ROOPLATA JAIN, MUMBAI v. ACIT CEN CIR 12, MUMBAI

ITA 6747/MUM/2010 | 2007-2008
Pronouncement Date: 08-04-2014 | Result: Allowed

Appeal Details

RSA Number 674719914 RSA 2010
Assessee PAN AAJPJ6648L
Bench Mumbai
Appeal Number ITA 6747/MUM/2010
Duration Of Justice 3 year(s) 6 month(s) 15 day(s)
Appellant ROOPLATA JAIN, MUMBAI
Respondent ACIT CEN CIR 12, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 08-04-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 08-04-2015
Date Of Final Hearing 23-03-2015
Next Hearing Date 23-03-2015
Assessment Year 2007-2008
Appeal Filed On 23-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND AMIT SHUKLA (JM) . . ./ I.T. A. NO. 6747/ MUM/20 10 ( / ASSESSMENT YEAR : 20 0 7 - 08 ) SMT.ROOPLATA JAIN B - 502 SUKH SAGAR BUILDING. 5 TH FLOOR LAMINGTON ROAD MUMBAI - 400008 / VS. ASSTT. COMMISSIONER OF INCOME TAX CC - 12 8 TH FLOOR OLD CGO M K ROAD MUMBAI - 4 00020 ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN/GIR NO. : AAJPJ6648L / APPELLANT BY SHRI JAYANT R BHAT T / RE SPONDENT BY SHRI AKHILENDRA P YADAV / DATE OF HEARING : 23.3.2015 / DATE OF PRONOUNCEMENT : 8.4 .2015 / O R D E R PER B.R. BASKARAN (AM) THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 07 - 07 - 2010 PASSED BY LD CIT(A ) - 37 MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2007 - 08. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ASSESSMENT OF LONG TERM CAPITAL GAIN AS INCOME FROM OTHER SOURCES. 3. WE HEARD THE PARTIES AND PERUSED THE RECORD. TH E ASSESSEE DECLARED LONG TERM CAPITAL GAIN (LTCG) ON SALE OF SHARES OF M/S ROBINSON WORLDWIDE TRADE LTD AND CLAIMED THE SAME AS EXEMPT. HOWEVER CONSEQUENT TO THE SEARCH OPERATIONS CONDUCTED ON 18 - 01 - 2007 IN THE CASE OF SHRI NARESH SABOO AND OTHERS IT CA ME TO LIGHT THAT THE TRANSACTION OF I.T.A. NO. 6747 / MUM/ 2010 2 PURCHASE OF THE ABOVE SAID SHARES WAS CARRIED THROUGH M/S DPS SHARES & SECURITIES P LTD. WHEN A SURVEY WAS CONDUCTED AT THE PREMISES OF THE ABOVE SAID SHARE BROKER ON 18 - 01 - 2007 THE DIRECTOR OF THE ABOVE SAID SHARE BRO KING COMPANY CONFESSED THAT IT DID NOT ACTUALLY PURCHASE THE SHARES OF M/S ROBINSON WORLDWIDE TRADE LTD BUT PROVIDED ONLY ACCOMMODATION BILLS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER AGAIN SUMMONED ONE OF THE DIRECTORS OF M/S D PS SHARES & SECURITIES P LTD ON 18.11.2008 AND RECORDED A STATEMENT WHEREIN THE DIRECTOR AGAIN CONFIRMED THE FACT OF PROVIDING ONLY ACCOMMODATION BILLS IN THE SHARES OF M/S ROBINSON WORLDWIDE TRADE LTD. ACCORDINGLY THE AO PROPOSED TO ASSESS THE LONG TER M CAPITAL GAIN AS INCOME OF THE