TMI Blog2023 (1) TMI 1067X X X X Extracts X X X X X X X X Extracts X X X X ..... of the A.O. The A.O. is directed to afford a reasonable opportunity of hearing to the assessee and decide the issue in accordance with law - Appeal filed by the assessee is allowed for statistical purposes. - IT(IT)A No.720/Bang/2022 : - - - Dated:- 10-10-2022 - Shri George George K, JM Ms.Padmavathy S, AM For the Appellant : Sri.Sudheendra B.R, Advocate For the Respondent : Capt.Pradeep Arya, CIT-DR ORDER Per George George K, JM : This appeal at the instance of the assessee is directed against final assessment order dated 28.07.2022 passed u/s 143(3) r.w.s. 144C(13) of the I.T.Act. The relevant assessment year is 2019-2020. 2. The solitary issue that was argued is with regard to the restriction of cost of acquisition in respect of shares sold to Rs.72,27,660 as compared to the amount of Rs.2,13,73,864 claimed by the assessee. 3. The brief facts of the case are as follows: The assessee is an individual, who was employed with M/s.Wipro Limited during the relevant assessment year. For the assessment year 2019-2020, the return of income was filed in the capacity of non-resident on 22.07.2019 declaring total income of Rs.3,16,670. The tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f acquisition , which according to the assessee, was as per section 49(2AA) of the I.T.Act. Therefore, the total cost of acquisition claimed amounted to Rs.2,13,73,564. 5. The Assessing Officer passed draft assessment order u/s 143(3) r.w.s. 144C on 30.09.2021. In the said order, with respect of transaction of shares sold, the cost of acquisition was restricted to the amount of perquisite that offered to tax in the earlier assessment year (i.e. A.Y. 2018-2019). Thus, in the draft assessment order, the cost of acquisition with respect ot shares sold was restricted to Rs.72,27,660 as compared to an amount of Rs,2,13,73,564 claimed by the assessee in the return of income. Accordingly, the capital gains on shares was computed by the A.O. The A.O. however incorrectly characterized such gains as long term capital gains and provided indexation benefit on cost of acquisition. Further, the A.O. had also allowed set off of capital loss on sale of property (assessee s share) against the long term capital gains. 6. Aggrieved by the draft assessment order, the assessee filed objections before the Dispute Resolution Panel (DRP). The DRP vide its directions dated 29.06.2022 disposed of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 881 2005 01.04.2010 30000 28.11.2017 2 294.50 292.50 25,18,500 2007 01.04.2015 9600 07.02.2018 2 291.73 291.73 48,288 Total 72,27,660 2.4.3 The AO has mentioned that (as evident from the table above), (i) the assessee has exercised his ESOP option during the F.Y. 2017-18; (ii) since the market value of the shares exercised by the assessee is more than the exercise value, the difference amount should have been offered by the assessee as perquisites in the return, which the assessee has failed to do. 2.4.4 The AO restricted the cost of acquisition to Rs.72,27,660/- being the perquisite value as against Rs.2,12,27,464/- claimed by the assessee. 2.4.5 The assessee has objected to the proposed addition. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,13,73,864 claimed by the assessee solely for the reason that the assessee had not produced Tax Residency Certificate (TRC) as directed by the DRP. The relevant finding of the A.O. in the final assessment order in this regard reads as follows:- B: With regard to the cost of acquisition of shares of M/s Wipro Limited amounting to Rs.1,41,45,894/- claimed by the assessee, the Hon ble DRP directed the undersigned to obtain and verify the copy of Tax Residency Certificate obtained from USA for the relevant A.Y s and copy of the returns filed in the USA for the relevant A.Y s, duly evidencing the taxes paid with reference to TRC and other requirements. However, the assessee failed to submit the TRC even after affording sufficient time. In view of the same since the assessee has failed to furnish the details required, the cost of acquisition amounting ot Rs.1,41,45,894/- is hereby disallowed. 8. Aggrieved by the final assessment order, the assessee has filed the present appeal before the Tribunal. The assessee has filed a paper book comprising of 211 pages inter alia enclosing therein notices issued by the A.O., the replies filed by the assessee, the details of tax paid in USA ..... X X X X Extracts X X X X X X X X Extracts X X X X
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