PRASHANT DEVENDRA MEHTA,HYDERABAD vs. ITO., WARD-10(1), HYDERABAD

Appellant may, add or alter or amend or modify or substitute or delete and/or rescind all or any of the grounds of appeal at any time before or at the time of hearing of the appeal..”

The brief facts of the case are that, the assessee is an individual and has filed his return of income for A.Y. 2007-08 on 10.10.2007, declaring total income of Rs. 10,53,289/-. The return of income filed by the assessee has been processed by the A.O./CPC, and intimation under Section 143(1) of the Income-tax Act, 1961 (for short “the Act”) was issued and raised a demand of Rs. 4,52,860/-.

Aggrieved with such intimation, assessee preferred appeal before the Ld. CIT(A).

Before the Ld. CIT(A), the assessee raised various grounds, including, denial of exemption under Section 10(38) of the Income- tax Act in respect of Long Term Capital Gain reported at Rs. 7,24,654/-. The Ld. CIT(A), after considering the submissions of the assessee and also taking note of the fact that, the A.O./CPC has not made any adjustment in respect of total income, rejected the arguments of the assessee in respect of exemption claimed under Section 10(38) of the Act for Long Term Capital Gain of Rs. 7,24,654/- on the ground that, the assessee failed to furnish relevant details, including Securities Transaction Tax (STT) paid on sale of shares, which resulted in Long Term Capital Gain for the year under consideration.

Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal.

The learned Senior A.R for the Revenue Ms. B. Malathi, on the other hand, supporting the order of the Ld. CIT(A), submitted that, the assessee has failed to file any evidences to prove exemption claimed under Section 10(38) of the Act in respect of Long Term Capital Gain reported for the year under consideration, and in the absence of relevant details, the A.O./CPC has rightly denied the benefit of exemption under Section 10(38) of the Act. The Ld. CIT(A), after considering the relevant facts, has rightly sustained the additions made by the A.O./CPC. Therefore, she submitted that, the additions made by the A.O./CPC should be upheld.

We have heard both parties, perused the material available on record, and had gone through the orders of the authorities below. The assessee has reported Long Term Capital Gain derived from sale of shares and claimed exemption under Section 10(38) of the Act, for the assessment year under consideration and also for A.Y. 2008-09. The A.O./CPC processed the return of income filed by the assessee and determined tax payable at Rs. 4,52,860/- by denying exemption claimed under Section 10(38) of the Act, in respect of Long Term Capital Gain derived from sale of shares. The learned counsel for the assessee argued that, the assessee has reported Long Term Capital Gain derived from sale of shares for both the assessment years and in both the assessment years, the A.O./CPC denied the exemption and determined the tax payable. Further, on appeal, the Ld. CIT(A) has considered the issue for A.Y. 2008-09 and has remanded the issue back to the file of the A.O./CPC for verification. In consequential assessment proceedings, the A.O./CPC accepted the claim of the assessee in respect of exemption claimed under Long Term Capital Gain, and to this extent, the assessee does not have any grievance for A.Y. 2008-09.

Insofar as A.Y. 2007-08 is concerned, although facts are identical and the issue is common, but the Ld. CIT(A) rejected the claim of the assessee towards exemption claimed under Section 10(38) of the Act, even though the facts are identical and the argument of the assessee is also on identical set of facts. We find that, for both assessment years, the assessee has reported Long Term Capital Gain from sale of shares and claimed exemption under Section 10(38) of the Act. For the assessment year under consideration, the Ld. CIT(A) upheld the reasons given by the A.O./CPC on the ground that, the assessee has failed to furnish relevant evidences, including details of STT paid on sale of shares to claim the benefit of exemption under Section 10(38) of the Act. Except this observation, the Ld. CIT(A) has not disputed the claim of the assessee with regard to exemption claimed under Section 10(38) of the Act. Since the Ld. CIT(A) has considered the very same issue for A.Y. 2008-09 and has remanded the issue back to the file of the A.O./CPC, and further, in the consequential assessment proceedings, the A.O./CPC has accepted the claim of Long Term Capital Gain declared by the assessee under Section 10(38) of the Act, in our considered view, for this year also, the issue needs to be set aside to the file of the A.O./CPC for verification. Thus, we set aside the order of Ld. CIT(A) and remand the issue back to the file of the A.O./CPC. The A.O./CPC is directed to verify the claim of the assessee in respect of exemption claimed under Section 10(38) of the Act towards Long Term Capital Gain derived from sale of shares in light of any evidence that may be filed by the assessee, including the details of STT paid on sale of shares, which is an essential condition for claiming the exemption under Section 10(38) of the Act to prove his case. The A.O./CPC is directed to verify the claim and allow the relief as per law.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

In this case, the assessee has challenged the order passed by the Ld. CIT(A) upholding the tax demand raised by the A.O. by rejecting the exemption claimed under Section 10(38) of the Act, in respect of Long Term Capital Gain derived from sale of shares.

The learned counsel for the assessee submitted that, the assessee does not have any grievance for the year under consideration because, in the consequential assessment proceedings, as per the directions of the Ld. CIT(A), the A.O. has allowed the relief in respect of exemption claimed under Section 10(38) of the Act in respect of Long Term Capital Gain and thus, the appeal filed by the assessee may be dismissed as ‘infructuous’.

The learned Sr.A.R. for the Revenue, on the other hand, fairly agreed that, the appeal filed by the assessee may be dismissed as ‘infructuous’, because the assessee does not have any grievance in respect of issues challenged in the appeal.

Having heard both sides and considered the relevant arguments of the learned counsel for the assessee and also the Sr. A.R. for the Revenue, and further, by considering the evidence filed by the assessee in the form of consequential order dated 23.06.2025 passed by the A.O. to give effect to the order of the Ld. CIT(A), we find that, the issue involved in the present appeal has been resolved by the A.O. himself by accepting the claim of the assessee towards exemption claimed under Section 10(38) of the appeal filed before the Tribunal. Since the issue raised in the appeal is resolved at the level of the A.O. himself, in our considered view, the present appeal filed by the assessee becomes ‘infructuous’. Thus, the appeal filed by the assessee is dismissed as ‘infructuous’.

In the result, the appeal filed by the assessee is dismissed as ‘infructuous’.

To sum up, the appeal filed by the assessee for A.Y. 2007-08 is allowed for statistical purposes and the appeal filed by the assessee for A.Y. 2008-09 is dismissed as ‘infructuous’.