ASSESSEE. THE ASSESSEE SOUGHT FOR CROSS EXAMINATION OF THE DIRECTOR OF M/S DPS SHARES & SECURITIES P LTD AND THE SAME WAS PROVIDED BY THE ASSESSING OFFICER. IN THE CROSS EXAMINATION THE DIRECTOR ADMITTED THAT HE HAS NOT AC COUNTED FOR THE TRANSACTIONS RELATING TO ACCOMMODATION BILLS IN ITS BOOKS OF ACCOUNT BUT MAINTAINED ITS STAND THAT THERE WAS NO ACTUAL DELIVERY OF SHARES BUT ONLY ACCOMMODATION BILLS WERE GIVEN. THOUGH THE SHARES WERE FOUND TO HAVE BEEN SOLD THROUGH THE D - MAT ACCOUNT YET THE AO DOUBTED THE SAME SINCE THE PURCHASES WERE NOT MADE THROUGH BANKING CHANNELS I.E. THE PURCHASES WERE MADE EITHER BY ADJUSTING THE SPECULATION PROFITS CLAIMED TO HAVE BEEN EARNED BY THE ASSESSEE OR BY PAYING CASH. ACCORDINGLY T HE AO CAME TO THE CONCLUSION THAT THE PURCHASES HAVE BEEN BACK DATED IN ORDER TO DECLARE LONG TERM CAPITAL GAIN. ACCORDINGLY THE AO CAME TO THE CONCLUSION THAT THE WHOLE OF TRANSACTIONS OF PURCHASE AND SALE ARE SHAM TRANSACTIONS AND ACCORDINGLY ASSESSED THE LONG TERM CAPITAL GAIN AS INCOME OF THE ASSESSEE UNDER INCOME FROM OTHER SOURCES. THE AO ALSO ASSESSED 5% OF THE LTCG AS THE CHARGES INCURRED BY THE ASSESSEE IN OBTAINING BOGUS LTCG. THE LD CIT(A) ALSO CONFIRMED THE ADDITIONS BY HOLDING THAT THE ASSE SSEE HAS FAILED TO DISCHARGE THE BURDEN OF PROOF I.T.A. NO. 6747 / MUM/ 2010 3 PLACED UPON HER U/S 68 OF THE ACT. AGGRIEVED THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 4. A PERUSAL OF THE ORDERS PASSED BY THE TAX AUTHORITIES WOULD SHOW THAT THEY HAVE PLACED THEIR RELIANCE WHOL LY ON THE STATEMENT GIVEN BY THE DIRECTORS OF M/S DPS SHARES & STOCK SECURITIES LTD. THE CONTENTION OF THE LD A.R WAS THAT THE ABOVE SAID SHARE BROKING FIRM HAS NOT ACCOUNTED THE SHARE TRANSACTIONS CARRIED ON BY THE ASSESSEE AND HENCE IN ORDER TO SUIT IT S CONVENIENCE THE DIRECTOR OF THE ABOVE SAID COMPANY HAS STATED THE TRANSACTIONS OF PURCHASE TO BE BOGUS TRANSACTIONS. THE LD A.R SUBMITTED THAT THE PRESUMPTION OF BACK DATING OF PURCHASES IS NOT CORRECT SINCE THE PURCHASES MADE ON 07.04.2004 WERE DULY REFLECTED IN THE RETURN OF INCOME FILED FOR AY 2005 - 06 ON 30.10.2005. THEREAFTER THE SHARES HAVE BEEN SOLD ON 04 - 09 - 2006 AFTER DEMATERIALISING THEM. ACCORDINGLY HE SUBMITTED THAT THE TIME GAP BETWEEN THE PURCHASES AND SALES THE RETURN OF INCOME FILED FOR AY 2005 - 06 THE DE - MATERIALISATION OF SHARES AND THEIR SALE THEREAFTER CLEARLY PROVE THE GENUINENESS OF THE PURCHASES AND SALES. THE LD A.R FURTHER PLACED RELIANCE ON THE DECISION RENDERED BY THE CO - ORDINATE BENCH IN ITA NO.787 - M - 2010 DATED 30 - 12 - 2011 IN THE CASE OF SHRI ARVIND M KARIYA WHEREIN THE TRIBUNAL CONSIDERED IDENTICAL ISSUES OF PURCHASE AND SALE OF SHARES OF M/S ROBINSON WORLDWIDE TRADE LTD AND HELD THAT THE PURCHASE AND SALE OF SHARES WERE GENUINE. 