ACIT, Central Circle - 4(3), Kolkata , Kolkata V. Shri Girdhari Lal Goenka , Kolkata

MA 82/KOL/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4325 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 26-10-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 25-08-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Tax effect
• Section: 153A; 68

Judgement Text

M.A. NOS. 81, 82 & 83/KOL/2020 IN IT(SS)A NOS. 85, 86 & 87/KOL/2018) ASSESSMENT YEARS: 2011 -2012, 2012-2013 & 2013-2014 SRI GIRDHARILAL GOENKA 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT AND SHRI A.T. VARKEY, JUDICIAL MEMBER M.A. NOS. 81, 82 & 83/KOL/2020 (ARISING OUT OF I.T.(S.S.)A. NOS. 85, 86 & 87/KOL/ 2018) ASSESSMENT YEARS: 2011-2012, 2012-2013 & 2013-2014 ASSISTANT COMMISSIONER OF INCOME TAX,.............. ............................APPLICANT CENTRAL CIRCLE-4(3), KOLKATA, AAYAKAR BHAWAN POORVA, 5 TH FLOOR, ROOM NO. 510, 110, SHANTI PALLY, KOLKATA-700107 -VS.- SRI GIRDHARILAL GOENKA,................... ........................RESPONDENT FLAT NO.2B/1, 2 ND FLOOR, SATYAM TOWERS, 3, ALIPORE ROAD, KOLKATA-700027 [PAN:ADZPG1962B] APPEARANCES BY: SMT. RANU BISWAS, ADDL. CIT , FOR THE APPLICANT SHRI MIRAK D. SHAH, A.R., FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : OCTOBER 16, 2020 DATE OF PRONOUNCING THE ORDER : OCTOBER 26, 2020 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT:- BY THESE THREE MISCELLANEOUS APPLICATIONS, THE REVE NUE IS SEEKING RECALL OF THE TRIBUNALS ORDER DATED JANUARY 03, 20 20 DISMISSING THE APPEALS OF THE REVENUE PASSED IN IT(SS)A NOS. 85, 8 6 & 87/KOL/2018 FOR A.YS. 2011-12, 2012-13 & 2013-14 BY TREATING THE SA ME AS NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT INVOLVED IN VIEW OF THE CBDT CIRCULAR NO. 17 OF 2019 DATED 08.08.2019 ON THE GRO UND THAT THE SAID CASES INVOLVING THE ISSUE OF BOGUS LONG-TERM CAPITA L GAIN/ SHORT-TERM M.A. NOS. 81, 82 & 83/KOL/2020 IN IT(SS)A NOS. 85, 86 & 87/KOL/2018) ASSESSMENT YEARS: 2011 -2012, 2012-2013 & 2013-2014 SRI GIRDHARILAL GOENKA 2 CAPITAL LOSS THROUGH PENNY STOCK WERE COVERED BY TH E EXCEPTION TO THE LOW TAX EFFECT CASES AS SPECIFIED BY CBDT IN THE CIRCUL AR NO. 23 OF 2019 ISSUED ON 06.09.2019. 2. THE LD. D.R. SUBMITTED THAT THE CIRCULAR NO. 23 OF 2019 DATED 06.09.2019 WAS ISSUED BY THE CBDT SPECIFYING THAT T HE MONETARY LIMITS FOR FILING REVENUES APPEALS AS SPECIFIED IN THE CB DT CIRCULAR NO. 17 OF 2019 DATED 08.08.2019 WERE NOT APPLICABLE IN THE CA SES WHERE THE ISSUE RELATING TO THE ASSESSEES CLAIM FOR THE ALLEGED BO GUS LONG-TERM CAPITAL GAIN/SHORT-TERM CAPITAL LOSS THROUGH THE PENNY STOC K WAS INVOLVED. SHE SUBMITTED THAT SINCE THE COMMON ISSUE INVOLVED IN T HE APPEALS OF THE REVENUE BEING IT(SS)A NOS. 85, 86 & 87/KOL/2018 WAS