SUKHRAM HERENJ,KOLKATA vs. ACIT, CIR-17, KOLKATA, KOLKATA

The assessee in the present case is an individual, who was employed with Indian Oil Corporation during the year under consideration. For the said year, the return of income was filed by the assessee on 31.07.2008 declaring total income of Rs.9,50,798/-. During the course of assessment proceedings, it was noticed by the Assessing Officer that the assessee has entered into substantial transactions in sale and purchase of shares. In the return of income, the assessee, however, had not offered any income from capital gain. In this regard, the ./2015 Assessment year: 2008-2009 Page 2 of 4 explanation offered by the assessee before the Assessing Officer was that all the shares were sold by him after holding the same for more than one year and since the long-term capital gain arising from such sale was not chargeable to tax, the same was not disclosed in the return of income. The assessee, however, could not support and substantiate this explanation by following the relevant details of purchase and sale of shares despite sufficient opportunity afforded by the Assessing Officer. The Assessing Officer, therefore, did not accept the explanation of the assessee and proceeded to estimate the income of the assessee from purchase and sale of shares at Rs.10,00,000/- and brought the same to tax in the hands of the assessee under the head “Long-term Capital Gain” in the assessment completed under section 143(3) vide an order dated 31.12.2010. Thereafter, the assessee moved an application under section 154 seeking rectification of the order passed by the Assessing Officer under section 143(3) on the ground that all the shares sold during the year under consideration having been held by him for more than one year, the long- term capital gain arising from such sale was not chargeable to tax. However, keeping in view that the relevant details and evidence to support and substantiate this claim were not brought on record by the assessee during the course of assessment proceedings under section 143(3), the Assessing Officer held that there was no mistake apparent from record in his order passed under section 143(3) on this issue and accordingly, the application filed by the assessee under section 154 was rejected by him.

On appeal, the ld. CIT(Appeals) upheld the action of the Assessing Officer in rejecting the application of the assessee under section 154 by observing that in the absence of relevant details and documents placed on record by the assessee in support of his claim of long-term capital gain, there was no mistake apparent from record in the order of the Assessing Officer passed under section 143(3), which could be rectified under section 154. Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal. ./2015 Assessment year: 2008-2009 Page 3 of 4

I have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that the claim of the assessee for exemption on account of long-term capital gain arising from the sale of shares was not accepted by the Assessing Officer for want of relevant details and documents as the assessee had failed to produce the same before the Assessing Officer despite sufficient opportunity afforded to him. The relevant details and documents supporting the claim of the assessee for such exemption thus were not available on record before the Assessing Officer when the assessment under section 143(3) was completed and this being the undisputed position, I find myself in agreement with the ld. CIT(Appeals) that it cannot be said that there was any mistake in the order of the Assessing Officer passed under section 143(3) in disallowing the claim of the assessee for exemption on account of long-term capital gain and estimating the income of the assessee on account of short-term capital gain at Rs.10,00,000/-. The impugned order of the d. CIT(Appeals) upholding the order passed by the Assessing Officer under section 154 rejecting the application of the assessee for rectification, therefore, is upheld and this appeal filed by the assessee is dismissed.

In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on September28, 2016.