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Shri Himanshu Nalin Kaji Versus DCIT-16 (3) , Matru Mandir, Mumbai.

2015 (10) TMI 16 - ITAT MUMBAI

Short term capital gain - sale of equity shares through a recognized stock exchange on which Securities Transaction Tax (STT) - whether has been wrongly taxed at normal rate, whereas, it should be taxed at special rate of 10% as specified u/s 111A? - Held that:- Approach adopted by the income tax authorities in the present situation is quite myopic and deserves to be repelled. The statutory provision of section 111A of the Act providing for a concessional tax rate on short term capital gain aris .....

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on mentioning of such income in one of the columns of the income tax return is to be understood as an inadvertent mistake because in the same form of return of income, at more than one place, assessee has shown such income to be entitled for concessional rate of taxation. In the aforesaid light, in our view, the CIT(A) erred in not allowing the claim of assessee for taxing the short term capital gain as per the special rate specified u/s 111A of the Act. Accordingly, the order of CIT(A) is set a .....

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ected against the order of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A) ] dated 19-07-2013, which in-turn has arisen from an order passed by the Assessing Officer u/s 154 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) dated 19-5-2010 pertaining to assessment year 2008-09. 2. In this appeal, assessee has raised the following Grounds of appeal:- 1) On the facts and in the circumstances of the case and in law the learned Assessing Officer has er .....

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s should be taxed at Special Rate as specified under the Section IIIA of the Income tax Act. Thus the appellant is appealing for relief against the unlawful act of the Assessing Officer (A.O.) by taxing the Short Term Capital Gains on which Securities Transaction tax is already suffered at the Lower Rate of 10% as per Section IIIA of the Income tax Act, 1961 instead of the Normal Rates applicable to Individual as applied by the learned Assessing Officer. 2) On the facts and in the circumstances .....

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e Special Rate of Income tax U/s.ll1 A is applicable. However, the Assessing Officer has conveniently ignored the fact that the said figure of Short Term Capital Gains on Sale of Equity Shares on which Securities Transaction Tax is suffered and thus is eligible for the Special Rates as applicable under Section IIIA of the Income tax Act, 1 961 was mentioned in Item No.2 of Schedule SI - Income Chargeable to Income Tax at Special Rate and also the Rate of the Income tax applicable on such transac .....

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n the facts and in the circumstances of the case and in law the learned Assessing Officer is unjustified in not giving appellant an opportunity to substantiate and/or prove that the Securities Transaction tax was suffered on the Sale of Short Term Capital Asset - Equity Shares. The Assessing Officer was determined to tax the Short Term Capital gains at Normal Rates without giving any opportunity to hear the appellant. Thus, the appellant appeals for an opportunity to be heard. 4) The benefit of .....

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Stock Exchange and further when the Normal Rate of Tax which in case of the appellant is 33.99%, is applied on such Short Term Capital Gains. Thus, the appellant appeals against the unlawful act of the Assessing Officer. 5) The act of taxing Short Term Capital Gains on Sale of Equity Shares on which Securities Transaction Tax is suffered is devoid of any merit, arbitrary, uncalled for and bad in law, the appellant be given such relief or reliefs as prayed for. 3. In this appeal, the only grieva .....

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11.08.2010. The plea of assessee did not find favour with the CIT(A) also and accordingly, assessee is in further appeal before us. 5. A perusal of the orders of authorities below reveal that the impugned income earned by the assessee has been subject to the normal rate of tax instead of concessional rate of tax provided u/s 111A of the Act on the ground that the return of income in Form No. ITR-4, furnished by the assessee did not contain such a claim in item no. 4) a) i) of the Part-B, in the .....

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pital gain chargeable to concessional tax rate u/s 111A of the Act of ₹ 4,20,550/- has been filled up by the assessee. In the course of hearing before us. The Ld. Representative for the assessee has taken us through the various columns in the return of income Form ITR-4 and pointed out that stating of Nil in item no. 4)a)i) of Part-B, of computation of total income was a mistake. Even otherwise, a reference has been made to page 36 to 49 of the Paper Book to point out the details of short .....

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term capital gain of ₹ 4,20,550/- has been wrongly stated in the main portion of the return of income Form ITR-4, in part-B computation of total income, though the same has been correctly depicted in the annexures and other schedules annexed to the return of income Form ITR -4. The plea of the Revenue is that the information furnished in the schedules and annexures to the return cannot override the declaration made in the return form. 7. In our considered opinion, the approach adopted by .....

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