SHRI SURESH KUMAR D. JAIN,CHENNAI vs. ITO, CHENNAI

आदेश / O R D E R

Re-assessment proceedings were initiated against assessee. In response to notice u/s.148 of the Income Tax Act, 1961 (in short ‘’the Act’’) assessee requested the ld. Assessing Officer to treat the return originally filed as one in response to such notice. It seems from the return filed by the assessee for the assessment year 2009-2010, it was found that assessee had claimed exemption from long term capital gains u/s.10(38) of the Act for gains arising out of trading of shares of one M/s. Usher Agro. As per ld. Assessing Officer purchase of shares of M/s. Usher Agro had never taken place and contract note issued by Smt. Leena Surana was bogus. As per ld. Assessing Officer the actual purchase and sale of shares of M/s. Usher Agro was 11th and 12th December, 2008.

‘’I have purchased 4400 shares of Usher Agro from Smt. Leela Surana on 11.12.2008. The purchase consideration for the above shares was paid by me in cash of �5,00,000/- including the commission amount and the cash was persoaally hadner over by me to Smt. Leela Surana. This cash is generated from my business and is unaccounted. The entries made in my books of ITA No.2959/Mds/2016. :- 3 -: accounts and the contract notes in relation to the purchase of the above shares made during the financial year 2007-2008 are not true and or bogus. The entire consideration in cash was paid by me only in December, 2008. On 12th December, 2008(next day of purchase of shares) the above shares of USHER AGRO was sold by me through MSE Financial Services Limited and Surana Capital Market for �4,72,225/-. Hence, I officer the amount of �5,00,000/- which was given by me in cash to Smt. Leela Surana as my unaccounted business income and will pay tax in a day...’’ Ld. Assessing Officer was of the opinion that a sum of �5,00,000/- represented unaccounted income earned by the assessee during the financial year 2007-08 being the previous year relevant to the impugned assessment year. He made an addition of �5,00,000/- and completed re-assessment.

Assessee moved in appeal before ld. Commissioner of 4.

Income Tax (Appeals) but did not meet with any success.

Now before me, ld. Authorised Representative submitted that 5. admittedly purchase consideration of �5,00,000/- was paid by the assessee in December, 2008. When the purchase consideration was paid in December, 2008, the relevant previous year in which amount should have been considered for taxation, as per the ld. Authorised Representative was previous year ending 31st March, 2009 relevant to ITA No.2959/Mds/2016. :- 4 -: assessment year 2009-2010. As per ld. Authorised Representative amount was wrongly considered in assessment year 2008-2009.

I have considered the rival contentions and perused the 7. orders of the authorities below. Basis on which the addition has been made is the letter dated 16.12.2009 of the assessee which has been reproduced by me in para 3 above. No doubt it is mentioned herein that the cash of �5,00,000/- was generated by the assessee from its business and was unaccounted. However, it is clearly stated that the entire consideration was paid in cash in December,2008. Thus, the sum, if it was considered as unexplained investment or unaccounted income pertained to previous year ending 31.03.2009 and not previous year ending 31.03.2008. The addition if at all it could have been made was for assessment year 2009-2010 and not assessment year 2008- 2009. Income did not pertain to the impugned assessment year. The ITA No.2959/Mds/2016. :- 5 -: addition of �5,00,000/- therefore stands deleted.

In the result, the appeal of the assessee is allowed. 8.

Order pronounced on Wednesday, the 25th January, 2017, at Chennai.