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Income Tax Appellate Tribunal, ‘SMC’ ‘C’ BENCH, CHENNAI
Before: Shri A. Mohan Alankamony
आदेश / O R D E R
This appeal by the assessee is directed against the order passed by the Ld. Commissioner of Income Tax (Appeals)-16, Chennai dated 25.11.2016 in IT Appeal No.28/CIT(A)-16/2012-13 for the assessment year 2012-13 passed U/s.250(6) r.w.s. 14(3) of the Act.
The assessee had raised several grounds in his appeal, however the crux of the issue is that the Ld.CIT(A) has erred in confirming the addition made by the Ld.AO for Rs.2,82,596/- and Rs.5,29,761/- under the head unexplained investment invoking the provisions of Section 69 of the Act.
The brief facts of the case are that the assessee is a non- resident filed his return of income on 31.07.2012 admitting total income of Rs.24,56,608/-. Subsequently the assessee filed revised return on 11.03.2014 stating his income to be Rs.90,576/-. Thereafter the case was selected for scrutiny under CASS. From the AIR information available with the department it was found that the assessee had invested in shares / derivatives for Rs.2,82,596/- and Rs.5,29,761/- respectively on 17.02.2012. The assessee was asked to submit the details of those investments along with the source for making such investments. However the Ld.A.R., of the assessee had submitted before the Ld.A.O., that the assessee had not invested in any shares or derivatives during the relevant assessment year. In order to verify the claim of the assessee the Ld.AO wrote a letter to Mumbai Stock Exchange. The Mumbai Stock Exchange vide their letter confirmed the transaction by stating that the assessee had purchased Petronet LNG on 17.02.2012 for Rs.2,82,596/- and on the same day purchased shares of State Bank for Rs.5,29,761/-. Since the assessee had not explained the source for these investments, the Ld.AO added Rs.8,12,357/- (Rs.2,82,596 + Rs.5,29,761/-) to the income of the assessee under the head unexplained investments invoking provisions of Section 69 of the Act.
On appeal the Ld.CIT(A) confirmed the order of the Ld.AO by observing as under:
“I have carefully considered the appellant rebuttal on remand report supra. Reliance manger who handles the portfolio of the assessee has stated as under "that we have varified our records and have found that the PAN NO for the client code CJPI075 has been uploaded incorrect erroneously in BSE UCC. The same will be varified our ends with in 3 days. As per record this transaction on appellant PAN took place as back as on 17.02.2012 if this have been a fact than appellant would have been in position to prove her point by now. The fact remains that share transactions have taken place on using assessee's PAN NO. Given the opportunity to the assessee to prove her contentions during remand report proceedings under rule 46A of the income tax rule 1962 the appellant could not prove her point before the AO . Accordingly relying on remand report, the AO coming to a conclusion that there was no conclusive proof I upheld the action of the AO that in response AO's office letter dated 2.3.20015 reply was received from Bombay stock exchange confirming that the following transactions were done by the assessee. Sr.No. Transaction Amt Transaction Date Purchase Transaction Details 1 Rs.2,82,596/- 17.02.2012 PETRONET LNG 2 Rs.5,29,761/- 17.02.2012 State Bank Rs.8,12,357 Total
In view of the above, having Bombay stock exchange Mumbai has confirmed that on the PAN of the assessee following transactions has taken place is remains the fact. Moreover the assessee has not explained the nature and source of the investment made the amount of Rs.8, 12,357/ - has rightly been added to the total income of the assessee as unexplained investments u/s 69 of the act. The appellant do not succeed in appeal, therefore the appeal of the assessee on this ground is accordingly dismissed.”
The Ld.AR filed a paper book containing 23 pages before us which included in page No.15 of the paper book a letter from Reliance securities Limited dated 19th Aug 2016 addressed to the appellant confirming that there was no transaction in the name of the assessee with respect to purchase of shares / derivatives from Bombay Stock Exchange. He therefore argued stating that the addition made by the Ld.AO may be deleted. The Ld.DR on the other hand relied on the orders of the Revenue authorities, however could not controvert to the submission of the Ld.AR.
I have heard the rival submissions and carefully perused the materials on record. From the letter received from Reliance Securities Limited dated 19.08.2016, it is evident that the assessee has not made any transaction in Bombay Stock Exchange with respect to purchase of shares / derivatives. The Ld.DR could also not furnished any materials before us to justify the orders of the Ld.AO or the Ld.CIT(A). Further at Page No.6 of the paper book, the Ld.AR has placed on record the email communication from Ms. Deepa Rangarajan, Associate Manager, Investor Services Regional Centre, BSE Limited stating that in the case of the assessee Mr. Mohamed Meera Ziaudeen -- “as discussed, we wish to inform you that we have verified our records and have found that PAN number for the client code CJP1075 has been uploaded incorrect erroneously in BSE UCC. The same will be rectified from our end within 3 days.” From the above, it is abundantly clear that the assessee has not made any investment in any shares or derivatives aggregating to Rs.8,12,357/- as held by the Ld.AO which was further upheld by the Ld.CIT(A). It appears that there is gross negligence on the part of the Ld. Revenue authorities to have held that the assessee had invested in shares and derivatives aggregating to Rs.8,12,357/-. This erroneous finding of the Ld. Revenue Authorities has put the assessee into unnecessary hardships and mental strain, which could have been avoided. Considering the facts and circumstance of the case, I hereby direct the Ld.AO to delete the addition of Rs.8,12,357/- made in the hands of the assessee under the head unexplained investments invoking the provisions of Section 69 of the Act.
In the result, the appeal of the assessee is allowed.
Order pronounced on the 29th March, 2017.