5. ON THE CONTRARY THE LD D.R PLACED STRONG RELIANCE ON THE ORDERS OF TAX AUTHORITIES. 6. BEFORE US THE ASSESSEE FILED COPIES OF INCOME TAX RETURNS FILED FOR AY 2005 - 06 AND 2006 - 07; COPIES OF BROKER NOTES FOR PURCHASE OF SHARES DEMATERIALISATION DETAILS COPIES OF BROKER NOTES FOR SAL E OF SHARES BANK STATEMENTS LEDGER ACCOUNT COPIES ISSUED BY M/S DPS SHARES AND SECURITIES P LTD ETC. WE NOTICE THAT BOTH THE TAX AUTHORITIES HAVE FAILED TO I.T.A. NO. 6747 / MUM/ 2010 4 EXAMINE THEM IN ORDER TO FIND OUT ABOUT THE VERACITY OF THE CLAIM PUT FORTH BY THE ASSESSEE. INS TEAD BOTH THE TAX AUTHORITIES HAVE BEEN SWAYED AWAY BY THE STATEMENT GIVEN BY THE DIRECTORS OF M/S DPS SHARES & SECURITIES LTD. THERE MAY BE MERIT IN THE CONTENTIONS OF THE ASSESSEE THAT THE STATEMENT GIVEN BY THE DIRECTORS OF THE ABOVE SAID COMPANY SHOUL D NOT BE RELIED UPON SINCE THEY HAVE GIVEN THE STATEMENT TO SUIT THEIR OWN CONVENIENCES SINCE THESE TRANSACTIONS WERE NOT ACCOUNTED FOR BY THEM. UNDER THESE CIRCUMSTANCES IN OUR VIEW IT MAY NOT BE PROPER TO DRAW ADVERSE INFERENCES AGAINST THE ASSESSEE BASED UPON THE STATEMENT GIVEN BY THE DIRECTORS OF M/S DPS SHARES & SECURITIES P LTD ALONE. IN OUR VIEW THE EVIDENCES FURNISHED BY THE ASSESSEE WITH REGARD TO THE PURCHASE AND SALE OF SHARES SHOULD HAVE BEEN DISCREETLY EXAMINED AND THEN A HOLISTIC VIEW OF THE MATTER SHOULD HAVE BEEN TAKEN BY THE TAX AUTHORITIES. SINCE THE TAX AUTHORITIES HAVE FAILED TO EXAMINE THE BASIC EVIDENCES WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION AT THE END OF THE ASSESSING OFFICER. WHILE EXAMINING THE SAME THE AO SHOULD ALSO TAKE INTO ACCOUNT THE DECISION RENDERED BY THE CO - ORDINATE BENCH IN THE CASE OF SHRI ARVIND M KARIYA (REFERRED SUPRA). ACCORDINGLY WE SET ASIDE THE ORDER OF LD CIT(A) AND RESTORE ALL THE ISSUES TO THE FILE OF THE ASSESSING OFFICER FO R FRESH EXAMINATION IN THE LIGHT OF DISCUSSIONS MADE SUPRA. 7. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. THE AB OVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 8TH APRIL 2015 . 8TH APRIL 2015 SD SD ( / AMIT SHUKLA ) ( . . / B.R. BASKARA N) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI: 8TH APRIL 2015 . I.T.A. NO. 6747 / MUM/ 2010 5 . . ./ SRL SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. / DR ITAT MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER TRUE COPY (ASSTT. REGISTRAR) /ITAT MUMBAI