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TMI Blog2023 (10) TMI 1351X X X X Extracts X X X X X X X X Extracts X X X X ..... prayer to answer the substantial questions no.(A) and (B), as formulated in para-9 of the memo of appeal. 2. Since both the appeals involve identical issue, they are taken up together for hearing and disposed of by this common judgment. 3. For the sake of convenience and better appreciation, the factual matrix, as delineated in ITA No.84 of 2022, has been succinctly referred to. 3.1. Respondent, being an assessee, filed her return of income by e-mode for the assessment year 2013-14 on 24.03.2015 showing total income of Rs.6,14,950/- in the status of individual. She disclosed to have derived income from partnership firm, house property and income from other sources. She claimed exemption under Section 10 (38) on Long Term Capital Gain (LTCG), arising out of sale shares of CCL International Limited amounting to Rs.1,56,09,716/-. Consequentially, the case was selected for scrutiny through CASS (Computer-Assisted Scrutiny Selection) and, thereafter, notice under Section 143 (2) of the Income Tax Act, 1961 was issued to the responden-tassessee on 18.09.2015 fixing compliance by 28.09.2015. But, no compliance was made by the respondent-assessee by that date. 3.2. Later, the case was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al income of Rs.1,67,24,670/- and penal notice was issued to the respondent-assessee. The respondent-assessee preferred first appeal before the First Appellate Authority by filing I.T. Appeal No.0018/2016-17 and finally the First Appellate Authority, on 28.03.2019, came to a definite finding that the Assessing Officer was not justified in rejecting the claim of exemption under Section 10 (38) in respect of LTCG arising on the sale of shares of M/s CCL International Ltd. The consideration received by the respondent-assessee was out of the sale of shares effected on a recognized Stock Exchange. The shares had been held for a period of more than twelve months and Securities Transaction Tax (STT) had been paid at the time of transfer. Hence, the amount received by the respondent-assessee, is undeniably in the nature of Long Terms Capital Gain (LTCG). The Assessing Officer's action was based entirely on surmise and suspicions and at the same time the Assessing Officer was unable to rebut the concrete evidence tendered by the respondent-assessee in support of her claim. Thereby, addition of Rs.1,61,09,716/- made by the Assessing Officer is hereby deleted and the respondent-assessee's app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under Section 260A of the Income Tax Act, 1961 read with Rules framed thereunder taking a specific plea that the respondent-assessee in her return of income tax for the assessment year 2013-14 derived income as a partner from partnership firm of M/s Nilachal Textwaste Industries, income from business, salary and other sources, capital gains and dividend. As such, a survey under Section 113A of the Income Tax Act, 1961 was conducted on 20.08.2015 by the Investigation Wing of the IT Department on the partnership firm of the respondent-assessee M/s Nilachal Textwaste Industries and Group. At the time of survey, it was found that the assessee had booked a bogus capital gain of Rs.1,56,09,716/- out of the sale of shares of M/s CCL International Ltd. and the transaction was merely an accommodation entry taken by the respondent-assessee to disguise her unaccounted income in the garb of Long Term Capital Gain. During the course of survey under Section 133A of the Income Tax Act, 1961, statement under oath of Sri Radheshyam Singhania, husband of the respondent-assessee was recorded, wherein he stated that Rs.1,56,09,716/- in the name of Smt. Bimala Devi as long term capital gains arising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended that the main dispute is with regard disallowance of Long Term Capital Gain (LTCG) claimed under Section 10 (38) of the Income Tax Act, 1961 in passing the order of assessment under Section 143 (3) of the Income Tax Act, 1961 by the Assessing Officer on 23.03.2016 and treating the same as income from other source under Section 56 of the Income Tax Act, 1961 on the basis of a statement recorded during survey made under Section 133A of the Income Tax Act, 1961 without any adverse materials/evidence against the respondent-assessee. But, the learned CIT (A), after verification of the documents and confrontation of the matter, allowed the claim under Section 10 (38) of the Income Tax Act, 1961. It is further contended that the revenue authority went on Second Appeal before the Income Tax Appellate Tribunal and in turn the Tribunal, being the last fact finding authority, after verification of the documents/evidence filed in paper book, affirmed the order of the 1st Appellate Authority and dismissed the appeal preferred by the Department in absence of any incriminating evidence against the respondent-assessee. It is further contended that it is the bounden duty of the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness trust] where- (a) the transaction of sale of such equity share or unit is entered into on or after the date on which Chapter VII of the Finance (No.2) Act, 2004 comes into force; and (b) such transaction is chargeable to securities transaction tax under that Chapter; [Provided that the income by way of long term capital gain of a company shall be taken into account in computing the book profit and income tax payable under section 115 JB;] [Provided also that nothing contained in sub-clause(b) shall apply to a transaction undertaken on a recognized stock exchange located in any International Financial Services Centre and where the consideration for such transaction is paid or payable in foreign currency;] [Provided also that nothing contained in this clause shall apply to any income arising from the transfer of a long term capital asset, being an equity share in a company, if the transaction of acquisition, other than the acquisition notified by the Central Government in this behalf, of such equity share is entered into on or after the 1st day of October, 2004 and such transaction is not chargeable to securities transaction tax under Chapter VII of the Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, were essentially in the realm of appreciation of evidence and, as such, no substantial question of law is involved. 10. In Vijaya Kumar Talwar (supra), it has been held that in absence of demonstrated perversity in the finding of the Tribunal, interference cannot be warranted, when on thorough consideration of the material on record it was found that the transaction of purchase and sale of shares could not be treated as non-genuine. 11. In Khader Khan Son (supra), the apex Court held that statement recorded during survey under Section 133A of the Income Tax Act, 1961 has no evidentiary value, as it does not empower any Income Tax Officer to examine on oath, as the assessment has to be made on the basis of materials and documentary evidence and not on a bare statement. Therefore, the substantial questions of law, as formulated, have no legs to stand. 12. It is worthwhile to mention here that, the Security Transaction Tax (STT) under Chapter-VII of Finance (No.2) Act, 2004 is a direct tax levied by Government of India on every purchase and sale of securities that are listed on the recognized stock exchanges in India. The STT was implemented to curb the tax avoidance on capital ..... X X X X Extracts X X X X X X X X Extracts X X X X
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