Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (3) TMI 879 - ITAT PUNE

2015 (3) TMI 879 - ITAT PUNE - TMI - Income declared under the head capital gain was held to be non-genuine and the entire sale proceeds were to be assessed as undisclosed income - bogus and fraudulent - it was noted that the contract notes, bills issued by the brokers were found to be bogus on verification from the stock exchange - Penalty levied under section 271(1)(c) - Held that:- In the totality of the above said facts and circumstances, where the assessee has placed on record the complete .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

stablishes the case of the assessee of having purchased the said shares during that period. Further, the said shares were converted into Jumbo Certificates vide communication dated 16.02.2004 and thereafter, there was de-materialization of the shares on 26.07.2004. In the entirety of the above said facts and circumstances, we hold that the gain arising on transfer of shares is to be assessed as income from long term capital gain in the hands of the assessee. - Decided in favour of assessee.

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

year 2005-06 passed under section 143(3) r.w.s. 147 of the Income-tax Act, 1961 and penalty levied under section 271(1)(c) of the Income-tax Act, 1961. 2. Both the appeals relating to the same assessee were heard together and are being disposed of by this consolidated order for the sake of convenience. 3. The assessee in ITA No.2008/PN/2012 has raised the following grounds of appeal:- 1. In the facts and circumstances of the case and in law, the learned C.I.T.[A] has erred in confirming the pen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d penalty be deleted. 3. The appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal. 4. The assessee in ITA No.372/PN/2014 has raised the following grounds of appeal:- 1. In the facts and circumstances of the case and in law the learned C.I.T.[A] has grossly erred in confirming the decision of the learned Assessing Officer that the claim of the appellant assessee about Long Te .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r all grounds of appeal, if deemed necessary at the time of hearing of the appeal. 5. The appeal in ITA No.372/PN/2014 was filed after a delay of 1260 days. The assessee has moved an application for condonation of delay in filing the appeal late before the Tribunal. The plea of the assessee was that the CIT(A) had dismissed the appeal of the assessee on 19.07.2010. Further, it was submitted by the assessee that all her tax and legal matters were looked after by her husband late Shri Omprakash Mi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lty levied under section 271(1)(c) of the Act for assessment year 2005-06. It was only when she approached the tax consultant in respect of the said appeal, he asked whether any appeal before the Tribunal was filed against the dismissal of quantum appeal. On enquiry, it came to her knowledge that no appeal was filed against the re-assessment order before the Tribunal. After collecting the copies of documents from the Assessing Officer, the appeal was filed before the Tribunal after a delay of ab .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rakash Bhandari, aged about 61 years, Occupation Housewife do hereby declare on solemn oath and affirmation as under: 1. That for the A.Y.2005-06, the learned Dy.CIT Circle 2 Pune passed reassessment order u/s 143(3) r.w.s. 147 of the I.T. Act 1961 on 22/12/2008 in my case determined the net taxable income at ₹ 49,25,350.00 for the reasons as fully mentioned in the said order. 2. That the said reassessment order was challenged by me before the learned C.I.T.[A] II Pune by filing an appeal. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nd I had tremendous mental shock and it took about more than two years for me to recover from shock. 6. On or about 30/10/2013 I received the notice from the Registry of I.T.A.T. Pune intimating the date of hearing in ITA No.2008/PUN/2012 as 03/12/2013, in respect of the appeal filed by me against the penalty levied u/s 271[l][c] of the I.T. Act 1961 for the A.Y.2005-06. 7. When I approached to my tax consultant in respect of the aforesaid appeal, he asked me whether any appeal against the appel .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ved that no appeal against the reassessment order was filed before the Hon. I.T.A.T. Pune Benches Pune. I am not aware about the reasons as to why my late husband did not prefer any appeal before the Hon. I.T.A.T. Pune against the appellate order passed by the learned C.I.T.[A] 9. With utmost difficulty, I have collected the copies of documents from the learned Assessing Officer. I am now filing the appeal before the Hon. I.T.A.T. Pune Benches Pune challenging therein the appellate order passed .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s totally shattered. I had no malafide intentions in not filing the appeal within the statutory time limit. The delay caused in filing the appeal is due to circumstances beyond my control. 12. This affidavit is executed for filing the same before the Hon. I.T.A.T. Pune benches Pune, in the matter of condonation of delay in filing the appeal. 13. The contents of this affidavit are true and correct to the best of my knowledge and belief. 14. This affidavit is executed at Pune on this 28th day of J .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ppeal No.2395 of 2008, order dated 09.06.2010 iii) Shivshanti Constructions Pvt. Ltd., Vs. Dy.CIT in ITA No.1049/PN/2011, vide order dated 31.12.2012 Iv) Collector, Land Acquisition Vrs. Mst. Katiji And Others. 167 ITR 471 (SC) 8. The learned Departmental Representative for the Revenue on the other hand, pointed out that the appeal was dismissed by the CIT(A) on 19.07.2010 and her husband took a conscious decision in not filing any appeal against the said dismissal of appeal. It was further poin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

