TaxTMI 
TaxTMI 
2019 (10) TMI 1387
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....h commission must have been paid @ 1% on the alleged bogus Long Term Capital Gain. 3. The facts in brief are that the assessee has applied for 50,000 shares of M/s. AAR Infrastructure Ltd. for the face value of Rs. 10/- per share and paid consideration of Rs. 5,00,000/- vide cheque no. 169799 dated 13.01.2011. The assessee was allotted 50,000 equity shares on 17.2.2011. After receiving the allotment letter, all the share were dematerialized by the assessee in her Demat account on 26.4.2011. Thereafter, M/s. AAR Infrastructure Ltd. got amalgamated with M/s. CCL International Ltd. and according to the amalgamation scheme, the assessee received 1,25,000 shares of M/s. CCL International Ltd., in the proportion of 250 equity shares of Rs. 2 per share and 100 equity shares of Rs. 10 per share. These shares which were allotted on 17.2.2011 were sold for Rs. 1,82,76,483 between 29.08.2012 to 10.10.2012. Accordingly, Long Term Capital Gain of Rs. 1,77,25,158/- was claimed in the return of income filed for the Assessment Year 2013-14. The case was reopened u/s.147 on the ground that income of Rs. 1,82,76,483/- has escaped assessment for failure on the part of the assessee to explain the sou....
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....dgment of Hon'ble Jurisdictional Delhi High court judgement in the case of PCIT vs. Tupperware India Ltd., (2016) 284 CTR 0068 (Del) 5. On the other hand, ld. DR relied upon the judgment of Hon'ble Madras High Court in the case of Home Finders Housing Ltd. v. ITO (2018) 404 ITR 611 (Mad.), wherein the Hon'ble High Court has held that Assessing Officer is though bound to dispose of the objection by passing a speaking order, but assessment cannot be quashed and matter should be sent back to the Assessing Officer to dispose of the objections. Thus, in this case also matter should be restored to the Assessing Officer. 6. We have heard the rival submissions and also perused the relevant material placed on record on the validity of reopening challenged by the assessee on the ground that Assessing Officer has not disposed off the objections filed in response to notice u/s.148 in view of principle laid down by the Hon'ble Supreme Court in the case of GKN Driveshafts (supra). From the records, it is clearly borne out that assessee did filed a detailed objections before the Assessing Officer vide letter dated 23.05.2017 challenging the validity of reopening u/s 147/148 on various counts. S....
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....efect "does not make the assessment order illegal and hence it cannot be quashed. It is a technical mistake which is curable." 6. The Court is of the considered view that after having correctly understood the decision of the Supreme Court in GKN Driveshafts (India) Ltd. (supra) as mandatorily requiring the AO to comply with the procedure laid down therein and to dispose of the objections to the reopening order with a speaking order, the CIT (A) committed an error in not quashing the reopening order and the consequent assessment." Xxx xxxxx xxxx xxxx xxxx xxxx xxxx 9. Consequently, for both the aforementioned reasons, viz., that there was a failure by the AO to comply with the mandatory requirement of disposing of the objections of the Assessee to the reopening in terms of the law explained by the Supreme Court in G.K.N. Driveshafts (India) Ltd. (supra) as well as on account of the failure of the Revenue to challenge before the ITAT the order of the CIT (A) deleting on merits the disallowance made by the AO of the management service fee consequent upon reopening of the assessment, there appears to be no need to examine the issue projected by the Revenue in this appeal viz., the....
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....ACIT, (2017) 398 ITR 198 (Del), in similar circumstances, this Court observed that held as under: "19. Before parting with the case, the Court would like to observe that on a routine basis, a large number of writ petitions are filed challenging the reopening of assessments by the Revenue under Sections 147and 148 of the Act and despite numerous judgments on this issue, the same errors are repeated by the concerned Revenue authorities. In this background, the Court would like the Revenue to adhere to the following guidelines in matters of reopening of assessments: (iv) The exercise of considering the Assessee's objections to the reopening of assessment is not a mechanical ritual. It is a quasijudicial function. The order disposing of the objections should deal with each objection and give proper reasons for the conclusion. No attempt should be made to add to the reasons for reopening of the assessment beyond what has already be disclosed." 5. In the present case, the AO has not chosen to dispose of the objections, filed by the Petitioner against the reopening of the assessment but has proceeded to the stage of passing the reassessment order itself. 6. In almost an identical ....
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....lso been crossed and assessee's objection remains indisposed off. If a law mandates the Assessing Officer to act in a specific manner especially in the case of jurisdictional issue relating to Section 147, then he has to adhere to the mandate of the law; and if there is any violation of such law, the consequence is fatal to the entire reassessment proceedings and results into quashing of the assessment itself. The assessee here in this case was denied remedy to challenge the action u/s 147/148, had the objections been disposed off adversely to the assessee. The Hon'ble Jurisdictional High Court in the case of PCIT vs. Tupperware India (supra) as noted above has clearly opined that such a failure to comply the law laid down by the Hon'ble Supreme Court should have resulted in quashing of the reassessment. Accordingly, if the above principle and the ratio laid down by the Hon'ble High Courts cited above and by the Hon'ble Jurisdictional High Court is to be followed, then we are of the opinion that on this ground alone the impugned reassessment order is liable to be quashed and at this stage we are not inclined to set aside this issue to Assessing Officer for deciding this matter when....
