SMT. VANITA TEKRIWAL,FLAT NO.715, SUN N MOON BELVEDERE PARK, SWAGE FARM CIRCLE, NEW SANGANER ROAD, JAIPUR vs. ITO, WARD-2(3), JAIPUR

1 ITA No.22/JP/2022 Smt. Vanita Tekriwal vs ITO, wed 2(3), Jaipur आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 22/JP/2022 fu/kZkj.k o"kZ@Assessment Year : 2014-15 cuke Smt. Vanita Tekriwal The ITO Vs. Flat No. 715, Sun N Moon Belvedere Park, Ward- 2(3) Swage Farm Circle, New Sanganer Road, Jaipur Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ACZP 7013 P vihykFkhZ@Appellant izR;FkhZ@Respondent

fu/kZkfjrh dh vksj ls@Assessee by : Shri P.C. Parwal, CA jktLo dh vksj ls@Revenue by: Smt. Runi Pal, Addl. CIT lquokbZ dh rkjh[k@Date of Hearing : 22/02/2022 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 08 /03/2022 vkns'k@ORDER

PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal by the assessee is directed against the order of the ld. CIT(A), Delhi -42 dated 07-01-2022 for the assessment year 2014-15. 2. The hearing of the appeal was concluded through video conference by both the parties in view of the prevailing situation of Covid-19 Pandemic. 3. The grounds of appeal raised by the assessee are as under:-

2 ITA No.22/JP/2022 Smt. Vanita Tekriwal vs ITO, wed 2(3), Jaipur

ld. CIT(A) are as under:- ‘’8. The appellant has raised some contentions which were made before the AO. The appellant has claimed that the data was not properly captured in the return and there were many inaccuracies in the return captured by the system. It is observed that the appellant had uploaded e-return on 26-07-2008 and it has been claimed that the same return was filed on 28-07-2008 with the AO. The AO has observed that the appellant had not filed all the paper including computation of income for the relevant year alongwith the return not filed physically / manually. As per Section 139C r.w. Rule 12 which came into force w.e.f. 01-06-2006, provided that the return of income should not be accompanied by any document or copy of a new account or form or audit report etc.,however, it was obligatory on the part of an to file copy of acknowledgement of e- return with the concerned AO. Thus no computation of income or any return of income claiming deduction u/s 54F had been filed in the eyes of law by the appellant on 28-07-2008.

3 ITA No.22/JP/2022 Smt. Vanita Tekriwal vs ITO, wed 2(3), Jaipur Ltd. on 27-03-2006 for Rs. 2,00,000/- at the rate of Rs.10/- per share and subsequent sale on 07-04-2007 for Rs. 4,00,000/- indicate that this was an accommodation entry taken by the appellant. Within a short span of holding for just one year (which was the time period to claim long term holding of shares) the shares of an unknown company had risen by 20 times.

authorities have erred in confirming the addition of Rs. 37,78,270/- and further submitted that

lower authorities have taxed the capital gain on account of sale of shares and resultantly the

capital gain which had arisen in A.Y. 2008-09 and deduction claimed u/s 54of the Act. Thus the

capital gain which relates to A.Y. 2008-09 cannot be taxed in A.Y. 2014-15 merely on the

technical reasons. To this effect, the ld.AR has submitted following written submission.

‘’1. From the facts stated above the two issues arising in the present appeal is whether the amount of Rs.37,78,270/- can be considered unexplained only because the system generated return for AY 2008-09 is not reflecting the long term capital gain and whether the amount from sale of shares on which the said gain is earned in AY 2008-09 can be treated as unexplained income for AY 2014-15.

4 ITA No.22/JP/2022 Smt. Vanita Tekriwal vs ITO, wed 2(3), Jaipur sale of shares and the exemption u/s 54F (PB 44). The assessee also filed the paper return along with the computation of total income on 28.07.2008 which also reflect the long term capital gain on sales of shares of RSBPL against which exemption u/s 54F of Rs.37,78,270/- is claimed (PB 4-6). In support of this fact the assessee has filed the affidavit (PB 59). However, inspite of all these facts available on record, the AO has solely relied on the system generated return which contains number of errors as pointed out vide letter dt. 18.11.2016 as under:- (a) Column of First Name is blank whereas First Name is shown in Last Name column and last name is shown in Middle Name column (PB 7). (b) Column of Phone No. is showing 2367434 instead of 2-293095 (PB 7). (c) In Part A-BS Point No. 3d(ii)(C), provision for leave encashment/superannuation/gratuity is showing Rs.9,188/- whereas it is zero (PB 8). (d) In Part A-BS Point No. 3d(ii)(E), total is shown at Rs.1,15,16,118/- whereas it should be Rs.9,188/- (PB 8). (e) In Schedule CG, column A3 is showing totally blank (PB 21) whereas it was filled as under:-

3 From other assets a Full value of consideration 3a 136946 b Deductions under section 48 i Cost of acquisition bi 124050 ii Cost of Improvement bii Nil iii Expenditure on transfer biii Nil iv Total (i+ii+iii) biv 124050 c Balance (3a-biv) 3c 12896 d Loss, if any, to be ignored under section 3d Nil 94(7) or 94(8) e Deduction under section 54B/54D 3e Nil f Short-term capital gain (3c+3d-3e) 3f 12896

However, this figure of Rs.12,896/- is shown in Part B-TI, column 4(a)(iii) (PB 14) and in Schedule CYLA, row no. (iv) (PB 22) which shows that data of Schedule CG of the return was not ported in the department software whereas it was filled by the assessee.

5 ITA No.22/JP/2022 Smt. Vanita Tekriwal vs ITO, wed 2(3), Jaipur

(f) In Schedule CG, column B3 is showing totally blank (PB 21) whereas it was filled as under:-

3 Other assets for which option under proviso to section 112(1) not exercised a Full value of consideration 3a 4000000 b Deductions under section 48 i Cost of acquisition after indexation bi 221730 ii Cost of Improvement after bii Nil indexation iii Expenditure on transfer biii Nil iv Total (bi+bii+biii) biv 221730 c Balance (3a-biv) 3c 3778270 d Exemption under sections 3d 3778270 54/54B/54D/54EC/54F/54G/54GA e Net balance (3c-3d) 3e Nil However, ‘0’ is shown in Part B-TI, column 4(b) (PB 14) and in Schedule CYLA, row no. (v) (PB 22) which shows that data of Schedule CG of the return was not ported in the department software whereas it was filled by the assessee.

(g) Apart from this there are other errors also as mentioned in Point No.7 to 11 of letter dt. 18.11.2016 (PB 56-57) From the above mistakes it can be noted that in the system generated return the various amounts/ details mentioned in the e-return uploaded through software in XML file is not properly captured. It may be noted that e-filing of the return was in the initial stage in AY 2008-09 and therefore, as the system has not stabilized properly such mistakes has occurred. The AO in Para 4(a) has accepted the fact that the assessee has filed the copy of acknowledgment of e-filed return but at the same time has not accepted the fact that all papers including computation of income was filed manually by referring to Rule 12 of the IT Rules according to which it was obligatory on the part of assessee to file copy of acknowledgment of e-return with the concerned AO but return is not to be accompanied with any document. The AO, however, ignored that the rule is for not filing any document along with the e-return filed on the system but the said rule nowhere debarred the assessee to file computation of total income along with the acknowledgment of e- return filed with the AO. In any case when the sale proceeds of shares and the investment u/s 54F are both evident from the bank statement of the assessee for the concerned year, the same cannot be treated as unexplained only because of alleged non-disclosure of the same in the return of income filed electronically.

6 ITA No.22/JP/2022 Smt. Vanita Tekriwal vs ITO, wed 2(3), Jaipur Hence, addition made by the AO and confirmed by Ld. CIT(A) by treating the amount of Rs.37,78,270/- as unexplained is unjustified and be deleted.

In view of above, addition of Rs.37,78,270/- confirmed by the Ld. CIT(A) be directed to be deleted.’’

The ld.AR of the assessee further argued that the print version of ITR generated from the system

perfectly shows the capital (APB 44) not only that deduction claimed u/s 54F of the Act is also

reflected. Thus, there is no fault. Not only that the transaction of capital gain and is subsequent

investment in A.Y. 2008-09 how can be taxed in A.Y. 2014-15 merely on the reasons that on line

transaction does not show capital gain. The ld.AR of the assessee has filed an affidavit dated 24-

10-2016 placed before the AO and the ld. CIT(A) wherein she has confirmed the fact on oath

about the capital gain and deduction claimed u/s 54F of the Act. She has further stated that she is

assessed to tax since 1998 and since then no such behavior is observed. Not only that the

transactions are duly supported by bills and routed through bank account which are already

disclosed in all the income tax returns

that capital gain is now escaped and is not reflected and captured. The assessee has claimed

capitalization in this year for the first time and source of capital gain income is also not checked

7 ITA No.22/JP/2022 Smt. Vanita Tekriwal vs ITO, wed 2(3), Jaipur and thus the action of taxing the credit in the year is based on finding and thus the ld. DR relied

on the assessment order finding.

7 We have heard the rival contentions and perused the materials available on record. Brief

facts of the case are that the assessee has income from salary, business, capital gains and income

from other sources. She filed the return on 09.07.2014 declaring total income of Rs.10,35,250/- .

The AO during the course of assessment proceeding observed that as per the return of income

for AY 2013-14 capital declared by the assessee was Rs.13,72,546/- whereas for AY 2014-15

capital declared is Rs.1,45,30,080/- and thus, there is an increase of Rs.1,31,57,534/-. For

increase in capital, the assessee vide letter dated 26.08.2016 explained that during the year she

has transferred loans & advances and the amount of advance tax/ TDS from personal balance

sheet to the business balance sheet to the extent of Rs.1,46,62,649/- which has resulted in

increase in the capital in the business balance sheet. The assessee further filed the copy of return

and computation of total income from AY 2007-08 to 2014-15 giving the details of gross total

income and exempted income aggregating to Rs.1,52,27,206/- (70,93,124+81,34,082) in support

of the capital introduced as business capital.

7.1 The AO, however, vide show cause notice dated 10.10.2016 observed that the system

generated return for AY 2008-09 is not showing any long term capital gain. In the return income

of Rs.6,36,857/- has been declared exempt but no income under the head capital gain has been

declared and therefore, the capital gain income claimed at Rs.37,78,270/- should be treated as

undisclosed income for the year under consideration. In response to the show cause notice assessee vide submission filed on 18.11.2016 (PB 7.2 54-58) made detailed explanation pointing out various mistakes in the system generated return

and explained that in the e-return filed by the assessee on 26.07.2008, she has duly declared the

8 ITA No.22/JP/2022 Smt. Vanita Tekriwal vs ITO, wed 2(3), Jaipur long term capital of Rs.37,78,270/- on sale of shares of Radha Swami Buildcon Pvt. Ltd. which

she has claimed as deduction u/s 54F of the Act. Further the paper return was also filed with

AO on 28.07.2008 in which this fact is declared in the computation. Affidavit in support of

declaration of long term capital gain of Rs.37,78,270/- and deduction claimed u/s 54F as

declared in the return uploaded through software in XML file was filed at paper book page 44.

7.3 The AO, however, at Para 4 of order by just referring to the submission of assessee held

that same is not acceptable and thereby treated the amount of Rs.37,78,270/- as undisclosed

income for the year under consideration and made addition for the same.

7.4 In first appeal, the ld. CIT(A) held that the assessee has failed to explain as to how the e-

filed return could not have captured the details of capital gain and claim of deduction u/s 54F. In

fact, the data of e-filed return is showing that the long term capital gain filled up by the appellant

was blank. The claim is proven to be false from the fact that the data relating to other heads of

income are showing correct figures. In a computerized system driven environment, it is not

possible that an assessee would feed something and the IT department system would capture

something else. Moreover, in the case of e-filed return, immediately after submitting return, the

electronic copy of the return so submitted is available for download. In normal course, the

appellant would have noticed from the downloaded return that the return is not showing correct

information and in that case the appellant could have revised the return. However, this is not the

case here. Further the details of the purported transaction i.e. purchase of the shares of M/s Radha Swami Buildcon Pvt. Ltd. on 27.03.2006 for Rs.2,00,000/- at the rate of Rs.10/- per share

and subsequent sale on 07.04.2007 for Rs.40,00,000/- indicate that this was an accommodation

entry taken by the assessee . Within a short span of holding for just one year, the shares of an

9 ITA No.22/JP/2022 Smt. Vanita Tekriwal vs ITO, wed 2(3), Jaipur unknown company had risen by 20 times. Thus, clearly the assessee had not shown the long term capital gain in the e-filed return of income for AY 2008-09 but it was claimed to have been submitted in the paper return which was not in the form specified under relevant rules. The assessee had purposely done so in order to avoid any scrutiny/ investigation of the transaction. It is therefore concluded that the assessee had not shown any such income in the return of income for AY 2008-09 which has been claimed to have been brought in the capital account for the AY 2014-15. Hence, AO is justified in treating the accretion to the capital account of Rs.37,78,270/- as an undisclosed income.

7.5 It is not imperative to repeat the facts of the case, however, we find that the assessee was was allotted 20,000 shares @ Rs.10 per share by M/s Radha Swami Buildcon Pvt. Ltd. on 27.03.2006 and Copy of Form 2 is at PB 61-64. These shares were sold on 07.04.2007 to 4 companies for Rs.40 lacs and Copy of sale bills and bank statement where the sale proceeds are credited is at PB 65-69 clearly establish that the transactions are of A.Y. 2008-09. Against the affidavit and copy of online ITR filed in the paper book, the ld. DR has not filed any contrary facts that the contention of the assessee are not correct. Thus, it appears that the Ld. CIT(A) has incorrectly held that this transaction of purchase & sale of shares is an accommodation entry. Thus, once the record before the lower authorities suggest that the transaction of sale of shares and the resultant capital gain has arisen in AY 2008-09, it cannot be added in the year under consideration. Therefore, such capital gain which relate to AY 2008-09 cannot be taxed in AY 2014-15. Hence, for this reason alone, the addition made by AO and confirmed by Ld. CIT(A) cannot be sustained. Thus the grounds No. 1 and 2 of the assessee are allowed.

10 ITA No.22/JP/2022 Smt. Vanita Tekriwal vs ITO, wed 2(3), Jaipur 8.0. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 08/03/2022

Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur

fnukad@Dated:- 08/03/2022 *Mishra आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Smt. Vanita Tekriwal, Jaipur ,. izR;FkhZ@ The Respondent- The ITO, Ward- 2(3), Jaipur . 2. vk;dj vk;qDr@ The ld CIT 3. 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 6. xkMZ QkbZy@ Guard File (ITA No. 22/JP/2022) vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेजज. त्महपेजतंत

11 ITA No.22/JP/2022 Smt. Vanita Tekriwal vs ITO, wed 2(3), Jaipur