capital Gains/Short Term Capital Gains through penny stocks and appeals/SLPs in such cases shall be decided on merits. The present case is covered by concepts of penny stocks transactions. In view of above facts, it is requested that the Hon’ble ITAT ‘C’ Bench may be pleased to pass any orders recalling the order dated 11-03-2021 on the submissions and prayer made hereinabove for decision on merits of the case. This prayer is supported by tax effect of Rs.49,820,625/-.” 3. The learned DR referring to petition filed by the Revenue to recall order of the Tribunal dated 11.03.2021 submitted that the issue involved in the present appeal filed by the Revenue was related to addition made by the Assessing Officer on 3 Misc.Petition No. 45/Chny/2021 account of income derived from sale of shares of penny stock companies in light of investigation carried out by Investigation Wing of Kolkatta and thus, even though tax effect involved in the present appeal is less than monetary limit prescribed by the CBDT vide circular No.17/2019, but, because of subsequent Board circular No.23/2019 dated 06.09.2019, issue should be contested on merits wherever it pertains to assessment of income on the basis of information received from external sources and income relates to long term capital gain /short term capital gain on penny stock companies. Hence, the order passed by the Tribunal dated 11.03.2021 should be recalled and issue involved in the appeal may be decided on merits. 4. The learned A.R for the assessee, on the other hand, submitted that circular No.23/2019 issued by CBDT does not apply to facts of the present case, because the Assessing Officer has not made addition under the head “long term capital gain / short term capital gain” and further, income derived by the assessee is not from transaction of penny stock companies, but sale of shares held in group companies which were purchased in earlier years and thus, there is no error in the 4 Misc.Petition No. 45/Chny/2021 order passed by the Tribunal dismissing appeal filed by the Revenue in light of circular No.17/2019 and hence, Misc.Application filed by the Revenue should be dismissed. 5. We have heard both the parties and perused Miscellaneous Application filed by the Revenue in light of order of the Tribunal. We find that the Tribunal had dismissed appeal filed by the Revenue in light of circular No.17/2019 dated 08.08.2019 issued by the CBDT prescribing monetary limit for filing appeal before various authorities on the ground that tax effect involved in present appeal filed by the Revenue is below the threshold limit. We further noted that the Revenue has failed Misc.Petition and argued that the issue involved in the present appeal comes under exception as provided in the circular No.17/2019 dated 08.08.2019. We, find that issue involved in the present appeal does not come under exception as provided in Circular No.23/2019 dated 06.09.2019, because addition made by the Assessing Officer towards sale consideration received from transfer of shares neither pertains to sale of penny stock nor the Assessing Officer has made any addition under the head “long term capital gain /short term capital gain”. 5 Misc.Petition No. 45/Chny/2021 We further noted that the assessee has sold all shares of group companies which was purchased in earlier years and derived Nil capital gain. Therefore, we are of the considered view that that there is no merit in Misc.Application filed by the Revenue and thus, same is dismissed. 6. In the result, Miscellaneous Application filed by the Revenue is dismissed. Order pronounced in the open court on 11 th May, 2022 Sd/- Sd/- ( वी. द ु गा राव) (जी.मंज ु नाथ) (V.Durga Rao) (G.Manjunatha) (या यक सद*य /Judicial Member लेखा सद*य / Accountant Member चे(नई/Chennai, -दनांक/Dated 11 th May, 2022 DS आदेश क त1ल2प अ3े2षत/Copy to: 1. Appellant 2. Respondent 3. आयकर आय ु 4त (अपील)/CIT(A) 4. आयकर आय ु 4त/CIT 5. 2वभागीय त न8ध/DR 6. गाड फाईल/GF.