M/S AGENCIES RAJASTHAN PVT. LTD., JAIPUR V. INCOME TAX OFFICER, WARD-6-2, JAIPUR

SA 26/JPR/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3803 (ITAT-JAIPUR)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 30-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Application of stay
• Section: 22

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA, AM & SHRI VIJAY PAL RAO, JM S.A. NO. 26/JP/2019 (ARISING OUT OF ITA NO. 567/JP/2019) FU/KZKJ.K O'KZ@ ASSESSMENT YEAR: 2015-16 M/S AGENCIES RAJASTHAN PVT. LTD., B-21, INDUSTRIAL ESTATE, 22 GODOWN, JAIPUR-302006. C UKE VS. I.T.O., WARD 6(2), JAIPUR. LFKK;H YS[KK LA -@THVKBZVKJ LA-@ PAN/GIR NO.: AABCA 5667 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI MAHENDRA GARGIEYA (ADV) JKTLO DH VKSJ LS @ REVENUE BY : SHRI VARINDER MEHTA (CIT-DR). LQUOKBZ DH RKJH[K@ DATE OF HEARING : 10/05/2019 MN~?KKS 'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 10/05/2019 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS STAY APPLICATION AROSE OUT OF THE APPEAL FILED BEFORE THE TRIBUNAL ON 22/04/2019 AGAINST THE ORDER OF THE LD. CIT(A)-2, JAIPUR DATED 28/03/2019 FOR THE A.Y. 2015-16. 2. THROUGH THIS STAY APPLICATION, THE ASSESSEE HAS REQUESTED FOR STAY OF DEMAND OF RS. 8.96 CRORES AND INTEREST THEREON U/S 220 OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). S.A. NO. 26/JP/2019 M/S AGENCIES RAJASTHAN PVT. LTD. VS ITO 2 3. IT WAS ARGUED BY THE LD AR OF THE ASSESSEE THAT THE RETURN FILED BY THE ASSESSEE AT AN INCOME OF RS. 81.42 LACS WAS ASSESSED BY THE A.O. AT RS. 25.15 CRORES. THE MAJOR ADDITION OF RS.24,04,26,504/- OUT OF TOTAL ADDITION OF RS. 24,34,15,448/- WAS MADE ON ACCOUNT OF LTCG WITHOUT ANY BASIS. THE ADDITION WAS MADE MERELY ON SURMISES, CONJECTURES AND SUCH AN EXERCISE IS HIGHLY ARBITRARY AND CAPRICIOUS AND FULLY BASED ON MERE SUSPICION. THE LD. AO ALLEGED THAT THAT THE TRANSACTION WAS PRE-PLANNED. THE MATTER IS FULLY COVERED BY THE BINDING DECISION OF HON`BLE APEX COURT IN THE CASE OF CIT VS. WALFORT SHARE & STOCK BROKERS (P) LTD. (2010) 326 ITR 0001 (SC). 4. RELYING UPON THE CBDT CIRCULAR NO. 96 DATED 21/08/1969, IT WAS CONTENDED THAT WHERE THE INCOME ASSESSED IS MORE THAN TWICE, THE DEPARTMENT MUST GRANT STAY OVER THE RECOVERY OF THE DEMAND TILL THE DISPOSAL OF THE FIRST APPEAL. SINCE THE RATIO SO LAID DOWN SQUARELY APPLIED ON THE FACTS OF THE PRESENT CASE, HENCE IT IS A CASE WHICH DESERVES COMPLETE STAY IN VIEW OF THE FACTS AND THE LEGAL POSITION ENUMERATED BY THE HONBLE RAJASTHAN HIGH COURT IN THE DECISION OF H.H. MAHARANA BHAGWAT SINGH 223 ITR 192. 5. AS PER THE LD AR, CBDT INSTRUCTION NO. 404/72/93-ITCC DATED 29.02.2016, CLAUSE 4(B)(A), AND 4(B)(B) CONFERS A SUFFICIENT S.A. NO. 26/JP/2019 M/S AGENCIES RAJASTHAN PVT. LTD. VS ITO 3 DISCRETIONARY POWER TO ASK FOR A LOWER AMOUNT THAN 20% OR EVEN NOT TO RECOVER. 6. FURTHER RELIANCE WAS PLACED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF SOUL V. DEPUTY COMMISSIONER OF INCOME TAX [2010, 323 ITR 305, HON`BLE RAJASTHAN HIGH COURT IN THE CASE OF MAHESHWARI AGRO INDUSTRIES V/S UNION OF INDIA (2012) 346 ITR 375 (RAJ), HONBLE KARNATAKA HIGH COURT THE CASE OF FLIPKART INDIA PRIVATE LIMITED VS. ACIT & ORS (2017) 396 ITR 0551 (KARN) AND THE HONBLE MADRAS HIGH COURT IN THE CASE OF GMV PROJECTS & SYSTEMS VS. ACIT (2017) 249 TAXMAN 0468 (MAD). 