LALIT D. SONI,MUMBAI vs. PR CIT 29, MUMBAI

O R D E R

PER MAHAVIR SINGH, JM:

2. The only issue in this appeal of the assessee is against the order of the CIT (A) confirming levy of penalty u/s 271 (1) of the Act.

3. At the outset, the learned Counsel for the assessee submitted that the quantum appeal on which penalty was levied was challenged by the assessee before the Tribunal in and the Tribunal vide order dated 02-03-2016 has allowed the appeal by deleting the disputed addition on which penalty was levied. In view of this, he requested that penalty levied on the assessee be deleted.

BEFORE SRI MAHAVIR SINGH, JM AND SRI RAMIT KOCHAR, AM (A.Y:2008-09) Lalit D. Soni, 5, Sotta Bhavan, L. T. Vs. The Principal Commissioner of Income Tax-29, C-10, 3rd Road, Mulund (East), Mumbai - 81 Floor, Pratyakshakar Bhavan, PAN:AAFPS 7764L Bandra Kurla Complex, Bandra (E), Mumbai 400 051 Appellant .. Respondent Appellant by .. Shri Bhadresh Doshi, AR Respondent by .. Shri R. P. Meena, CIT DR Date of hearing .. 19-10-2016 .. Date of pronouncement 19- 10- 2016 O R D E R

PER MAHAVIR SINGH, JM:

Also there was income from various sources. During the year there was sale of shares worth Rs.28,34,081/- through M/s. Maha Sagar Group of companies. Earning from all transactions including bogus transactions like short/long term capital gains, speculation profit/loss, commodities transaction profit/loss other sources etc. which was in excess of Rs. 1 lakh not offered for taxation. In this case assessment u/s 143 (1) was completed. Therefore I have reason to believe that earning from above activities has escaped assessment within the meaning of section 147 of the I. T. Act. A notice u/s 148 is therefore required to be issued to the assessee.” The learned Counsel also took us through the reply filed vide letter dated 07-01- 2014 and the relevant portion of the same reads as under:- “We are here with submitting copy of Income Tax Return for Asst. Year: 2008-09 along with Computation of total income, Capital account, Balance sheet for year ended on 31.03.2008, Copy of TDS Certificate from Interest and Brokerage for year ended on 31.03.2008. We are herewith submitting the copy of bank passbook for year ended on 31.03.2008 We have to state that we had not escaped any income in Ass Year 2008- 09. This is to inform you that we want copy of evidence and statement recorded for reopening of assessment proceedings U/S 148 of Income tax Act 1961. As mansions in reasons for reopening given by honour pertaining to the purchases and sales carried out through M/s. Mahasagar Group as claimed by you. Further we have to state that we do not have any purchase and sale of share with said group. Therefore, in the interest of natural justice you please provide us the complete details of the description of the shares purchased and sold, number of shares, date of purchase and sale and other relevant information.” In view of the above, the learned Counsel for the assessee stated that during the reassessment proceedings the transactions of Rs.28,34,081/- was totally denied and the assessee was not aware about any transactions for the amount of Rs.13,00,665/-. He also took us through the assessee’s accounts and stated that the only transaction in the assessee’s bank account maintained with Bank of Baroda, Mulund (East) Branch, Mumbai, a copy of which is enclosed in pages 8 to 14 of the assessee’s paper book and he took us through page 10 of the assessee’s paper book wherein transaction of Rs.6,31,238/- is shown in the name of the assessee’s wife. To prove his point, the learned Counsel for the assessee stated that this bank account is in joint name i.e. the assessee is second holder and the assessee’s wife Mrs. Hansa Lalit Soni is the first account holder. Further, to prove his point, the learned Counsel for the assessee took us through the assessment framed in the case of the assessee’s wife i.e. Mrs. Hansa Lalit Soni framed u/s 143(3) read with section147 of the Act dated 05-03-2014 wherein this transaction of Rs.6,32,290/- is considered and added in the hands of the assessee’s wife u/s 68 of the Act. The learned Counsel for the assessee stated that they have accepted this transaction in the hands of the assessee’s wife and further accepted the same as her transactions. When this facts were confronted to the learned CIT DR, he only urged that this facts need verification.

4. After hearing both the sides and going through the facts of the case, we noticed that the first two transactions i.e. transaction with M/s. Alliance Intermediaries and Network Pvt. Ltd. amounting to Rs.28,34,081/- does not at all exist. Further, there is no transaction as alleged by the Principal CIT amounting to Rs.13,00,665/-. The only transaction remains for examination is amounting to Rs.6,31,238/- being sale of shares has already been added in the hands of Mrs. Hansa Lalit Soni and she has accepted the same transaction belong to be in her name. The learned Counsel for the assessee candidly accepted that the same is under challenge before the CIT (A) but ownership is not in dispute. In the given facts and circumstances, we are of the view that the assessment framed by the AO u/s 143(3) read with section 147 of the Act dated 18-02-2014 is neither erroneous nor prejudicial to the interest of the Revenue. Accordingly, we quash the revision order passed by the Principal CIT u/s 263 of the Act. Resultantly, assessee’s appeal stands allowed.