2015 (9) TMI 1678 - AT - Income Tax

Long term capital gain - Additions made by the AO in the absence of complete satisfactory documentary evidence - HELD THAT - As decided in KAMAL KUMAR S. AGRAWAL (INDL.) ORS. 2009 (7) TMI 1251 - ITAT NAGPUR Assessee has placed on record all the evidences to support the sale transactions including the quotation of the said shares on the date of sale which tallies with the sale price of the assessee. No opportunity to cross-examine the broker was given to the assessee. These authorities have held that no adverse cognizance of the fact that the broker could not be produced or the companies were not found at their addresses can be taken. Thus the above mentioned authorities are squarely applicable to the assessee. In view of the evidences and authorities placed on record by the assessee in the absence of any evidence or document brought on record by the assessing officer to negate the contentions raised by the assessee the transaction of sale of the said shares was genuine and resulted into a long term capital gain of Rs. 13, 52, 6501- to the assessee. Thus the addition is hereby deleted assessing officer is directed to assess the long term capital gain as declared by the assessee and charge the same to tax @ 10%. Thus this ground of appeal is allowed.

Summary

Issues:
1. Condonation of delay in filing appeal and admitting Cross Objection.
2. Grounds of appeal raised by the Revenue.
3. Grounds of appeal raised in the Cross Objection.
4. Assessment order regarding long term capital gain.
5. Factual findings and conclusions by the Ld.CIT(A).
6. Dismissal of Revenue's appeal and Cross Objection.

Condonation of Delay and Cross Objection: The appellant sought condonation of delay in filing the appeal due to the illness of their counsel, which led to negligence. The ITAT invoked Rule 27 of the ITAT Rules and admitted the Cross Objection after considering the submissions made by the appellant's counsel.

Grounds of Appeal by Revenue: The Revenue raised various grounds of appeal, challenging the correctness of the Ld.CIT(A)'s order and the deletion of additions made by the AO concerning long term capital gain. The Revenue also sought leave to add, alter, or amend grounds during the appeal hearing.

Grounds of Cross Objection: The Cross Objection raised by the appellant contended that the assessment order passed under section 143(3) r.w.s. 153C/A of the Act was illegal and void ab initio due to procedural irregularities, including the lack of specific notices and jurisdictional requirements.

Assessment Order on Long Term Capital Gain: The Ld.CIT(A) made factual findings regarding the sale of shares, emphasizing the authenticity of the transactions and providing detailed reasoning for deleting the additions made by the AO. The Ld.CIT(A) considered evidence presented by the appellant, including share certificates, market rates, and regulatory compliance, to support the genuineness of the transactions.

Factual Findings and Conclusions: The Ld.CIT(A) highlighted the lack of evidence contradicting the appellant's submissions, emphasizing the importance of market rates, official quotations, and compliance with regulatory authorities in determining the authenticity of the transactions. The Ld.CIT(A) referred to relevant case laws supporting the appellant's contentions and ultimately deleted the additions made by the AO.

Dismissal of Revenue's Appeal and Cross Objection: The ITAT dismissed the Revenue's appeal based on the factual findings and conclusions made by the Ld.CIT(A), which were not successfully challenged by the Revenue. As relief was granted on merits, the legal issues raised in the Cross Objection were not addressed, leading to the dismissal of both the Revenue's appeal and the appellant's Cross Objection.