M/s. Harbans Singh & Co., New Delhi v. ACIT, New Delhi

ITA 4972/DEL/2011 | 2006-2007
Pronouncement Date: 30-03-2012 | Result: Allowed

Appeal Details

RSA Number 497220114 RSA 2011
Assessee PAN AACFH0903P
Bench Delhi
Appeal Number ITA 4972/DEL/2011
Duration Of Justice 4 month(s) 21 day(s)
Appellant M/s. Harbans Singh & Co., New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 30-03-2012
Date Of Final Hearing 29-02-2012
Next Hearing Date 29-02-2012
Assessment Year 2006-2007
Appeal Filed On 09-11-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C NEW DELHI) BEFORE SHRI G.D. AGARWAL HONBLE VICE-PRESIDENT AN D SHRI RAJPAL YADAV: HONBLE JUDICIAL MEMBER ITA NO. 4972/DEL/2011 ASSESSMENT YEAR: 2006-07 M/S. HARBANS SINGH & CO. VS. ASSISTANT CIT B-88 DEFENCE COLONY CIRCLE 32(1) NEW DELHI-1100 24 NEW DELHI. (PAN: AACFH0903P) (APPELLANT) (RESPONDENT) APPELLANT BY: S/SH. A.TANEJA & KUNAL NAGPAL ARS RESPONDENT BY: SMT. YS KAKKAR S R. DR DATE OF HEARING : 29.02.2012 DATE OF PRONOUNCEMENT : 30.03.2012 ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LEARNED CIT(APPEALS) DATED 26.8.2011 PASSED FOR ASSESSMENT YEAR 2006-07. THE ASSESSEE HAS TAKEN SIX GROUNDS OF APPEAL HOWEVER ITS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE WHEREBY IT IS IMPUGNING THAT THE LEARNED CIT(APPEAL S) HAS ERRED IN CONFIRMING THE ADDITION OF RS.3 56 691 WHICH WAS ADDED BY THE ASSE SSING OFFICER AS INCOME EARNED ON ACCOUNT OF SHORT TERM CAPITAL GAIN. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED ITS RETURN OF INCOME DECLARING INCOME OF RS.20 50 633. THE RETURN WAS PR OCESSED UNDER SECTION 143(1) OF THE ACT ON 11.4.2007. SUBSEQUENTLY THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND A NOTICE UNDER SEC. 143(2) OF THE AC T WAS ISSUED UPON THE ASSESSEE ON 2 09.07.2007. ASSESSING OFFICER WITHOUT CONFRONTING T HE ASSESSEE MADE AN ADDITION OF RS.3 56 691. HIS BRIEF OBSERVATIONS READ AS UNDER: THE ASSESSEE VIDE HIS LETTER DT. 09.11.2008 HAS ST ATED THAT THERE WAS NO CAPITAL GAIN DURING THE YEAR UNDER CONSIDERATION. B UT A PERUSAL OF STATEMENT OF ICICI PRUDENTIAL MUTUAL FUNDS FILED BY THE ASSE SSEE ALONG WITH HIS LETTER DT. 09.11.2008 THAT THE ASSESSEE ON 24.05.2005 HAS SWITCHED OUT 34 961.809 UNITS TO LIQUID PLAN OUT THE TOTAL 67 208.595 UNITS THEREBY LEAVING BALANCE OF 32 246.786 UNITS. THE ASSESSEE HAS AGAIN SWITCHED O UT BALANCE UNITS OF 32 246.786 TO INCOME PLAN. THE ASSESSEE HAS EARNED SHORT TERM CAPITAL GAIN OF RS.3 56 691.13 ON THE ABOVE TRANSACTION WHICH HAS NOT BEEN DECLARED BY THE E IN IS RETURN. THE ABOVE TRANSACTION IS SUMMARIZED B ELOW: OPENING BALANCE SCHEME NO. OF UNITS ACTION/DATE AMOUNT NO. OF UNITS REMAINING 167208.595 LIQUID PLAN GROWTH 34961.809 SWITCHED OUT 1001502 32246.786 32246.786 INCOME PLAN GROWTH 32246.786 SWITCHED OUT 30.6.05 946130.38 NIL 3. APPEAL TO THE LEARNED CIT(APPEALS) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS INVESTED A SUM OF RS.30 LACS ON 3.3.2000 IN ICICI PRUDENTIAL MUTUAL FUND. THE CASE OF THE ASSESSING OFFICER IS THAT FROM PERUSAL OF M/S. ICIC I PRUDENTIAL FUND STATEMENT FOR THE PERIOD 01.04.2005 TO 31.3.2006 SUGGESTS THAT AS SESSEE HAD SWITCHED IN 32680.608 UNITS INTO LIQUID PLAN ON 23.9.2004 AND SIMILARLY 3 0927.987 UNITS WERE SWITCHED IN LIQUID PLAN GROWTH FROM THE EXISTING ICICI PRUDENTI AL TECHNOLOGY FUND GROWTH. 