Income Tax Appellate Tribunal - Mumbai
Ravindrakumar Toshniwal, Mumbai vs Department Of Income Tax on 27 February, 2013
ITA No.1356 of 2010 Ravindrakumar Toshniwal Mumbai
IN THE INCOME TAX APPELLATE TRIBUNAL
"D" Bench, Mumbai
Before Shri B. Ramakotaiah, Accountant Member
& Shri Sanjay Garg, Judicial Member
ITA No.1356/Mum/2010
(Assessment year: 2006-07)
Asstt. Commissioner of Income Vs. Ravindra kumar Toshniwal,
Tax-14(3), 6th Floor, Earnest 5th Floor, Gopal Bhavan,
House, Nariman Point, 199, Princess Street,
Mumbai 400021 Kalbadevi, Mumbai 400002
PAN: AAAPT 1909 P
(Appellant) (Respondent)
Department by: Shri A.K. Kardam, DR
Assessee by: Shri V.K. Tulsian
Date of Hearing: 27/02/2013
Date of Pronouncement: 13/03/2013
ORDER
Per B. Ramakotaiah, A.M.
This is an appeal by the Revenue directed against the orders of the CIT (A)-25, Mumbai dated 24.11.2009. The Revenue has raised the following two grounds:
"1. On the facts and in the circumstances of the case, the learned CIT (A) is erred in deleting addition of `.50,10,861 made by AO as income from other sources in respect of Long Term Capital Gain shown by assessee as sale of shares of M/s Talent Infoway Ltd.
2. Whether on the facts and circumstances of the case the learned CIT (A) ought to have appreciated the fact that assessee has shown to have purchase and sale of shares and declared as Long Term Capital Gain is merely accommodation entries and the share transactions are not transferred through a recognized stock exchange. He even could not provide the name of broker, who had given advise and arranged for sale of shares. Assessee was not aware of the financial performance of the companies in which he had invested Page 1 of 4 ITA No.1356 of 2010 Ravindrakumar Toshniwal Mumbai and earned huge gains. Thus, assessee could not substantiate his claim of Long Term Capital Gain".
2. Briefly stated assessee is engaged in the business of export of textiles and yarns. Assessee filed return of income declaring total income of `.27,03,700. In the assessment order under section 143(3) AO treated the LTCG of `.34,65,680 offered by assessee and claimed exempt under section 10(38) was treated as bogus capital gain following the order in assessment year 2005-06. The entire sale consideration of `.42,58,030 was considered as income from other sources. In addition STCG on sale of shares were also considered as bogus and the entire sale consideration at `.7,52,831 was also considered as income from other sources. Most of the findings given by AO in this year are on the basis of the order of AO in assessee's own case in assessment year 2005-06.
3. Following the submissions and the orders of the CIT (A) in assessment year 2005-06 the learned CIT (A) did not approve the action of AO with reference to the amount of `.35,19,398. The learned CIT (A) directed it to be treated as LTCG but to be taxed at the prevailing rate as no STT was paid by assessee on the said transaction, therefore, provisions of section 10(38) to exemption were not satisfied. With reference to the STCG also on verifying the corroborative evidences, he held the transactions in shares of Buniyad Chemicals Ltd are genuine and therefore treating the same as income from other sources does not arise and directed to be taken as STCG only. In view of the above, the Revenue is in appeal before us.
4. At the outset it was submitted that the similar issue was agitated in assessment year 2005-06 on the basis of which the learned CIT (A) also examined the issue and deleted the addition. In that year the issue was decided in favour of assessee by CIT(A) and ITAT confirmed the same. The order of the ITAT in ITA Page 2 of 4 ITA No.1356 of 2010 Ravindrakumar Toshniwal Mumbai No.5302/Mum/2008 for assessment year 2005-06 in assessee's own case is as under:
"11. Having heard both the parties and having considered their rival contentions, we find that the AO has treated the said transactions as bogus transactions on the ground that-
a) The sale transactions were not on the floor of the ASEL but were off market transactions;
b) The address of the M/s Buniyad Chemical Ltd.
and M/s Talent Infoway Ltd. was the same and the contact person for M/s Buniyad Chemical Ltd. on the floor of ASEL was Shri Mukesh Chokshi.
c) Mr. Mukesh Chokshi had stated that the sale proceeds have been paid to the assessee through the funds provided by the assessee.
12. As regards point (a) above, we find that the issue is covered by the decision of the Tribunal in the case of Mukesh R. Marolia wherein it has been held that off market transaction is not a unlawful activity and there is no relevance in seeking details of share transaction from stock exchange when the sale was not on stock exchange and relying upon it for making addition.
13. As regards points (b) & (c) above, we find that the assessee has filed relevant documentary evidence before the AO but the AO has failed to consider the same. The CIT[A] in his order has considered the said evidence and has come to the conclusion that the share transactions are genuine. However, as held by the Tribunal in the case of Rajinidevi A. Chowdhary [cited supra], which is on similar set of facts, the AO could have verified from the Registrar of companies as to whether the shares have been transferred and the names of the shareholders in whose names shares have been transferred. The decision of the Tribunal in the case of Rajinidevi A. Chowdhary has also been upheld by the jurisdictional High Court as taken note of by this Tribunal in the case of Shri Pinakin L. Shah [cited supra], to which one of us i.e. the Judicial Member, is a party. In these facts and circumstances of the case, we do not see any reason to interfere with the order of the CIT[A] and the same is upheld".
Page 3 of 4ITA No.1356 of 2010 Ravindrakumar Toshniwal Mumbai
5. Since the facts are similar to the earlier year and since assessee has furnished copy of the sale bills of the Talent Infoway Ltd and Buniyad Chemicals Ltd, and bank statements including purchase contract notes and balance sheet where investments were duly accounted as on 31.03.2004 and 31.03.2005, we agree with the order of the CIT (A). As AO also relied on the findings in assessment year 2005-06 and the learned CIT (A) also deleted the addition based on the same, we do not see any reason to interfere with the order of the CIT (A) as the issue was crystalised in earlier year in favour of assessee. Accordingly, the Revenue grounds are dismissed.
6. In the result appeal filed by the Revenue is dismissed.
Order pronounced in the open court on 13th March, 2013 Sd/- Sd/-
(Sanjay Garg) (B. Ramakotaiah)
Judicial Member Accountant Member
Mumbai, dated 13th March, 2013.
Vnodan/sps
Copy to:
1. The Appellant
2. The Respondent
3. The concerned CIT(A)
4. The concerned CIT
5. The DR, "D " Bench, ITAT, Mumbai
By Order
Assistant Registrar
Income Tax Appellate Tribunal,
Mumbai Benches, MUMBAI
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