ASSISTANT COMMISSIONER OF INCOME TAX vs. SMT SHEETAL GUPTA

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TAXC/54/2008HC ChhattisgarhCGHC01011183200831 December 2013Bench: HON'BLE THE CHIEF JUSTICE,HON'BLE SHRI JUSTICE MANINDRA MOHAN SHRIVASTAVA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Tribunal committed no illegality in setting aside the order of the CIT. The Court considered that the Assessees had submitted all required documents, including those pertaining to the purchase and sale of shares. Furthermore, the report of the Additional Director of Income Tax (Investigation), Kolkata, was neither placed on the record nor before the High Court, and the portion quoted in the Tribunal's order was of a general nature. There was also nothing on record to suggest that Herald Commercial Pvt. Ltd. was not a registered company or that the shares were not traded through a registered stock exchange. Therefore, the appeals filed by the Department lacked merit and were dismissed.

What were the facts?

The Income Tax Department (Appellant) filed appeals against the Income Tax Appellate Tribunal's (Tribunal) order dated May 21, 2008. The Tribunal had allowed the appeals of Smt. Jyoti Gupta and Smt. Sheetal Gupta (Assessees) and set aside the order passed by the Commissioner of Income Tax (CIT) under Section 263 of the Income Tax Act, 1961. The Assessees had filed their returns for Assessment Year 2003-04, showing long-term capital gains (LTCG). The Assessing Officer (AO) accepted these gains. However, the CIT, by an order dated November 14, 2007, set aside the AO's order and remanded the case for re-assessment after considering a report from the Additional Director of Income Tax (Investigation), Kolkata, which was received after the AO's order.

What were the issues?

The Tribunal had to decide whether it was legally correct in quashing the CIT's order under Section 263. The specific question admitted for consideration was: Whether the Income Tax Appellate Tribunal is legally correct in quashing the CIT's appeal under Section 263 on the ground that there is no specific finding in the order that the purchase and sale of shares and resultant long term capital gain (LTCG) shown by the assessee are bogus or manipulated, particularly when the inquiry report regarding the nature of the LTCG was not considered at the time of assessment and when the same was available in the record at the time of action u/s. 263? The Assessee's contention, as inferred from the Tribunal's reasoning, was that the CIT's order under Section 263 was not sustainable because the AO's order did not contain a specific finding that the LTCG was bogus or manipulated, and the ADIT's report was not considered during the assessment. The Revenue's contention, as inferred from the admitted question, was that the CIT's action under Section 263 was justified because the ADIT's inquiry report, which indicated potential issues with the LTCG, was available in the record at the time of the Section 263 proceedings, even if not considered by the AO during the initial assessment.

Which sections of the Income-tax Act were involved?

Section 263,Section 260A

AI-generated summary — verify with the full judgment below

HfpSili! BEFORE THE HON'BLE HIGH COURT O^CHHATTISGARH AT BILASPUR Tax Case (Income Tax Appeal) No. /2008 AB&ellant c~^^ ..-.a^i\.fs'y^^ ^:;;:^"-"" '""ResBondent .Assistant Commissidner of i '"^lncome Tax 1(1), Raipur(C,G.) i. i VERSUS ' ^ Smt. Sheetal Gupta, ' 3/o. M/s. Sunita Global Ltd. H.No. 510, Opp. Rajkumar College, G.E[ Road, Raipur i INCOME TAX APPEAL U/S. 260 A OF INCOME TAX ACT. 1961. -ThLc_anon.aI _Lc_aaau-uELtba nrdcu-flotarl '71 nc; •'inns nic-on/4 l->iLtlif» -___ iS£

HIGH COURT OF CHHATTISGARH AT BILASPUR CORAM: HON'BLE SHRI YATINDRA SINGH, C.J. HON'BLE SHRI MANINDRA MOHAN SHRIVASTAVA, J. Appellant Respondent Appellant Tax Case (Income Tax Appeal)- 53 of 2008 Assistant Commissioner of Income Tax (1) Raipur (C.G.) VERSUS Smt Jyoti Gupta Tax Case (Income Tax Appeal)- 54 of 2008 Assistant Commissioner of Income Tax (1) Raipur (C.G.) VERSUS Respondent : Smt Sheetal Gupta Income Tax Appeals u/s 260A of the Income Tax Act. 1961 Appearance: Shri Anand Dadariya, counsel for the Appellant. ORDER (01st January, 2014) 1. These appeals are flled by the Income Tax Department (the Department) against the order of the Income Tax Appellate Tribunal, Nagpur Bench, Nagpur, (the Tribunal) dated 21.05.2008 allowing the appeals of Smt Jyoti Gupta (ITA 462/Nag/2007) and of Smt Sheetal Gupta (ITA 464/Nag/2007) (the Assessees) and setting aside the order passed by the Commissioner of Income Tax, Raipur (the CIT) under section 263 of the Income Tax Act, 1961 (the Act) in respect of the Assessment Year 2003-04(the AY). THE FACTS 2. The Assessees filed separate returns on 28.11.2003. In their return, Smt. Jyoti Gupta showed the long term capital gains (LTCG) of ^39,55,200/-; whereas, Smt. Sheetal Gupta showed LTCG of ^39,57,750/-. 3. The Assessing Officer (the AO) by order dated 20.03.2006 accepted LTCG of the Assessees.

'^1 g 1 •%. ^,,^. ^..ss^ ''-'Sia^g^ 4. It appears that the AO had also sent a query to the Additional Director of Income Tax (Investigation), Kolkata (the ADIT) regarding investigation of LTCG. His report was received on 30.03.2006, that is to say, ten days after the AO passed the order. 5. The CIT passed an order under section 263 of the Act on 14.11.2007 setting aside the order of the AO dated 20.03.2006 and remanded fhe case back for re-assessment after considering the report of the ADIT. 6. Aggrieved by the aforesaid order, the Assessees filed appeals before the Tribunal. These appeals have been allowed by the Tribunal on 21.05.2008. Hence, the present appeals by the Department. THE DECISION 7. We have heard counsel for the Appellant. 8. These appeals were admitted on 17.06.2010 and 20.04.2010. However, they were admitted only on the following question: 'Whether the Income Tax Appellate Tribunal is legally correct in quashing the CIT's appeal under Section 263 on the ground that there is no specific finding in the order that the purchase and sale of shares and resultant long term capital gain (LTCG) shown by the assessee are bogusor manipulated, particularly when the inquiry report regarding the nature of the LTCG was not considered at the time of assessment and when the same was available in the record at the time of action u/s. 263?' 9. Considering that— • The Assessees had submitted all documents required from them including purchase and sale of the shares; • The report of the ADIT was neither placed on record nor placed before us. The portion quoted in the order is of general nature;

-%,sy '-..-i^W^ • There is nothing on the record to show that Herald Commercial Pvt. Ltd. Is not a registered company or shares were not traded through registered stock exchange— The Tribunal committed no illegality in setting aside the order of the CIT. 10. The tax cases have no merit. They are dismissed. ^-rfh'1^3? Sd/- Chief Justice Sd/- ManindraMobanShrivastava Judge subbu

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