3 THE ASSESSEE HAS SWITCHED OUT 34961.809 UNITS FROM LIQUID PLAN TO LIQUID PLAN GROWTH ON 24.5.2005. ACCORDING TO THE ASSESSING OFF ICER THIS SWITCHED IN AND SWITCHED OUT OF A PLAN AMOUNTS TO TRANSFER OF SHARE S WHICH ATTRACTS CAPITAL GAIN. ASSESSING OFFICER HAS OBSERVED THAT THE SWITCHED IN AND SWITCHED OUT HAPPENED DURING THE ACCOUNTING PERIOD RELEVANT TO ASSESSMENT YEAR 2006-07 ONLY DESERVED TO BE CONSIDERED FOR COMPUTATION OF SHORT TERM CAPITAL GAIN. HE POINTED OUT THAT ASSESSING OFFICER DID NOT PROVIDE ANY OPPORTUNITY T O THE ASSESSEE TO EXPLAIN ITS CASE. SIMILARLY ASSESSING OFFICER DID NOT BOTHER TO LOOK INTO HOW THIS TRANSACTION WAS CONSIDERED IN THE PAST. HE SHOULD HAVE CONSIDERED THE INVESTMENT MADE BY THE ASSESSEE IN 2000 AND IN ANY CASE IT IS A LONG TERM CAPITAL GAIN. 5. LEARNED DR ON THE OTHER HAND RELIED UPON THE ORD ERS OF THE REVENUE AUTHORITIES BELOW. SHE POINTED OUT THAT AS AND WHEN ASSESSEE SWITCHED IN A NEW SCHEME IT AMOUNTS TO FRESH INVESTMENT AND WHEN ASS ESSEE WOULD SWITCH OUT THE SHORT TERM CAPITAL GAIN WOULD ARISE. ASSESSING OFFI CER HAS RIGHTLY TAXED THE ASSESSEE FOR EARNING SHORT TERM CAPITAL GAIN. 6. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT BOTH THE REVENUE AUTHORITIE S BELOW HAVE NOT GRANTED PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. LEARNED ASS ESSING OFFICER WITHOUT CONFRONTING THE ASSESSEE HAS FORMED OF OPINION ABO UT CONSIDERING THE EARNING OF SHORT TERM CAPITAL GAIN HE STRAIGHTWAY COMPUTED T HE SHORT TERM CAPITAL GAIN. IN OUR OPINION LEARNED ASSESSING OFFICER OUGHT TO HAV E CONFRONTED THE ASSESSEE WITH 4 REGARD TO HIS PROPOSED OPINION IN RESPECT OF A TRAN SACTION. HE OUGHT TO HAVE SOUGHT ASSESSEES EXPLANATION. TAKING INTO CONSIDERATION A LL THE FACTS AND CIRCUMSTANCES WE ARE OF THE OPINION THAT ENDS OF JUSTICE WOULD MEET IF WE SET ASIDE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR READJUDICATION. THE AS SESSEE WILL BE AT LIBERTY TO SUBMIT ANY MATERIAL IN SUPPORT OF ITS EXPLANATION. ASSESSI NG OFFICER SHALL READJUDICATE THE ISSUE AFTER PROVIDING DUE OPPORTUNITY OF HEARING. I T IS NEEDLESS TO SAY THAT THE OBSERVATIONS MADE BY US WILL NOT IMPAIR OR INJURE T HE CASE OF A.O. OR WOULD NOT CAUSE ANY PREJUDICE TO THE DEFENCE/EXPLANATION OF T HE ASSESSEE. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 30.03.201 2 SD/- SD/- ( G.D. AGRAWAL ) ( R AJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30/03/2012 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR