VAISHALI V SHAH, MUMBAI v. ACIT 15(2), MUMBAI

ITA 3295/MUM/2014 | 2007-2008
Pronouncement Date: 28-10-2016 | Result: Dismissed

Appeal Details

RSA Number 329519914 RSA 2014
Assessee PAN AQPPS2455Q
Bench Mumbai
Appeal Number ITA 3295/MUM/2014
Duration Of Justice 2 year(s) 5 month(s) 20 day(s)
Appellant VAISHALI V SHAH, MUMBAI
Respondent ACIT 15(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-10-2016
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 28-10-2016
Date Of Final Hearing 26-04-2016
Next Hearing Date 26-04-2016
Assessment Year 2007-2008
Appeal Filed On 08-05-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH MUMBAI BEFORE SHRI JASON P. BOAZ ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN JUDICIAL MEMBER ITA NO. 3295/MUM/2014 (ASSESSMENT YEAR: 2007-08) MS. VAISHALI V. SHAH VS. A C I T 15 (2) 15/7 NAVJEEVAN SOCIETY LAMINGTON ROAD MUMBAI 400008 MATRU MAINDR ROOM NO. 113 TARDEO MUMBAI 400007 PAN AQPPS2455Q APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY: SHRI RAVINDER SINDHU DATE OF HEARING: 26.10.2016 DATE OF PRONOUNCEMENT: 28.10.2016 O R D E R PER JASON P. BOAZ A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)- 26 MUMBAI DATED 12.02.2014 FOR A.Y. 2007-08. 2. THE FACTS OF THE CASE BRIEFLY ARE AS UNDER: - 2.1 THE ORIGINAL ASSESSMENT IN THE CASE OF THIS ASS ESSEE FOR A.Y. 2007-08 WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME TA X ACT 1961 (IN SHORT 'THE ACT') VIDE ORDER DATED 20.11.2009 WHEREIN THE INCOME WAS DETERMINED AT ` 93 66 790/- IN VIEW OF THE ASSESSING OFFICER (AO) H OLDING SHORT TERM CAPITAL GAIN (STCG) OF ` 92 76 279/- FROM SALE OF SHARES DECLARED BY THE ASSESSEE TO BE INCOME FROM SPECULATION BUSINESS. ON APPEAL THE CIT(A)-26 VIDE ORDER DATED 05.05.2010 HELD THE TRANSACTION TO BE CAPITAL GAINS AND NOT A SPECULATIVE TRANSACTION. ON FURTHER APPEAL A COORDINATE BENCH OF THIS TRIBUNAL VIDE ORDER DATED 15.03.2013 SET ASIDE THIS ORDER OF THE CIT(A) AND RESTORED THE MATTER BACK TO THE FILE OF THE LEA RNED CIT(A) FOR PASSING FRESH ORDERS AFTER EXAMINATION IN THE LIGHT OF THEI R OBSERVATIONS WHICH ARE EXTRACTED HEREUNDER: - ITA NO. 3295/MUM/2014 MS. VAISHALI V. SHAHA 2 WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIV AL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING NATURE OF INCOM E FROM PURCHASE AND SALE OF SHARES BY THE ASSESSEE WHO BELONGED TO THE DAME GROUP. THE ASSESSEE HAD PURCHASED SHARES FROM THE SAME SUB-BRO KER WHO IN TURN HAD PURCHASED THE SHARES FROM THE MAIN BROKER. THE ENQUIRY FROM THE SUB-BROKER REVEALED THAT IT HAD NOT TAKEN DELIVERY ON BEHALF OF THE ASSESSEES. THE SUB-BROKER HAD ONLY STATED THAT THE SHARES