Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH “D” BENCH NEW DELHI
Before: SHRI G.D. AGRAWAL & SHRI AMIT SHUKLA
ORDER PER AMIT SHUKLA, JUDICIAL MEMBER:
The aforesaid appeal has been filed by the assessee against impugned order dated 12.1.2012, passed by the Ld. CIT (Appeals)- XXV, New Delhi for the quantum of assessment passed u/s 143(3) for the A.Y. 2008-09. In the grounds of appeal the assessee has raised following grounds:- “1. That the Order is bad in law and in facts.
2. That in the facts and circumstances of the case the learned Assessing Officer grossly erred in determining/assessing Short Term Capital Gain of Rs. 5,44,566/- as income under the head Profit and Gains of' "the Business or Profession” and the learned Page 1 of 6 CIT (Appeals) has erred in upholding the said income as income from business or profession instead of income from short term capital gain.
3. That the observations of the learned Assessing Officer in the assessment order to the extent that the assessee’s representative agreed to the treatment of short term capital gain of Rs. 5,44,566/- as income from business or profession are based on some mistake of fact as the said representative never agreed to such treatment of declared short term capital gain. The learned CIT(Appeals) has erred in confirming the said observations of the learned Assessing Officer.
4. That the appellant purchased 500 shares of M/s ADANI Exports on 22/05/2007 for Rs. 120000/- through M/s India Bulls Securities Ltd. vide contract No. NSC/N/2007094/DEL- KB/761001 and again purchased 500 shares on 23/05/2007 for Rs. 119850/- through M/s India Bulls Securities Ltd. vide contract No. NSC/N/2007095/DEL-KB/765026. The said shares were transferred to the Demat A/c of the appellant. All these shares were sold on 31/10/2007 vide contract No. NSC/N/2007208/DEL-KB/2317113 and NSC /N/ 2007228/ DEL-KB/3909212 dated 28/11/2007 for Rs.7,84,415.70. These entries were also reflected in the Demat A/c of the appellant. The shares were purchased on 22/05/2007 and 23/05/2007 and sold on 31/10/2007 and 28/11/2007. The appellant held the shares for less than a year through Demat A/c and profit earned is a short term capital gain and not Income from Business and Profession. The learned authorities below have, as such, erred in holding the income in the nature of short term capital gain as Income from Business and Profession.
5. That the learned Assessing Officer has wrongly charged interest u/s 234(B).
6. That the learned Assessing Officer is also wrong in initiating the penalty proceedings u/s 271(1)(c) of the Income Tax Act.
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.
2. That I signed the order-sheet dated 08-12-2010 in routine, written by the learned assessing authority by his own hand without going through the contents & noting in the said order- sheet. As a matter of fact I never agreed mentally with learned assessing authority to treat the short term capital gain of Rs. 5,44,566/- declared in the relevant income tax return as regular profit on sale & purchase of shares.”
He further submitted that the shares of Adani Exports the shares were held for 5 to 6 months and was purely for the purpose of investment, therefore, the same could not be taxed under the head of business income.
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.
Order pronounced in the open court on 01.08.2017.