regard was placed on the ratio laid down by the Hon ble Madras High Court in M. Loganathan v. Government of India represented by Commissioner of Income-tax [2008] 302 ITR 139 (Mad). 9. We have heard the rival contentions and perused the record. The first aspect of the appeal before us is in relation to the condonation of delay in filing the appeal late by about 43 months. The assessee has filed an Affidavit along with an application for condonation of delay in filing the appeal late before the T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

a vested right in injustice being done because of a non-deliberate delay. Therefore, it follows that while considering matters relating to the condonation of delays a judicious and liberal approach is to be adopted. If sufficient cause is found to exist which is bona fide and not due to negligence of the applicant, the delay needs to be condoned in such which subserves the end of justice - that being the life purpose of the existence of the institution of courts." 10. Further, the Hon ble .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

reasonable ground to think that the delay was occasioned by the party deliberately to gain time, then the court should lean against acceptance of the explanation. While condoning the delay, the court should not forget the opposite party altogether. It must be borne in mind that he is a loser and he too would have incurred quite large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant, the court shall compensate the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

denied an opportunity to the appellant to lead evidence and to prove the issues so formulated. 3. In our opinion, ends of justice would be met by setting aside the impugned orders and matter is remitted to the Executing Court to consider and dispose of appellant's objections filed under Order 21 Rule 90 of CPC on merits and in accordance with law, at an early date. It is pertinent to point out that unless malafides are writ large on the conduct of the party, generally as a normal rule, dela .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hat justice should be done between the parties. 12. In the case before us, there is no material on record to doubt the bonafides of the assessee and there is no reason to doubt the bonafides of reason for delay. In the totality of the above said facts and circumstances, the delay in filing the present appeal belatedly deserved to be condoned. Accordingly, we condone the delay in filing the appeal before the Tribunal and proceed to decide the appeal on merits after hearing both the parties. 13. T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of income from capital gains on sale of shares of companies, which were held to be bogus and fraudulent, by the authorities below. 15. The brief facts of the case are that, the assessee had declared income from long term capital gains on sale of shares of M/s. Fast Track Entertainment Ltd. The Assessing Officer however, received information from the ADIT (Investigation) Unit-1(1), Pune regarding irregularities in the purchase and sale of share transactions of M/s. Fast Track Entertainment Ltd. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ffices and residential premises of several stock brokers and managers of finance companies, it was found that there were large scale manipulations in purchases and sale of some of the shares. The shares of the alleged companies were shown to have been purchased at the prevailing market rate of ₹ 1/- to 2/- per share to facilitate the concerned share purchaser to claim shares holding for more than 12 months, whereas in actual practice, there is no real purchase or sale of shares at all. Som .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

were purchased from the broker Sunil shares and Stock P. Ltd. The said shares purchased in physical form and copies of contract notes of purchase of these shares in the month of June, 2003 were furnished before the Assessing Officer. However, from the ledger account extract of brokers submitted by the assessee, it was seen that though the purchases were made in the month of June, 2003, the payment to the broker was made on 15.07.2004. Further, the shares were de-materialized on 26.07.2004. The A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Ltd. had earned very low income of ₹ 2.1 lakhs and marginal net profit of ₹ 1.1 lakhs during the financial year ending 31.03.2004. However, the price of scrip increased from ₹ 13.16 to ₹ 33.30 and then to ₹ 60/-. Further, information was collected in respect of market transactions conducted by the said company which is reproduced by the Assessing Officer at pages 5 and 6 of the assessment order. On analysis, there was a proposal to initiate action against certain c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

