2018 (11) TMI 1928

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....quire into the details regarding the said transaction submitted during proceedings, passing the assessment order without application of mind and thereby not reaching the right conclusion, not appreciating that the assessing officer had actually verified the entire transaction and had accepted the same only after due enquiry and verification of details submitted and therefore the order u/s 263 setting aside this issue to the file of the assessing officer was not justified, 3. The learned Pr, CIT erred in setting aside to the file of the assessing officer the assessment framed by the assessing officer u/s 143 (3) of the I. Tax Act, 1961 on 29.11.2016 under the provisions of sec, 263 of the 1. Tax Act, 1961, which action is not appropriate as per law and facts and therefore the order u/s 263 dt. 16.03.2018 be held to be invalid and bad-in-law, 4. The appellant craves leave to add. alter, amend and/or vary any of the grounds at any time before the decision of the appeal." 3. The brief facts of the case are that the assessment of the assessee was completed u/s 143(3) of the I.T. Act, 1961 by virtue of order dated 29.11.2016 by Income Tax Officer 16(2)(2), Mumbai. The assessee has....

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....n the list of penny stock company. The CIT was of the view that the AO nowhere raised the query nor discussed the matter in the assessment order. The CIT was also of the view that the assessment order was passed without making proper enquiry and verification. It is to be seen whether the assessment order dated 19.11.2016 is erroneous as well as prejudicial to the interest of the revenue or not. The contention of the Ld. Representative of the assessee is that the issue has properly been examined by the AO and one of the possible legally tenable view has been taken, therefore, the proceeding u/s 263 of the Act is bad in law. The Ld. Representative of the assessee has argued that the AO while issuing the notice u/s 142(1) dated 13.10.2016 has asked about the query in question and the assessee had also replied the same by virtue of letter dated 15.11.2016, 21.11.2016 & 29.11.2016, therefore, in the said circumstances, one possible view has been taken by the AO, therefore, the CIT has no ground to invoke the provision u/s 263 of the Act. It is also specifically argued that the copy of Demat account and other relevant documents related to transaction has also been furnished before the AO....

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....ich various queries were raised and at the column no. 8, the AO asked the specific question regarding the transaction which is hereby reproduced below:- "An individual transaction statement for the F.Y. 2013-14 relating to the A.Y. 2014-15 is enclosed herewith, requested to reconcile the same with the supporting evidence." 8. The assessee replied to the said query by virtue of letter dated 21.11.2016.The detail is hereby reproduced below: - Date: 21.11.2016 To Office of the Income Tax Officer 16(2)(2), Room No. 443, 4th Floor, Aaykar Bhavan, MK Road, Mumbai-400020   Dear Sir, Re: Shri Arun S. Tripathi Pan No:ABGPT9629R A.Y.2014-15 Sub: Scrutiny assessment Proceedings In continuation of our earlier submission, please find enclosed herewith following details as desired by your good selves:- 1. Details of Bank A/c as per format along with Bank statements and Bank Summary is enclosed herewith. 2. Details of professional fees received as per AIR duly marked is enclosed herewith. 3. Detailed working of LTCG of Rs.5,74,25,508/- during the year under review, alongwith supporting documents. Tax liability on income from long term capital gain on sale o....

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....no 97 to 99 of the paper book 10 Which lies at page no 100 to 101 of the paper book 11 Which lies at page no 125 to 137of the paper book 10. We had carefully gone through the evidences with regards to the sale transaction as produced before the AO / Pr. CIT 16, Mumbai are as under: (i) Share application form of M/s. Santoshima Lease Finance & Investment India Ltd. with photocopy of cheque and bank statement of Andhra Bank (ii) Debit note of M/s. Santoshima Trade Links Ltd. for grant of 125000 shares of M/s. Conart Traders Ltd. alongwith share application form, photocopy of share certificate. (iii) Documents recording scheme of amalgamation of M/s. Conart Traders Ltd. 48 to 111 with M/s. Sunrise Asian Ltd. (iv) Printout of depositor)' participant HDFC Bank Ltd. reflecting demat of 125000 of M/s. Conart Traders Ltd. (v) Transaction statement of depositor) participant - HDFC Bank Ltd. 113 to 115 dt. 31.03.2014 reflecting dematerialization of shares of M/s. Conart Traders Ltd. and thereafter on amalgamation the share of M/s. Sunrise Asian Ltd. (vi) Ledger account of M/s. Atlanta Share Shopee Ltd. alongwith contract 116 to 140 notes for sale of shares. (vii)....

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.... enquiry during asst. proceedings, the assessee vide letter dt. 21.11.2016 submitted the details of working of long term capital gains alongwith relevant supporting documents and explained that the sale of equity shares was through recognized stock exchange and STT was also paid on the said sale. The AO thereafter raised a query with regards to difference in sale consideration, as reported in ITS statement and as per the brokers ledger account submitted by the assessee. The assessee submitted explanation for the same vide letter dt. 29.1.1.2016 and reconciled the apparent difference of Rs. 1,80,480/- to be on account of STT, Service Tax and .other charges. The assessee vide the said letter also explained the transaction of long term capital gain as well as submitted further evidences about change of name of company as sought by the AO. The AO examined the exhaustive record with regards to the transaction of purchase of sale of shares and finding the same to be in order, accepted the claim of the assessee that the long term capital gains arising on sale of 125000 equity shares of M/s. Sunrise Asian Ltd. was not liable to tax as per the provisions of section 10(38) of the I.T.Act 196....