7. WITH REGARD TO BALANCE OF CONVENIENCE, THE LD AR OF THE ASSESSEE SUBMITTED THAT PRESENTLY ASSESSEE IS NOT IN A POSITION TO MAKE PAYMENT OF SUCH A HUGE BALANCE AMOUNT IN AS MUCH AS THERE ARE NO LIQUID FUNDS WITH THE ASSESSEE EXCEPT FOR MEETING WITH THE DAILY ROUTINE EXPENSES. THERE IS NO REGULAR SOURCE OF INCOME PRESENTLY EXCEPT SOME INTEREST INCOME. 8. ON THE OTHER HAND, THE LD CIT-DR HAS OPPOSED THE STAY APPLICATION AND CONTENDED THAT THE ASSESSEE HAS ARTIFICIALLY CREATED A LOSS BY SALE OF MUTUAL FUNDS SO AS TO SET OFF THE SAME AGAINST THE PROFIT S.A. NO. 26/JP/2019 M/S AGENCIES RAJASTHAN PVT. LTD. VS ITO 4 EARNED ON SALE OF FIXED ASSETS. HE HAS FURTHER CONTENDED THAT THE ASSESSEE SHOULD BE ASKED TO PAY AT LEAST 20% OF THE TOTAL DEMAND SO CREATED FOR THE A.Y. UNDER CONSIDERATION. HE HAS FURTHER SUBMITTED THAT THE ASSESSEE BELONGS TO A REPUTED BANGUR GROUP HAVING VERY GOOD LIQUIDITY POSITION, THEREFORE, THE ASSESSEE TO PAY EVEN MORE AMOUNT OF TAX SO CREATED AFTER GIVING EFFECT TO THE ORDER OF THE LD. CIT(A). 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE STAY APPLICATION AS WELL AS ORDERS PASSED BY THE LOWER AUTHORITIES. FROM THE RECORD WE FOUND THAT THE MAJOR ADDITION OF RS.24,04,26,504/- WAS MADE BY DISALLOWING THE SHORT TERM CAPITAL LOSS. THE TRANSACTION WAS PRE-PLANNED BUT THE GENUINENESS COULD NOT BE DISPROVED. THE VITAL FACTS OF PURCHASE OF MUTUAL FUNDS, PAYMENTS, SALE (REDEMPTION) AND RECEIPTS OF THE PROCEEDS AND THE RECEIPTS OF THE DIVIDEND, ARE NOT AT ALL DISPUTED BUT RATHER ADMITTED. UNDER THESE FACTS AND CIRCUMSTANCES, THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. WALFORT SHARE & STOCK BROKERS (P) LTD. (2010) 326 ITR 0001 (SC) SUPPORTS THE CASE OF THE ASSESSEE. THE INCOME WAS ASSESSED BY THE A.O. 3089% TIMES MORE I.E. AT RS.25,15,58,238/- THAN THE RETURNED INCOME OF RS.81,42,790/. HENCE, PRESENT CASE IS DIRECTLY COVERED BY THE CBDT INSTRUCTIONS NO. 95 DATED 21.08.1969 AND THE ABOVE DECISIONS. S.A. NO. 26/JP/2019 M/S AGENCIES RAJASTHAN PVT. LTD. VS ITO 5 KEEPING IN VIEW THE TOTALITY OF FACTS AND CIRCUMSTANCES IN TERMS OF PRIMA FACIE CASE OF ASSESSEE VIS A VIS BALANCE OF CONVENIENCE, WE GRANT STAY TO THE ASSESSEE FOR A PERIOD OF SIX MONTHS OR TILL ORDER OF THE ITAT WHICHEVER IS EARLIER SUBJECT TO PAYMENT OF RS. 30.00 LACS. THE AMOUNT IS TO BE PAID IN A MONTHLY INSTALLMENT OF RS. 5.00 LACS. THE APPEAL IS FIXED FOR HEARING ON 28/5/2019. WE DIRECT ACCORDINGLY. 10. IN THE RESULT, THIS STAY APPLICATION IS DISPOSED OFF IN TERMS INDICATED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH MAY, 2019. SD/- SD/- FOT; IKY JKO JES'K LH 'KEKZ (VIJAY PAL RAO) (RAMESH C SHARMA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 10 TH MAY, 2019 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S AGENCIES RAJASTHAN PVT. LTD., JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE I.T.O., WARD 6(2), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (SA NO. 26/JP/2019) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR