TaxTMI 
TaxTMI 
2018 (9) TMI 1682
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....order of A.O. treatThe copy of declaration made by grand father ing investment in flat of Rs. 2,15,28,820/- as unexplained investment u/s. 69 without appreciating that assessee had given satisfactory explanation of source of investment being consideration received on sale of shares in current year and earlier year which shares were held in D-MAT account of assessee and hence entire addition made by learned A.O. to be deleted. 2. The learned CIT(A) erred in partly confirming order of learned A.O. treating investment in flat of Rs. 2,15,28,820/- as unexplained investment u/s. 69 without appreciating that S.69 is not applicable as source of investment is from sale of shares which were acquired in earlier years and hence entire addition made by learned A.O. deserves to be deleted. 3. The learned CIT(A) erred in confirming order of A.O. rejecting excess claim of exemption u/s.10(38) made in revised computation of income by wrongly observing that (i) appellant made a claim that the exemption was claimed in the revised return of income and (ii) revised computation was an act of deliberate attempt on the part of the appellant not to reveal full share transactions in his r....
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....e also submitted copies of demat account statement for financial year 2010-11 and 2011-12 and it was explained that the share transactions for sale of shares were done through registered brokers and Securities Transaction Tax(STT) was duly paid on sale of shares which is reflected in the brokers note. The assessee explained that the demat account is maintained with Saraswat Co-operative Bank Limited which is the only demat account held by the assessee in which shares are held by the assessee. It was explained that the demat account as well bank account were duly disclosed to the Revenue in return of income filed by the assessee with Revenue. The assessee had explained that assessee held the share which were acquired over a period of time by way of gift from his grandfather Late Dr. Yahyabhoy E. Kachwalla as per declaration made under sub-section 1 of Sec. 65 of the Finance Act 1997 in respect of Voluntary Disclosure of Income Scheme(VDIS) which was accepted by learned Commissioner of Income-tax, Mumbai. It was explained that the assessee also received gift of shares from his father Shri Shabbir Y. Kachwalla on 11-04-2008 which were transferred to his demat account with Saraswat Co-....
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.... declared to Revenue in return of income filed with Revenue. The assessee claimed that dividend so received by the assessee from year to year is credited in the singular bank account maintained by the assessee with Bank of Maharashtra which has been declared in the return of income filed with the revenue. It is the claim of the assessee that the singular D-MAT account held by the assessee with Saraswat Co-operative Bank Limited in which all these shares were held was duly declared and disclosed to the revenue over a period of time as the dividend received on account of share held in this Demat accounts were duly declared and disclosed to revenue from time to time. Thus, it was claimed that all the share which were sold were declared and disclosed to Revenue over a period of time vide disclosure by way of declaration of dividend income earned on these shares as well bank account maintained with Bank of Maharashtra being disclosed to Revenue in the return of income filed with Revenue. The AO disbelieved the assessee and made addition to the tune of Rs. 2,15,28,820/- towards the investments made in the aforestated new residential flat after giving accepting explanation of source for m....
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....ome in an appeal before the tribunal and it is submitted by Ld. Counsel for the assessee at the outset that ground no. 4 is not pressed. Prayer is made for dismissal of ground no. 4. The learned DR has not raised any objection to dismissal of ground no. 4. After hearing both the parties, we are of the view that the ground no. 4 raised by the assessee in memo of appeal filed with the tribunal be dismissed. We dismiss ground no. 4. We order accordingly. 7. With respect to ground no. 1 to 3 raised by the assessee in memo of appeal filed with the tribunal, it is explained by learned Senior counsel for the assessee that the assessee has not purchased any shares during the relevant assessment year, while the shares were all acquired/purchased in the preceding years by way of several modes such as gifts/inheritance from grandfather/father, fresh purchases from market/IPO as well bonus shares allotted by the companies. It was also explained by learned Senior Counsel that the assessee filed return of income consistently since AY 2009-10 onwards and our attention was also drawn to return of income filed by the assessee. It is also explained that the dividend income has been credited in th....