RELATING TO THE BOGUS LONG-TERM CAPITAL GAIN CLAIMED BY THE ASSESSE E THROUGH PENNY STOCK, THE SAME WERE NOT COVERED BY THE CBDT CIRCUL AR NO. 17 OF 2019 DATED 08.08.2019 SPECIFYING THE MONETARY LIMITS FOR FILING OF THE REVENUES APPEALS, INTER ALIA , BEFORE THE TRIBUNAL AND THERE WAS A MISTAKE IN THE ORDER OF THE TRIBUNAL DATED JANUARY 03, 2020 (SUPRA) IN DISMISSING THE SAID APPEALS ON ACCOUNT OF LOW TAX EFFECT IN VI EW OF THE CBDT CIRCULAR NO. 17 OF 2019 DATED 08.08.2020. 3. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, INVITED OUR ATTENTION TO PARAGRAPH NO. 11.3 & 11.4 OF THE APPEL LATE ORDER OF LD. CIT(APPEALS)-21, KOLKATA DATED 28.06.2018, WHICH WA S IMPUGNED IN THE APPEALS OF THE REVENUE IN IT(SS)A NOS. 85, 86 & 87/ KOL/2018, AND SUBMITTED THAT THE ADDITION OF RS.4,30,84,122/- AS MADE BY THE ASSESSING OFFICER IN ASSESSEES CASE FOR A.Y. 2010-11 ON ACCO UNT OF COMMISSION INCOME WAS CONFIRMED BY THE LD. CIT(APPEALS) AND SI NCE THE SAID ADDITION MADE ON INTANGIBLE BASIS WAS SUFFICIENT ENOUGH TO B E TELESCOPED AGAINST THE ADDITIONS MADE IN THE YEARS UNDER CONSIDERATION ON ACCOUNT OF THE ALLEGED BOGUS LONG-TERM CAPITAL GAIN THROUGH PENNY STOCK AMOUNTING TO RS.52,20,000/-, RS.26,95,150/- AND RS.44,00,100/- I N A.YS. 2011-12, M.A. NOS. 81, 82 & 83/KOL/2020 IN IT(SS)A NOS. 85, 86 & 87/KOL/2018) ASSESSMENT YEARS: 2011 -2012, 2012-2013 & 2013-2014 SRI GIRDHARILAL GOENKA 3 2012-13 & 2013-14 RESPECTIVELY, HE HAD DELETED THE SAID ADDITIONS GRANTING THE BENEFIT OF TELESCOPING TO THE ASSESSEE . HE CONTENDED THAT THE ISSUE RELATING TO THE ASSESSEES CLAIM OF LONG-TERM CAPITAL GAIN THROUGH PENNY STOCK THUS WAS NOT DECIDED BY THE LD. CIT(APP EALS) ON MERIT AND SINCE THE ORDER OF THE LD. CIT(APPEALS) GRANTING TH E BENEFIT OF TELESCOPING TO THE ASSESSEE WAS CHALLENGED BY THE REVENUE IN TH EIR APPEALS BEING IT(SS)A NOS. 85, 86 & 87/KOL/2018, THE SAID APPEALS WERE NOT COVERED IN THE EXCEPTION TO MONETARY LIMITS AS SPECIFIED IN CI RCULAR NO. 23 OF 2019 DATED 06.09.2019 AND THERE WAS NO MISTAKE IN THE OR DER OF THE TRIBUNAL DATED JANUARY 03, 2020 IN DISMISSING THE SAME ON AC COUNT OF LOW TAX EFFECT BY RELYING ON THE CBDT CIRCULAR NO. 23 OF 20 19 DATED 06.09.2019. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT THE THREE APPEALS BEING IT(SS)A NOS. 85, 86 & 87/KOL/2018 WER E FILED BY THE REVENUE AGAINST THE COMMON ORDER DATED 28 TH JUNE, 2018 PASSED BY THE LD. CIT(APPEALS)-21, KOLKATA, INTER ALIA , FOR A.YS. 2011-12, 2012-13 AND 2013-14. IN THE SAID APPEALS FOR A.Y. 2011-12, 2012 -13 AND 2013-14, THE COMMON ISSUE RELATING TO THE ASSESSEES CLAIM FOR T HE ALLEGED LONG-TERM CAPITAL GAIN THROUGH PENNY STOCK WAS INVOLVED AND A S POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE, THE SAME WAS DECIDED BY THE LD. CIT(APPEALS) VIDE PARAGRAPH NO. 11.3 & 11.4 AS UNDE R:- 11.3. APPLYING THE RATIO DECINDI LAID DOWN BY THE SUPREME COURT IN THE ABOVE JUDGMENT, I AM OF THE CONSIDERED VIEW THAT THE UNEXPLAINED COMMISSION INC OME OF RS.4,30,84,122/- AS ASSESSED TO TAX IN AY 2010-1 1 ON INTANGIBLE BASIS IS SUFFICIENT ENOUGH TO BE TELESCO PED AGAINST THE UNEXPLAINED DEPOSITS IN THE FORM OF BOG US LTCG OF RS.52,20,000/-, RS.26,95,150/- & RS.44,00,1 00/- ASSESSED U/S 68 OF THE ACT BY THE LD. AO IN THE AYS 2011- 12, 2012-13 & 2013-14. IN THE CIRCUMSTANCES EVEN IF THE LD. AO'S CONCLUSION AND FINDING THAT THE LTCG OF RS.52,20,000/-, RS.26,95,150/- & RS.44,00,100/- DER IVED BY THE APPELLANT IN THE SCRIPS OF M/S UNISYS SOFTWA RE & M/S TUNI TEXTILES IN AYS 2011-12, 2012-13 & 2013-14 IS BOGUS AND IN THE NATURE OF UNEXPLAINED CASH CREDIT U/S 68 M.A. NOS. 81, 82 & 83/KOL/2020 IN IT(SS)A NOS. 85, 86 & 87/KOL/2018) ASSESSMENT YEARS: 2011 -2012, 2012-2013 & 2013-2014 SRI GIRDHARILAL GOENKA 4 IS ACCEPTED AT ITS FACE VALUE, HOWEVER FOR THE REAS ONS SET OUT IN THE FOREGOING AND GRANTING THE BENEFIT OF TELESCOPING, THE IMPUGNED ADDITIONS OF RS.52,20,000 /-, RS.26,95,150/- & RS.44,00,100/- MADE IN AYS 2011-12 , 2012-13 & 2013-14 IS HELD TO BE UNSUSTAINABLE. THE LD. AO ACCORDINGLY DIRECTED TO DELETE THE AFORESAID ADD ITIONS IN THE RESPECTIVE ASSESSMENT YEARS. 4. SINCE THE ALTERNATE PLEA OF THE APPELLANT HAS BE EN ACCEPTED AND THE ADDITIONS MADE ON ACCOUNT OF BOGUS LTCG HAS BEEN DELETED FOR THE REASONS DISCUSSED ABO VE, THE PRIMARY CONTENTIONS RAISED BY THE APPELLANT REGARDING THE VALIDITY OF PROCEEDINGS U/S 153A AND THE MERITS OF THE ADDITION MADE U/S 68 IS NOW ONLY OF ACADEMIC INTEREST AND DOES NOT REQUIRE ANY ADJUDICA TION. 5. A PERUSAL OF THE RELEVANT PORTION OF THE LD. CIT (APPEALS)S APPELLATE ORDER REPRODUCED ABOVE CLEARLY SHOWS THAT THE ISSUE RELATING TO THE ASSESSEES CLAIM FOR THE ALLEGED BOGUS LONG-TERM CA PITAL GAIN THROUGH PENNY STOCK WAS NOT DECIDED BY THE LD. CIT(APPEALS) , INDEPENDENTLY ON MERIT AND SINCE THE ADDITION MADE BY THE ASSESSING OFFICER AMOUNTING TO RS.4,30,84,122/- ON ACCOUNT OF UNEXPLAINED COMMISSI ON INCOME ON INTANGIBLE BASIS IN A.Y. 2010-11 WAS CONFIRMED BY H IM AND THE SAME WAS MUCH MORE THAN THE ADDITIONS OF RS.52,20,000/-, RS. 26,95,150/- AND RS.44,00,100/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF ALLEGED BOGUS LONG-TERM CAPITAL GAIN FOR A.YS. 2011-12, 2012-13 A ND 2013-14 RESPECTIVELY, HE GRANTED THE BENEFIT OF TELESCOPING TO THE ASSESSEE AND DELETED THE SAID ADDITIONS MADE BY THE ASSESSING OF FICER ON ACCOUNT OF THE ALLEGED BOGUS LONG-TERM CAPITAL GAIN IN THE YEA RS UNDER CONSIDERATION, I.E. A.Y. 2011-12, 2012-13 & 2013-14. THE ISSUE REL ATING TO THE ASSESSEES CLAIM FOR LONG-TERM CAPITAL GAIN FROM PENNY