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....e kept on rising which proves that prices were rigged in the stock exchange through manipulation. Further, various brokers whose statements were recorded by the Investigation Wing, it was found that the shares of the CCL International were facilitated for providing bogus entry to various persons. After detailed discussion and discussing various case laws, Assessing Officer held that amount credited in the bank account of the assessee out of purported sale of shares is in the nature of bogus long term capital gain which is taxable u/s.68. However he has taxed only net long term capital gain and not the entire amount. He further made disallowance of commission @ 1% u/s.69C on notional basis on account of alleged commission which must have been paid to such accommodation entry. 10. Ld. CIT (A) in his ex-parte order has confirmed the said reasoning and the order of the Assessing Officer. 11. Before us, the ld. counsel for the assessee drew our attention to the scrip-wise chronology of events which is as under: Share Script Description Description A.Y. 2013-14 M/s. CCL International Limited (AAR Infrastructure Ltd.) No. of shares 50000 Acknowledgment Receipt Available Share A....
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....ent that assessee was either beneficiary or was indulged in bogus transaction. The assessee has duly discharged the onus by proving the genuineness of the transaction by filing all the details relating to purchase, dematerialization which was done immediately after the purchase and sale which almost after one and a half years and all the documentary have been produced to prove the genuineness of the Long Term Capital Gain. In respect of same scrip, he has filed the decision of Co-ordinate Bench in the case of Deep Nagar vs. ACIT, ITA No.3212/Del/2019 order dated 12.06.2019 to show that trading in these shares and LTCG has been accepted to be genuine and also following decision of Co-ordinate Benches dealing in the same scrip:- (a) Smt. Sumita Hinger vs. ITO, Ward - 22 (1) 2019 (7) TMI 529 (Kolkata LTAT) (b) Ramesh Chandra K. Shah Versus ACIT Central Circle- 30), 2019 (2) ITA No. 113/Kol/2018(Kolkata ITAT). (c) Mukta Gupta, Mohan Lai Agarwal (Huf) Versus Ito, Ward-1 (4), Ghaziabad vide I.T.A. No.2766/DEL/2018, I.T.A. No.2767/DEL/2018 dated 26.09.2018. (d) Commissioner of Income Tax-1 vs Mahesh chandra G. Vakil (2013) 10 taxmann.com 326 (Gujrat High Court) (e) Commissioner ....
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....ch were allotted on 17.02.2011 have been sold after period of more than 18 to 20 months, i.e., on 29.08.2012 to 10.10.2012. The said shares have been sold through stock broker M/s. Indianivesh Securities Pvt. Ltd. 17. Before us the ld. counsel has in his brief note has stated that following documents and statements were filed before the authorities below: (a) All the transactions were supported by proper Contracts Notes and delivery of shares was made through De-mat Account with stock broker, M/s Indianivesh Securities Pvt. Ltd. (who is the member of BSE and registered with SEBI). The shares were sold in the open market. The appellant has fulfilled all the condition u/s 10(38) of the Income Tax Act, 1961. The appellant has already filed National Security Depository Limited generated Demat Account and the broker statement relating to the sale of share in our paper book, also relevant demat statement highlighting the shares purchased has already been submitted before the Ld. AO. b) The appellant has earned long term capital gain through genuine purchase and sale of shares of the listed companies in normal course. There was no default on the part of the appellant. Moreover, the a....
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....s scrip. No inquiry whatsoever has been made from the broker of the assessee. Further, during the period in which assessee had purchased the shares and had sold them whether the SEBI had suspended the trading has not been mentioned, in fact, Assessing Officer himself mentions that there was brief suspension in the year 2010, whereas the assessee has purchased shares in the year 2011 and sold them in the year 2012. Coming to the financials, as culled out from the records, the revenue from the operation of M/s. CCL International Ltd. from March, 2010 to March, 2012 was between Rs. 55.25 crore to Rs. 79 crore. Thus, it cannot be held that it was mere a paper entity. From a bare perusal of the history of listing and trading of shares and the quote of Bombay Stock Exchange as quoted in the assessment order, it clearly reflects that as on 06.02.2010, the closing price was Rs. 50 and there was a steady increase and within the period of 4 years the price had reached up to Rs. 609 on 25.11.2014. Nowhere, it has been pointed out that the rise was beyond the cap laid down by the SEBI, because the price of the scrip cannot rise beyond the cap prescribed by the SEBI. If the shares have been pur....