LAKSHIT BANSAL,VAPI vs. INCOME TAX OFFICER, WARD-5, VAPI

On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming the addition of Rs.50,96,049/-made by the AO as LTCG from the sale of shares of Ultra Tech Cements Ltd. without recalculating STCL by making corresponding reduction of Rs. 50,96,049/-, which the appellant has already included in the STCL of Rs. 12,00,06,675/- shown in the ROI filed. 3. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 3. The assessee filed return of income for AY 2023-24 u/s 139(1) of the Income Tax Act, 1961 (in short “the Act”) on 23.10.2023 declaring total income of Rs.6,59,39,830/-. The case of the assessee was selected for scrutiny for the issues of large capital gain set off with large capital loss (Business ITR) and the assessee has given large amount of loans as per Form 3CD of debtors in comparison to gross total income shown in the ITR and the genuineness of loan transaction as well as source of loans were supposed to be verified. During the assessment proceedings, the assessee filed submissions thereby stating that the assessee was a partner in four firms namely; RBPT Infotech LLP, Vibrant Polyplast LLP, RLB Media Solutions LLP and Visco Tubes. The assessee earned share of profit from the above firms and further is having sources of income such as capital gain from share transactions and interest income from savings account, fixed deposits and interest income against loans and advances. Since the assessee was not having business in individual capacity, the assessee did not file audit report as per provisions of section 44AB of the Act. The Assessing Officer (in short “the AO”) observed that the assessee earned Long Term Capital Gains (in short “LTCG”) observed that the assessee earned LTCG of Rs.1,77,93,946/- and incurred Short Term Capital Loss (in short “STCL”) of Rs.12,00,06,675/-, an amount of Rs.1,77,93,946/- was set off against the capital gain as per sub clause (a) of sub section (i) of section 74 and carry forwarded the remaining STCL of Rs.10,22,12,729/- for subsequent assessment years. The assessee has submitted the LTCG computation sheet and STCL computation loss which is reproduced at page 7 of the assessment order. The AO observed that there was no details of equity/scrip portfolio-wise transactions with regard to STCL claimed by the assessee. The assessee provided the Client Global Net Position statement from the broker along with the documentary evidences such as purchases made by assessee’s mother with regard to gifted stocks and also furnished the reconciliation between Client Global Net Position statement and capital gains computation furnished along with ITR. This is reproduced at page 8 of the assessment order including that of Ultratech Chemco details. After taking cognizance of the reconciliation, the AO made addition of Rs.50,96,049/- as variation proposed by making addition under the head “Capital Gains” for which the calculation/the observation is provided at page 15 of the assessment order. The AO held that as per the profit & loss (summary) statement submitted by broker M/s. Master Capital Services Ltd., the assessee has sold Ultra Tech Cement shares on 05.05.2022 i.e. during AY 2023-24 which were received through gift deeds from his mother (doner) on 27.04.2021, the same were acquired by the doner on 19.11.2020 through demerger having purchased cost as Nil. Therefore, the assessee earned LTCG of Rs.50,96,049/- (purchase cost at Nil and sale consideration at Rs.51,01,645/-, other charges including STT of Rs.5.596/-), but the assessee failed to report the same in ITR and hence made addition.