REMAINED WITH THE MAIN BROKER AS THERE WERE NO INSTRUCTIONS FOR THE CLIENTS TO TAKE DELIVERY. IT WAS ALSO SUBMITTED BY SUB-BROKER THAT IT HAD NOT MAINTAINED ANY DEMAT ACCOUNT OF THE CLIENTS. AFTER CONSIDERING THE MATERIAL ON RECORD THE AO OBSERVED THAT THE INCOME FROM SHARE TRANSACTION HAD TO BE CONSIDERED EITHER AS SPECULAT ION OR NORMAL BUSINESS INCOME BUT SINCE THERE WAS NO EVIDENCE OF DELIVERY THE AO TREATED THE INCOME AS SPECULATION INCOME. IN APPEAL CIT(A) OBSERVED THAT SUB-BROKER HAD STATED THAT THE SHARES REMAINED WITH MAIN BROKER AND FROM THIS HE CONCLUDED THAT DELIVERY HAD BEEN T AKEN BY THE MAIN BROKER WHICH HAS TO BE CONSIDERED AS DELIVERY BY TH E ASSESSEE. CIT(A) ALSO OBSERVED THAT THERE WAS NO DISPUTE THAT DELIVE RY HAD BEEN TAKEN BY MAIN BROKER. HOWEVER WE NOTE THAT THERE IS NO E VIDENCE THAT THE DELIVERY HAD BEEN TAKEN BY MAIN BROKER. SINCE THE I SSUE OF DELIVERY WAS STILL IN DISPUTE WE AGREE WITH THE SUBMISSION O F LD. DR THAT FINDING OF CIT(A) THAT THERE WAS NO DISPUTE OF DELIVERY WAS NOT CORRECT. NO ENQUIRY HAS BEEN MADE FROM THE MAIN BROKER CONFIRMI NG THAT IT HAD TAKEN DELIVERY ON BEHALF OF THE ASSESSEE. MOREOVER EVEN IF DELIVERY HAD BEEN TAKEN CIT(A) WAS REQUIRED TO EXAMINE THE OTHER ASPECT AS TO WHETHER INCOME FROM SHARE TRANSACTION COULD BE CONS IDERED AS SPECULATIVE INCOME OR NORMAL BUSINESS INCOME. DETAI LS OF SHARE TRANSACTIONS PLACED IN PAPER BOOK REVEAL THAT SHARE S HAVE BEEN SOLD AFTER HOLDING FOR A SHORT PERIOD AND IN SOME CASES THERE ARE REPEATED PURCHASES AND SALE OF SHARES IN SAME SCRIPS WHICH A PPARENTLY ARE NOT ATTRIBUTES OF AN INVESTOR. CONSIDERING THE FACTS AN D CIRCUMSTANCES OF THE CASE THE MATTER REQUIRES FRESH EXAMINATION AT T HE LEVEL OF CIT(A). WE THEREFORE SET ASIDE THE ORDER OF CIT(A) AND RE STORE THE MATTER TO HIM FOR PASSING A FRESH ORDER AFTER NECESSARY EXAMI NATION IN THE LIGHT OF THE OBSERVATIONS MADE ABOVE AND AFTER ALLOWING O PPORTUNITY OF HEARING TO THE ASSESSEE. 2.2 IN THE SECOND ROUND OF PROCEEDINGS THE LEARNED CIT(A)-26 MUMBAI DISMISSED THE ASSESSEES APPEAL HOLDING AS UNDER: - 3.2.7 THEREFORE ALL THE SHARE TRANSACTIONS SHOWI NG CAPITAL GAINS IN THE RETURN ARE BOGUS. ACCORDINGLY THE ADDITION MAD E BY THE AO IS UPHELD AND GROUNDS OF APPEAL ARE HEREBY DISMISSED. 3.2.8 AS PER ITAT ORDER IN THE CASE OF APPELLANT AN D THE OPERATIVE PART REPRODUCED IN PARA 3.1.2 OF THIS ORDER THE APP ELLANT WAS TO LEAD EVIDENCE IN SUPPORT OF HIS CLAIM THAT DELIVERY OF T HE SHARES WAS NOT IN DISPUTE AND THAT THE DELIVERY WAS TAKEN AND GIVEN. SINCE NO VERIFIABLE EVIDENCE IN SUPPORT OF DELIVERY HAS BEEN PRODUCED A ND EVEN THE NAME AND ADDRESS OF THE MAIN BROKER HAS NOT BEEN GIVEN T O FACILITATE THE ITA NO. 3295/MUM/2014 MS. VAISHALI V. SHAHA 3 ENQUIRY AND ALSO IN VIEW OF THE AFORESAID ORDERS OF ITAT IN THE CASE OF MUKESH CHOKSI GROUP IT IS HEREBY HELD THAT NO GENU INE TRANSACTION IN SHARES WAS EVER DONE BY THE APPELLANT AND THEREFORE THE QUESTION OF ANY DELIVERY AND EVIDENCE IN SUPPORT THEREOF DOES N OT ARISE. THEREFORE THOUGH THE AO IN THIS CASE HAS ASSESSED THE INCOME SHOWN IN BOGUS SHARES TRANSACTION AS SPECULATION INCOME THE SAME IS CORRECTLY ASSESSABLE AS INCOME FROM OTHER SOURCES SINCE THE SHARE TRANSACTIONS ARE BOGUS. THE AO IS DIRECTED TO ASSESS THE SAME UN DER THE HEAD INCOME FROM OTHER SOURCES. 3.1 AGGRIEVED BY THE ORDER OF THE CIT(A)-26 MUMBAI DATED 12.02.2014 FOR A.Y. 2007-08 THE ASSESSEE HAS PREFERRED THIS A PPEAL RAISING THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED CIT(A) ERRED IN DISMISSING THE APPEAL. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) ERRED IN DISMISSING THE APPEAL AND THAT TOO WITHOUT GIVING FULL AND PROPER OPPORTUNITY OF BEING HEARD IN THE M ATTER. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) ERRED IN DISMISSING THE APPEAL AND THAT TOO WITHOUT APPRECIATING FULLY AND PROPERLY THE FACTS OF THE CA SE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF THE A.O. IN DISALLOWING AN AMOUNT OF RS.92 76 279/- BEING SALE OF SHARES AS A BUSINESS INCOME. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) ERRED IN TAKING THE ADDITIONAL MATERIAL ON R ECORD WHICH WAS NOT BEFORE A.O. 6. THE LEARNED CIT(A) FAILED TO APPRECIATE THE DETA ILS CALLED FOR THE ASSESSEE HAS ESTABLISHED ALL THE REQUIREMENT OF THE ACT BEYOND ANY DOUBT. 7. THE LEARNED CIT(A) FAILED TO TAKE AND HAS CONSID ERED ADDITIONAL EVIDENCE NOT AVAILABLE BEFORE THE A.O. DURING THE C OURSE OF HEARING AT THE TIME OF ASSESSMENT. 3.2 THE CASE WAS FIXED FOR HEARING ON VARIOUS DATES BUT ON ALL THESE DAYS EITHER NONE WAS PRESENT FOR THE ASSESSEE OR A DJOURNMENT WAS SOUGHT FOR BY THE LEARNED COUNSEL FOR THE ASSESSEE ON VARI OUS GROUNDS. EVEN NOTICE ISSUED BY RPAD HAS BEEN RETURNED BACK UNSERV ED. ON ONE OCCASION ADJOURNMENT WAS SOUGHT BY THE LEARNED D.R. WHEN THE CASE WAS CALLED FOR HEARING ON 26.10.2016 NONE WAS PRESENT ON BEHALF O F THE ASSESSEE BUT THE LEARNED D.R. WAS PRESENT AND READY TO ARGUE THE CASE FOR REVENUE. IN ITA NO. 3295/MUM/2014 MS. VAISHALI V. SHAHA 4 THE CIRCUMSTANCES AS MENTIONED ABOVE WE ARE OF THE VIEW THAT THE ASSESSEE DOES NOT APPEAR TO BE INTERESTED IN PURSUI NG THIS APPEAL SERIOUSLY. IN THAT VIEW OF THE MATTER WE PROCEED T O DISPOSE OFF THIS APPEAL WITH THE ASSISTANCE OF THE LEARNED D.R. FOR REVENUE AND THE MATERIAL ON RECORD. 3.3 ALL THE GROUNDS RAISED AT S.NOS 1 TO 7 (SUPRA) MAINLY PERTAIN TO THE SINGLE ISSUE; RAISING CONTENTIONS THAT THE AUTHORIT IES BELOW ERRED IN TREATING THE INCOME OF ` 92 76 279/- AS BUSINESS INCOME RATHER THAN AS DECLARED BY THE ASSESSEE AS STCG ON SALE OF SHARES. IN THESE GROUNDS THE ASSESSEE INTER ALIA HAS ALSO CONTENDED THAT THE L EARNED CIT(A) DISMISSED THE ASSESSEES APPEAL WITHOUT ALLOWING THE ASSESSEE FULL AND PROPER OPPORTUNITY OF BEING HEARD; WITHOUT APPRECIATING TH E FACTS OF THE CASE PROPERLY; WITHOUT APPRECIATING THAT THE ASSESSEE HA S ESTABLISHED ALL THE REQUIREMENTS OF THE ACT BEYOND DOUBT AND BY DISMISS ING THE ASSESSEES APPEAL BY TAKING ON RECORD ADDITIONAL EVIDENCE THAT WAS NOT BEFORE THE AO IN ASSESSMENT PROCEEDINGS. 3.4 THE LEARNED D.R. FOR REVENUE STRONGLY RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. ACCORDING TO THE LEARNED D.R. E XCEPT FOR RAISING VARIOUS CONTENTIONS IN THE GROUNDS RAISED (SUPRA) THE ASSE SSEE HAS NOT BEEN ABLE TO BRING ON RECORD ANY MATERIAL EVIDENCE TO ESTABLI SH THAT THE LEARNED CIT(A) PASSED THE IMPUGNED ORDER IN VIOLATION OF TH E PRINCIPLES OF NATURAL JUSTICE; THAT THE IMPUGNED ORDER WAS PASSED BY TAKI NG ON RECORD ADDITIONAL EVIDENCE OR THAT THE FACTS OF THE CASE WAS PROPERLY APPRECIATED WHILE COMING TO THE FINDING THAT THE PROFIT ON SALE OF SH ARES WAS NOT STCG AS CLAIMED BY THE ASSESSEE BUT WAS TO BE ASSESSED AS I NCOME FROM OTHER SOURCES. IT WAS PRAYED THAT INSPITE OF THE ASSESSEE BEING PROVIDED MANY OPPORTUNITIES OF HEARING BEFORE THE TRIBUNAL SINCE SHE WAS UNABLE TO BRING ANY MATERIAL EVIDENCE ON RECORD TO CONTROVERT THE F INDINGS OF THE LEARNED CIT(A) ON THIS ISSUE THE ASSESSEES APPEAL BE DISM ISSED. 3.5.1 WE HAVE HEARD THE LEARNED D.R. FOR REVENUE AT LENGTH AND PERUSED AND CAREFULLY CONSIDERED THE ORDERS OF THE AUTHORIT IES BELOW TO ELICIT THE VIEWS AND CONTENTIONS OF BOTH THE ASSESSEE AND THE REVENUE. THE LEARNED ITA NO. 3295/MUM/2014 MS. VAISHALI V. SHAHA 5 CIT(A) HAS CONSIDERED THE SUBMISSIONS OF THE ASSESS EE AND VIEWS OF THE AO IN THE IMPUGNED ORDER. IN THIS REGARD IT WOULD BE I N THE FITNESS OF THINGS TO EXTRACT HEREUNDER THE RELEVANT FINDINGS RENDERED IN THE IMPUGNED ORDER BY THE LEARNED CIT(A) AT PARAS 3.28 AND 4 THEREOF: - 3.2.8 AS PER ITAT ORDER IN THE CASE OF APPELLANT AN D THE OPERATIVE PART REPRODUCED IN PARA 3.1.2 OF THIS ORDER THE APP ELLANT WAS TO LEAD EVIDENCE IN SUPPORT OF HIS CLAIM THAT DELIVERY OF T HE SHARES WAS NOT IN DISPUTE AND THAT THE DELIVERY WAS TAKEN AND GIVEN. SINCE NO VERIFIABLE EVIDENCE IN SUPPORT OF DELIVERY HAS BEEN PRODUCED A ND EVEN THE NAME AND ADDRESS OF THE MAIN BROKER HAS NOT BEEN GIVEN T