KISHIN G ADVANI,MUMBAI vs. ITO WD 19(1)(1), MUMBAI

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ITA 5035/MUM/2013Status: DisposedITAT Mumbai06 December 2016AY 2009-103 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found that the CIT(A) had not properly examined the details regarding the short-term capital gains and directed the AO to reconsider the issue. For the cash deposits, the Tribunal found that verification of the peak amount was necessary and remanded the matter to the AO.

What were the facts?

The assessee appealed against the CIT(A)'s order confirming additions made by the AO on account of short-term capital gains and cash deposits. The CIT(A) had rejected the claim for set-off of long-term capital losses against short-term capital gains.

What were the issues?

Whether long-term capital losses can be set off against short-term capital gains, and whether cash deposits in bank accounts and cash books constitute unexplained cash credits requiring addition to income.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, MUMBAI

For Appellant: Shri. Ketan H. Shah, AR
For Respondent: Shri. M.V. Rajguru, DR

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SRI MAHAVIR SINGH, JM AND ASHWANI TANEJA, AM (A.Y:2009-10) Mr. Kishin G Advani Income Tax Officer Flat No.1, Cosmopolitan, Union 19(1)(1), Mumbai. Park, Khar(W), Vs. Mumbai-400052 PAN No.AABPA3211G Appellant .. Respondent Assessee by .. Shri. Ketan H. Shah, AR Revenue by .. Shri. M.V. Rajguru, DR Date of hearing .. 06-12-2016 Date of pronouncement .. 06-12-2016 O R D E R PER MAHAVIR SINGH, JM:

This appeal by the assessee is arising out of the order of CIT (A)-30, Mumbai in appeal No. CIT (A)-30/ITO-19(1)(1)/IT-38/11-12 dated 06-05-2013. The Assessment was framed by ITO-19(1)(1), Mumbai for the A.Y. 2009-10 vide order dated 08-11-2011 u/s 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’).

2.

The first issue in this appeal is against the order of CIT(A) confirming the addition made by AO on account of short term capital gain of Rs.1,15,274/-.

3.

We have heard the rival contentions and gone through the facts and circumstances of the case. We find from the assessment order that the AO made addition as assessee could not submit in explanation qua the claim of short term capital gain on sale of shares of Glenmark, Reliance Industries and Jindal Power Ltd. amounting to Rs.1,15,274/-. The CIT(A) noted that the loss claimed in long term capital loss and therefore cannot be set off against the short term capital gain. For this he observed in Para 3 of appellate order as under: -

“In the appellate proceedings it is contended that there was loss in share transactions also which should be set off against the profit added by AO. A perusal of the capital account reveals that the loss claimed for set off in respect of Jindal Steel, Tata Tele Services and Engineers India Ltd. shares are Long Term Capital Loss and therefore cannot be set off against short term capital gain added to income by AO. The ground of appeal is therefore rejected.”

4. Now before us, learned Counsel for the assessee took us through the details and argued that these shares are actually sold within one year of purchase and holding period in each of the case i.e. three scrip’s is less than one year. The details are enclosed at assessee’s paper book in page No.14. We find that the CIT(A) has not gone into these details and without going into these details he passed a non-speaking order. We also find that these details were not filed before AO by the assessee. In such circumstances and going through the facts of the case, we feel that this issue needs reconsideration at the level of AO. The assessee is directed to submit these details before AO, who will look into the details and decide the matter accordingly. This issue of assessee’s appeal is allowed for statistical purpose.

5. The next two inter-connected issues are as regards to the addition confirmed by the CIT(A) on account of cash deposit in bank account of assessee amounting to Rs.31,17,730/- and cash deposit in cash book in different name amounting to Rs.7,95,220/-. For this assessee has raised following ground No. 2 & 4.

“2. That the learned CIT(A) has erred in confirming and upholding the Addition of Income made by the AO on account of wrong consideration of Rs.31,17,730/- as unexplained cash credit u/s 68 of the Income Tax Act, 1961 is unjustified, unwarranted and bad in law.

4.

That the Learned CIT(A) has erred in confirming and upholding the Addition of Income made by the AO on account of wrong consideration of Rs.7,95,220/- as unexplained cash credit u/s 68 of the Income Tax Act, 1961 is unjustified, unwarranted and bad in law.”

6.

We have head the rival contentions and gone through the facts and circumstances of the case. The learned Counsel for the assessee made only one plea that the peak of these two addition is only Rs.3,91,102 and at the best that can be added. The learned counsel for the assessee took us through the written submissions filed before the Tribunal and made this plea for the first time that at the best this can be added and for this he stated that the complete books of account and details i.e. the entries of cash books in regard to cash deposit were submitted before the AO as well as before CIT(A). According to him, the AO or CIT(A) should have considered the peak amount after verification. On query from the Bench, the learned Sr. DR only requested that at this stage peak verification is not possible and hence, he stated that the issue can be remitted back to the file of the AO for verification of peak. After

hearing both the sides and going through the facts, we are of the view that these details need verification and in case assessee is able to establish the peak, the AO will accept the same and accordingly, can make addition of peak credit only. Needless to say that the AO will allow reasonable opportunity being heard to the assessee. The orders of the lower authorities are set aside and the matter is remanded back to the file of the AO.

7.

As regards to another issue of addition of difference in capital amounting to Rs. 25,000/-, the learned counsel for the assessee stated that he is not pressing the issue due to smallness of the amount and the same can be dismissed.

8.

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

Order pronounced in the open court on 06-12-2016.

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