KETAN DINESHCHANDRA MEHTA,CHENNAI vs. ITONCR 11(3), CHENNAI

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ITA 2318/CHNY/2018Status: DisposedITAT Chennai02 January 2019AY 2014-154 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the Assessing Officer should have provided the investigation report and other relied-upon material to the assessee. Since this was not done, the orders of the lower authorities were set aside.

What were the facts?

The assessee claimed exemption under Section 10(38) on long-term capital gains from selling shares. The Assessing Officer denied this exemption and made an addition under Section 68, relying on an investigation report from Kolkata. The assessee argued that the report was not provided.

What were the issues?

Whether the denial of exemption under Section 10(38) and addition under Section 68 was valid without furnishing the investigation report to the assessee. Whether the matter should be remitted back to the Assessing Officer for fresh adjudication.

Which sections of the Income-tax Act were involved?

Section 10(38),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI ABRAHAM P. GEORGE

For Appellant: Shri K. Balasubramanian, Advocate
For Respondent: Shri V.M. Mahidar, JCIT
Hearing: 20.12.2018Pronounced: 02.01.2019

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

1.

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) -13, Chennai, dated 26.06.2018 and pertains to assessment year 2014-15.

2.

Shri K. Balasubramanian, the Ld.counsel for the assessee, submitted that the Assessing Officer, placing reliance on the report received from the Investigation Wing of the Department at Kolkata, denied exemption under Section 10(38) of the Income-tax Act, 1961 (in short 'the Act') and made addition under Section 68 of the Act. According to the Ld. counsel, the assessee has purchased 3000 shares of Blazon Marbles Limited for ₹5,250/-. The assessee sold the same on 21.03.2014 and 26.03.2014 for a total consideration of ₹6,74,058.1. According to the Ld. counsel, the assessee declared long term capital gains of ₹6,65,797/- and claimed exemption under Section 10(38) of the Act. The Assessing Officer, however, disallowed the claim of the assessee based upon the investigation report said to be received from the Investigation Wing of the Department at Kolkata. The Ld.counsel further submitted that the Assessing Officer has not furnished copies of investigation report to the assessee, therefore, the matter may be remitted back to the file of the Assessing Officer.

3.

We heard Shri V.M. Mahidar, the Ld. Departmental Representative also. Admittedly, the Assessing Officer and the CIT(Appeals) placed reliance on the investigation report said to be received from the Investigation Wing of the Department at Kolkata. The copy of the said report was not furnished to the assessee. The proceeding before the Assessing Officer being a judicial proceeding, the Assessing Officer is expected to furnish all the material relied upon by him to the assessee. Unfortunately, such an exercise was not done by the Assessing Officer. Therefore, the orders of both the authorities below are set aside and the matter is remitted back to the file of the Assessing Officer. The Assessing Officer is directed to furnish copies of the report of Investigation Wing of the Department at Kolkata and other material relied upon by him and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.

4.

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

Order pronounced in the court on 2nd January, 2019 at Chennai.

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