O FACILITATE THE ENQUIRY AND ALSO IN VIEW OF THE AFORESAID ORDERS OF ITAT IN THE CASE OF MUKESH CHOKSI GROUP IT IS HEREBY HELD THAT NO GENU INE TRANSACTION IN SHARES WAS EVER DONE BY THE APPELLANT AND THEREFORE THE QUESTION OF ANY DELIVERY AND EVIDENCE IN SUPPORT THEREOF DOES N OT ARISE. THEREFORE THOUGH THE AO IN THIS CASE HAS ASSESSED THE INCOME SHOWN IN BOGUS SHARES TRANSACTION AS SPECULATION INCOME THE SAME IS CORRECTLY ASSESSABLE AS INCOME FROM OTHER SOURCES SINCE THE SHARE TRANSACTIONS ARE BOGUS. THE AO IS DIRECTED TO ASSESS THE SAME UN DER THE HEAD INCOME FROM OTHER SOURCES. 4. IN THE RESULT THE APPEAL IS DISMISSED. 3.5.2 ON A PERUSAL OF THE DIRECTIONS OF THE COORDIN ATE BENCH OF THIS TRIBUNAL (EXTRACTED AT PARA 2.1 OF THIS ORDER) THE CONTRARY VIEWS AND CONTENTIONS OF THE ASSESSEE AND THE AUTHORITIES BEL OW THE PECULIAR FACTS AND CIRCUMSTANCES OF THIS CASE AND THE FINDING OF T HE LEARNED CIT(A) (EXTRACTED AT PARA 2.2 AND 3.5.1 OF THIS ORDER) WE ARE OF THE CONSIDERED VIEW THAT THE LEARNED CIT(A) HAS JUDICIOUSLY FOLLOW ED THE DIRECTIONS OF THE COORDINATE BENCH OF THIS TRIBUNAL IN RENDERING HIS FINDING. IN THE CASE ON HAND THE ASSESSEE WAS DIRECTED BY THE TRIBUNAL TO LEAD EVIDENCE IN SUPPORT OF HER CLAIM THAT DELIVERY OF THE SHARES WA S INFACT TAKEN AND GIVEN. HOWEVER IT IS SEEN THAT INSPITE OF BEING AFFORDED OPPORTUNITIES IN THIS REGARD THE ASSESSEE FAILED TO BRING ON RECORD ANY BASIC VERIFIABLE EVIDENCE TO SUPPORT THE CLAIM THAT DELIVERY OF SHARES HAD TA KEN PLACE. THE ASSESSEE FAILED TO GIVE EVEN THE NAME AND ADDRESS OF THE MAI N BROKER SO THAT ENQUIRIES/VERIFICATION AS TO THE GENUINENESS OF THE ASSESSEES CLAIM COULD HAVE BEEN CARRIED OUT. IT IS IN THAT VIEW OF THE MA TTER THAT THE LEARNED CIT(A) HELD THAT INCOME EARNED IN THE BOGUS SHARE T RANSACTION AS INCOME FROM OTHER SOURCES. EVEN BEFORE US NO EVIDENCE HA S BEEN BROUGHT ON ITA NO. 3295/MUM/2014 MS. VAISHALI V. SHAHA 6 RECORD TO CONTROVERT THE FINDINGS RENDERED BY THE L EARNED CIT(A). IN THESE PECULIAR FACTS AND CIRCUMSTANCES OF THIS CASE WE FI ND NO REASON TO INTERFERE WITH THE FINDINGS RENDERED BY THE LEARNED CIT(A) ON THIS ISSUE AND THEREFORE UPHOLD THE SAME. CONSEQUENTLY THE GROUND S 1 TO 7 RAISED BY THE ASSESSEE (SUPRA) ARE DISMISSED. 4. IN THE RESULT THE ASSESSEES APPEAL FOR A.Y. 2007- 08 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH OCTOBER 2016. SD/ - SD/ - (SANDEEP GOSAIN) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED: 28 TH OCTOBER 2016 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -26 MUMBAI 4. THE CIT - 15 MUMBAI 5. THE DR F BENCH ITAT MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI N.P.