KAUSHAL KUMAR AGGARWAL,DELHI vs. ACIT, NEW DELHI

The brief facts qua the issue involved are that the assessee had declared short term capital gain of Rs. 5,44,566/- on sale of shares of ‘ADANI Exports’. The Assessing Officer noted that on sale of other shares assessee has declared gain and loss under the head business and profession. As noted by the Assessing Officer, in response to the order sheet entry dated 8.10.2010 as to why the short term capital gain claimed on sale of shares of ADANI Exports should not be treated as business income, the authorized representatives of the assessee agreed that it should be taxed as business income and it was by mistake declared as short term capital gain. Accordingly, the Assessing Officer treated the income under the head STCG on shares of ADANI Exports as income chargeable to tax under the head of “Profit and gains of business and profession”. The Learned CIT (Appeals) too had confirmed the said order of the Assessing Officer on the ground that the assessee has not been consistent in the treatment of shares transaction, even though he was involved in regular purchase and sale of shares.

Before us the ld. counsel for the assessee submitted that the authorized representative who had represented before the Assessing Officer did not intentionally gave any concession that the income from sale of shares is to be taxed under the head of business income and not under the head of short term gain. In support of this contention, an affidavit of Shri M.N. Bansal, Chartered Accountant, who had appeared before the Assessing Authority has deposed as under:- “I M.L. Bansal, Chartered Accountant S/o Sh. D.R. Bansal, R/o 37F, Kamla Nagar, Delhi- 110007, do hereby state on solemn affirmation as under:- Page 3 of 6

That during the assessment proceedings for the assessment year 2008-09, I appeared before the concerned learned assessing officer on 08-12-2010 which was the last date of hearing before him and the case was finally discussed on that date.

On the other hand, the ld. DR relying upon the order of the Learned CIT (Appeals) submitted that, once the AR has himself admitted that the profits/gain from sale is to be taxed under the head of business income, then there was no occasion to the Assessing Officer to examine the facts properly and decide on merits especially the contention of the assessee which has been raised now. Thus, the plea taken by the assessee before this Tribunal cannot be entertained.

After considering the rival submissions and on perusal of the materials placed on record and the assessment order it is seen that the assessee through his authorized representatives has conceded that the profit and gains from sale of shares is to be taxed under the head business income instead of short term gain as shown in the Page 4 of 6 return of income and such a disclosure in the return of income was stated to be by mistake. Now, at this stage, an affidavit authorized representatives, C.A. Shri M.L. Bansal, has been filed deposing that he signed the order sheet entry in the routine manner. Though, this is completely a lame explanation, however, we feel that in the interest of justice, this matter should be remanded back to the file of the Assessing Officer who shall examine all the relevant factors of judging the transaction of purchase and sale of shares, whether it is to be taxed under the head short term capital gain or business income, because due to concession/conceding the matter by the AR at the time of assessment, this matter could not be examined on merits. Therefore, we direct the Assessing Officer to examine this issue on merits and decide in accordance with law after giving due opportunity to the assessee to explain his case.

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