purchase of shares of M/s. Fast Track Entertainment Ltd. had not taken place on the said date. Further, investigation by various regulating authorities into the price manipulations of scrips of various companies also proves the said fact the companies of which shares were claimed to have transacted by the assessee, also enjoyed dubious reputation and were under investigation by several regulatory authorities. In view thereof, the assessee s claim of sales of shares of M/s. Fast Track Entertainme .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e. 17. The assessee is in appeal against the order of CIT(A) and it was pointed out by the learned Authorized Representative for the assessee that the shares were admittedly purchased in the month of June, 2003, against which no payment was made by the assessee since the broker owed money to the assessee. Our attention was drawn to the documents placed at pages 12 and 3 of Paper Book. It was further pointed out by the learned Authorized Representative for the assessee that the shares purchased b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

TA No.1436/PN/2011, order dated 15.01.2014. The learned Authorized Representative for the assessee also placed on record the statement issued by The Cosmos Co-operative Bank Ltd. 18. The learned Departmental Representative for the Revenue pointed out that the D-Mat of said shares was carried out on receipt of Jumbo Certificates. The learned Departmental Representative for the Revenue referred to the order of CIT(A), in which it has been pointed out that on receipt of information, other parties h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tentions and perused the record. The assessee during the year under consideration had transacted into purchase and sale of shares. One transaction which has been taken note of by the authorities below was the sale of shares of M/s. Fast Track Entertainment Ltd. The assessee claims to have sold 1,00,000 shares of the said concern during the year under consideration, which in turn were purchased by the assessee in June, 2003. The assessee has placed on record the contract notes for the purchase of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er by cheque or cash but same was adjusted against the amount due from the said broker in the running account of the assessee with the said broker. The contract notes for the purchase of the said shares are also placed on record by the learned Authorized Representative for the assessee. Further, on 04.07.2003, the company had confirmed the receipt of transfer deeds along with share certificates to transfer the said shares in the name of the assessee. The assessee had sent three certificates i.e. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mpany on 16.02.2004 and the copy of the communication is placed at page 26 of the Paper Book. The copies of the Jumbo Certificates are placed at pages 27 to 29 of the Paper Book. The copy of D-Mat account dated 31.07.2004 evidencing the D-matting of 1,00,000 shares on 26.07.2004 is placed at page 30 of the Paper Book. The said shares were sold by the assessee in the month of August, 2004 in different lots and the contract notes of the broker are placed at pages 32 to 37 of the Paper Book. The to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e from long term capital gains as claimed by the assessee or under the head income from other sources as determined by the authorities below. The first aspect to be considered in the case of assessee is that though enquiries were made in respect of several companies and brokers, but the name of broker through whom the assessee had transacted in the shares of M/s. Fast Track Entertainment Ltd. does not appear in that said list. Further, the assessee has produced complete evidence vis-à-vis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, in view of the circumstantial evidence produced by the assessee. In the totality of said evidences, we hold that once the assessee had taken the delivery of shares by way of share certificates, which in turn, were forwarded to the company along with transfer deeds on 04.07.2003 itself establishes the case of the assessee of having purchased the said shares during that period. Further, the said shares were converted into Jumbo Certificates vide communication dated 16.02.2004 and thereafter, the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ITAT by the impugned order allowed the claim of the Assessee by recording that the purchase of shares during the year 1999-2000 and 2000-2001 were duly recorded in the books maintained by the Assessee. The ITAT has recorded a finding that the source of funds for acquisition of the shares was the agricultural income which was duly offered and assessed to tax in those Assessment Years. The Assessee has produced certificates from the aforesaid four companies to the effect that the shares were in-fa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ither the case of the Revenue that the shares in question are still lying with the Assessee nor it is the case of the Revenue that the amounts received by the Assessee on sale of the shares is more than what is declared by the Assessee. Though there is some discrepancy in the statement of the Director of M/s. Richmand Securities Pvt. Ltd. regarding the sale transaction, the Tribunal relying on the statement of the employee of M/s. Richmand Securities Pvt. Ltd. held that the sale transaction was .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version