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Facts
The assessee claimed exemption for long-term capital gains from the sale of shares under Section 10(38) of the Income Tax Act. The AO rejected the claim based on an investigation report, stating the assessee failed to provide evidence of genuine transactions, spot delivery contract notes, or proof of transfer. The CIT(A) upheld the AO's order.
Held
The Tribunal found that while the assessee failed to submit all required documents before the AO and CIT(A), documents were submitted before the Tribunal. The Tribunal deemed it appropriate to remit the matter back to the CIT(A) to provide the assessee with a reasonable opportunity of being heard.
Key Issues
Whether the assessee provided sufficient evidence for exemption of long-term capital gains, and if the appellate authorities provided a proper opportunity for hearing and consideration of documents.
Sections Cited
10(38), 143(3), 250
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Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI
Before: SHRI AMARJIT SINGH & SHRI ANIKESH BANERJEE
Both the appeals of the assessee were filed against the order of the National Faceless Appeal Centre, Delhi [for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), for Assessment Years 2014-15 and 2015-16 date of orders 28/02/2020 and 30/11/2023 respectively. Both the orders were emanated from the orders of the Ld. Income-tax Officer35(2)(4),Mumbai (in short, ‘the A.O.’) passed under section 143(3)of the
Both the appeals have same nature of facts and common issue.So,ITA No.4270/Mum/2023 is taken as lead case.
The brief facts of the case are that during the impugned assessment year, the assessee earned long term capital gains amount to Rs.1,00,88,773/- by sale of 1,25,000 shares of PS Global. The assessee has received the consideration of Rs.1,02,51,273/- but after deducting the cost of purchase amounting to Rs.1,62,500/-, the net amount was realized at Rs.1,00,88,773/-. The assessee claimed the exemption under section 10(38) of the Act. The return of the assessee is taken in scrutiny. Relied on the investigation report of the DDIT (Inv), the Ld.AO rejected the claim under section 10(38) of the Act and added back the entire gain with the total income of the assessee. The aggrieved assessee filed an appeal before the Ld. CIT(A) and the Ld.CIT(A) upheld the assessment order. Being aggrieved, the assessee filed the appeal before us.
The Ld.AR submitted a written submission from pages 1 to 42 which is kept in record. We find that during the assessment proceedings, the assessee was unable to submit the required documents before the Ld.AO. Accordingly, paragraph 12.3 of the assessment order is reproduced below:-
“12.3. The assessee said that transactions in these scrips are genuine. But the assessee could not explain why she had purchased the shares of unknown co M/s Rosetee Resorts Ltd & that also in the off-market transaction. She has also not submitted, prove genuineness, spot delivery contract notes, proof of physical transfer of shares, transfer deed.”
& 4471/Mum/2023 Nisha Suresh Maheshwari 5. The Ld.AR further proceeded to argue and stated that the appeal was passed exparte and the assessee was unable to submit the relevant documents before the Ld.CIT(A). The adjournment petition was duly filed but without considering the assessee’s prayer the order was passed exparte and rejected the appeal of the assessee.
The Ld.DR argued and fully relied on the order of the revenue authority.
We have heard the submissions of both parties and have carefully considered the documents available on record. Upon perusal of the impugned assessment order, we find that the documents pertaining to the spot delivery contract note, proof of physical transfer, and the date of transfer were not submitted before the Ld. AO. However, the Ld. AR contended that this assertion is incorrect and that all relevant documents were duly filed before the Ld. AO for consideration. Nevertheless, it is evident that the assessee failed to submit any of these documents before the Ld. CIT(A). Furthermore, although the documents were duly filed before the Bench, they were not adequately considered by the Ld. CIT(A) during the appeal proceedings. The documents submitted before the Bench are as follows:
S.No Particulars Page no 1 A copy of physical share certificate with details of the transfer of shares in the 3-34 appellate name 2 Copy of form of dematerialisation dated 27.01.2012 35-36 3 A copy of the Billing come holding statement for the period01/03/2012 to 37-42 31/03/2012 issued by Stock Holding Corporation of India Ltd. & 4471/Mum/2023 Nisha Suresh Maheshwari In view of the above, we deem it appropriate to remit the matter back to the file of the Ld. CIT(A) to provide the assessee with a reasonable opportunity of being heard. We refrain from expressing any opinion on the merits of the case, as doing so may prejudice the outcome of the set-aside appeal proceedings. It is imperative that the assessee be granted a fair opportunity to present its case before the Ld. CIT(A). At the same time, the assessee is expected to act diligently and cooperate during the set-aside appeal proceedings.
In the result, the appeal filed by the assessee bearing is allowed for statistical purpose.
In the result, appeals in & 4471/Mum/2023are allowed for statistical purpose.