STOCK A S INVOLVED IN A.YS. 2011-12, 2012-13 & 2013-14 THUS WAS NOT DECIDED SEP ARATELY BY THE LD. CIT(APPEALS) ON MERIT AS THE SAME HAD BECOME ONLY O F ACADEMIC INTEREST AS CLEARLY MENTIONED IN PARAGRAPH NO. 11.4 OF HIS APPELLATE ORDER KEEPING IN VIEW THAT THE ADDITIONS MADE BY THE ASSESSING OF FICER ON THE SAME M.A. NOS. 81, 82 & 83/KOL/2020 IN IT(SS)A NOS. 85, 86 & 87/KOL/2018) ASSESSMENT YEARS: 2011 -2012, 2012-2013 & 2013-2014 SRI GIRDHARILAL GOENKA 5 ISSUE WERE DELETED BY HIM BY GRANTING THE BENEFIT O F TELESCOPING BY ACCEPTING THE ALTERNATIVE PLEA OF THE ASSESSEE. THE RE WAS THUS NO OCCASION FOR THE LD. CIT(APPEALS) TO DECIDE THE ISSUE RELATI NG TO THE ASSESSEES CLAIM OF LONG-TERM CAPITAL GAIN FROM PENNY STOCK AS INVOLVED ON MERIT IN THE YEARS UNDER CONSIDERATION AND AS CLEARLY MENTIO NED BY HIM IN PARAGRAPH NO. 11.3, EVEN IF THE CONCLUSION AND FIND ING OF THE ASSESSING OFFICER THAT THE CLAIM OF THE ASSESSEE FOR LONG-TER M CAPITAL GAIN FROM PENNY STOCK WAS BOGUS HAD TO BE ACCEPTED, THE ADDIT IONS MADE BY THE ASSESSING OFFICER UNDER SECTION 68 ON ACCOUNT OF TH E AMOUNTS OF SUCH LONG-TERM CAPITAL GAIN DURING THE YEARS UNDER CONSI DERATION WERE UNSUSTAINABLE AFTER GRANTING THE BENEFIT OF TELESCO PING TO THE ASSEESSEE. KEEPING IN VIEW ALL THESE FACTS AND CIRCUMSTANCES O F THE CASE, WE ARE OF THE VIEW THAT THESE APPEALS OF THE REVENUE ARE NOT COVERED BY THE EXCEPTION TO MONETARY LIMITS AS SPECIFIED IN CIRCUL AR NO. 23 OF 2019 DATED 06.09.2019 AND SINCE THE SAME WERE COVERED BY CIRCU LAR NO. 17 OF 2019 DATED 08.08.2019 ISSUED BY THE CBDT FIXING THE REVI SED MONETARY LIMITS FOR FILING THE APPEALS OF THE REVENUE, THERE WAS NO MISTAKE IN THE ORDER OF THE TRIBUNAL DATED JANUARY 03, 2020 (SUPRA) DISMISS ING THE SAID APPEALS OF THE REVENUE ON ACCOUNT OF LOW TAX EFFECT KEEPING IN VIEW THE CBDT CIRCULAR NO. 17 OF 2019 DATED 08.08.2019. WE, THERE FORE, FIND NO MERIT IN THESE MISCELLANEOUS APPLICATIONS FILED BY THE REVEN UE AND DISMISS THE SAME. 6. IN THE RESULT, ALL THE MISCELLANEOUS APPLICATION S FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 26, 2 020. SD/- SD/- (A.T. VARKEY) (P.M. JAGTAP) JUDICIAL MEMBER VICE-PRESIDENT KOLKATA, THE 26 TH DAY OF OCTOBER, 2020 M.A. NOS. 81, 82 & 83/KOL/2020 IN IT(SS)A NOS. 85, 86 & 87/KOL/2018) ASSESSMENT YEARS: 2011 -2012, 2012-2013 & 2013-2014 SRI GIRDHARILAL GOENKA 6 COPIES TO : (1) ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-4(3), KOLKATA, AAYAKAR BHAWAN POORVA, 5 TH FLOOR, ROOM NO. 510, 110, SHANTI PALLY, KOLKATA-700107 (2) SRI GIRDHARILAL GOENKA, FLAT NO.2B/1, 2 ND FLOOR, SATYAM TOWERS, 3, ALIPORE ROAD, KOLKATA-700027 (3) COMMISSIONER OF INCOME TAX (APPEALS)-21, KOLK ATA, (4) COMMISSIONER OF INCOME TAX , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.