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....T(A).The learned AO while passing order giving effect to learned CIT(A) appellate order has given relief to the assessee with respect to the shares gifted by father as well given by grandfather out of VDIS scheme. However, while passing order to give effect to appellate order of learned CIT(A), the AO did not grant relief to the assessee with respect to the shares which were acquired since AY 2009-10 onwards as were directed by learned CIT(A) to grant relief after verifying that income earned and disclosed to Revenue was utilised for making investments in shares in those years. The Revenue has not come in appeal before ITAT against relief granted by learned CIT(A) as neither learned DR nor Senior counsel for the assessee could bring the said fact on record before the tribunal. 8. We have considered rival contentions and perused the material on record including cited case laws. We have observed that the assessee is salaried employee having income from salaries, capital gains, interest income and dividend income. The assessee is not maintaining any books of accounts as it is claimed that the assessee is not required to maintain books of accounts within mandate of the 1961 Act as t....
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....mpugned assessment year out of the total cost of the said new flat being pegged at Rs. 3,20,00,000/-. It is claimed that the assessee held 75% of the share in the said flat while 25% share in the said new flat is held by his father. The assessee had explained that assessee made investments in the said residential flat by selling shares for Rs. 2,25,78,513/- and also by obtaining loan from Ms. Shahida Kachwalla of Rs. 20,00,000/-. The authorities below had accepted loan of Rs. 20,00,000/- raised by the assessee from Ms. Shahida Kachwalla as explained source for making investment in new flat and there is no dispute so far as sources for making investment in flat to the tune of this Rs. 20,00,000/- is concerned. The dispute had arisen between rival parties with regard to sources for making investment in new flat to the tune of Rs. 2,15,28,820/- which is stated to be raised by the assessee from sale of shares in the impugned assessment year to the tune of Rs. 1,67,40,371/- (later corrected by assessee to Rs. 1,72,85,949/- on being pointed by the AO through revised computation of income filed in assessment proceedings before the AO but not accepted by authorities below on the grounds th....
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....s even though the assessee filed return of income for those years while learned CIT(A) directed AO to grant relief to the assessee if the assessee is able to demonstrate that the amount from which these shares were acquired/purchased represent income which stood declared to the Revenue. There is no incriminating finding by the AO in order giving appeal effect while the assessee is contending that these are the shares acquired in preceding years and the assessee has duly declared bank account as well the dividend earned on these shares on year to year basis to Revenue in return of income filed with Revenue. We are in agreement with the contention of the assessee as the assessee duly filed return of income for AY 200910 onwards and if the bank account from where these investments were made as well dividend declared/disclosed in return of income albeit exempt from tax was declared to the Revenue in return of income filed by the assessee for those years in which fresh acquisition/purchases were made as well in subsequent years, then there is no reason/justification for making any additions for the impugned assessment year under consideration before us. If any case if the Revenue wanted....
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....see has claimed that since 2009-10 onwards, the dividend income arisen from these shares was regularly declared by assessee to Revenue from year to year in return of income filed with Revenue and hence the said shares cannot be classified as undisclosed investments, we agree in principle with the contention of the assessee that no addition is warranted for the impugned assessment year if the said shares were disclosed to Revenue from year to year in preceding years, wherein bank account as well income arose from these shares by way of dividend were on record with the Revenue. The demat accounts are linked with bank account and the dividend etc is received electronically in the bank account linked with the demat account. The assessee has one bank account with Bank of Maharashtra and one demat account with Saraswat Co-operative Bank Limited. In any case if Revenue wanted to make additions on this count, it is the first year i.e. AY 2009-10 when declaration and disclosure was made for the first time for such shares, the additions could have been made by Revenue towards unexplained investment but not the year under consideration. Under these circumstances, the said shares cannot be cla....
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....he AO for limited verification purposes and if it is found these shares acquired by the assessee between AY 200506 to AY 2008-09 were declared to Revenue vide declaration of dividend income from these shares were credited in saving bank account maintained with Bank of Maharashtra which was declared in the return of income filed with Revenue from year to year thereafter since AY 2009-10 albeit dividend income was claimed exempt from tax, then the said additions as were made by the AO for shares acquired between AY 2005-06 to AY 2008-09 shall be deleted by the AO as these investments were duly declared and disclosed investments. The Revenue could have invoked provisions of Section 142(1) or 147/148 of the 1961 Act for those years when the said shares were acquired/purchased or could have made addition in the first year when the assessee disclosed said investment to Revenue i.e. AY 2009-10. Similarly we are of the view that the shares which were sold in immediately preceding year i.e. AY 2011-12 and against which sale proceed to the tune of Rs. 50,00,000/- was invested in the aforesaid new residential flat cannot be brought to tax for similar reasons for the year under consideration a....