Calcutta High Court
Commissioner Of Income Tax vs Kedarnath Agarwal (Huf) on 2 February, 2011
Author: Bhaskar Bhattacharya
Bench: Bhaskar Bhattacharya
GA No. 47 of 2011
GA No. 48 of 2011
ITAT No. 6 of 2011
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction (Income Tax)
ORIGINAL SIDE
COMMISSIONER OF INCOME TAX, KOLKATA-XII, KOLKATA
Versus
KEDARNATH AGARWAL (HUF)
For the appellant : Ms. Smita Das De, Adv.
For the Respondent : Mr. J. P. Khaitan, Adv.
BEFORE:
The Hon'ble JUSTICE BHATTACHARYA The Hon'ble JUSTICE DR. SAMBUDDHA CHAKRABARTI Date : 2nd February, 2011.
The Court : After hearing learned counsel for the parties and after going through the explanation given in the application for condonation of delay being GA No.47 of 2011 we are satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the period of limitation. We, thus, condone the delay in filing the appeal.
This appeal under Section 260A of the Income Tax Act is at the instance of the Revenue and is directed against order dated 9th April, 2 2010 passed by the Income Tax Appellate Tribunal 'B' Bench, Kolkata in ITA No. 2094/Kol/2009 for the assessment year 2004-05 thereby confirming the order passed by the learned CIT (Appeal).
The only question that arises for determination in this appeal is whether the Tribunal below was justified in holding that the short- term capital loss of Rs.15,29,049/- claimed by the assessee from the sale of shares was genuine loss or not.
After hearing learned advocate for the appellant and after going through the materials on record, we find that the Assessing Officer has disallowed the trading loss of Rs.15,29,049/- suffered by the assessee on account of the share invested by him. Out of those scrips three scrips were listed on Calcutta Stock Exchange and others on BSE/NSE. It further appears that during the course of assessment proceedings the assessee had submitted the copies of purchase and sale contract notes issued by the brokers along with the copies of Demat account as well as the copies of his bank statements. The Assessing Officer had called for certain information from the Calcutta Stock Exchange and he also forwarded the copies of the contract notes to the Stock Exchange submitted by the assessee. On receipt of information from Stock Exchange it was observed by the Assessing Officer that there were many anomalies in the share transactions carried out by the assessee. The assessee, however, clarified that he 3 had carried out all the transactions of purchase and sale of those shares through registered share brokers of Calcutta Stock Exchange and that they had issued the contract notes which had been duly submitted. It was also pointed out that the consideration for purchase and sale of those shares have been paid or received through banking channels and copies of bank statements have also been submitted. It further appeared that on purchase of these shares the delivery was taken in Demat account and similarly when the shares were sold, the delivery to the respective brokers have also been given through Demat account. The copy of the Demat account was also submitted during the assessment proceeding. The Assessing Officer was of the view that the assessee had incurred loss in those shares which were listed on the Calcutta Stock Exchange. The Appellate Authority, however, did not agree with such observation of the Assessing Officer as would appear from the fact that the assessee had suffered loss of scrips which were listed both on BSE/NSE. The Assessing Officer further observed that in some of the cases the broker had not carried out transactions on his client's code but on his own code. But according to him, a broker cannot and should not trade on behalf of his client through his own code as it was not permissible under the law and there was scope of manipulation. Such point had been negatived by the Appellate Authority by pointing out that the Assessing Officer had not brought 4 any provision under which such transactions are prohibited. The Appellate Authority further came to the conclusion that so far the assessee was concerned, he had entered into transactions of purchase and sale through brokers and he was not responsible for the manner in which the brokers carried out the transactions. It was pointed out that the assessee was concerned only about the receipts of the shares on purchase and delivery of shares to the brokers on their sale and the Assessing Officer had not brought anything on record to prove that there was any connivance between the assessee and the share brokers.
The Appellate Authority further came to the conclusion that the Assessing Authority had disallowed the capital loss of Rs.15,29,049/-only on the basis of information submitted by the Stock Exchange and the Assessing Officer himself had not brought anything on record to prove that the transactions of purchase and sale of the shares in which the assessee had suffered the loss were not genuine transactions. It is further recorded by the Appellate Authority that the assessee had submitted the complete documentary evidences to prove his transactions of purchase and sale of those shares and the Assessing Officer could not prove that the evidence submitted by the assessee was either false or fictitious. It was further pointed out that the assessee had purchased and sold the shares through the registered share brokers of the CSE, the delivery of shares was received or given 5 through the Demat account and the payments were made or received through the account payee cheques and the correctness of those documents was beyond any doubt.
From the aforesaid materials we find that the capital loss incurred by the assessee on the sale of shares listed on CSE and others was really genuine loss and thus, the Tribunal below rightly confirmed the order passed by the Appellate Authority and as such, no substantial question of law is involved in this appeal.
The appeal is thus devoid of any merit and the same is dismissed.
Urgent photostat certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(BHATTACHARYA, J.) (DR. SAMBUDDHA CHAKRABARTI, J.) kc.
AR(CR)