Income Tax Appellate Tribunal - Chennai
Nainimal Jain Anita, Chennai vs Ito, Non Corp Ward 10(1), Chennai on 18 June, 2019
आयकर अपील य अ धकरण, 'सी' यायपीठ, चे नई।
IN THE INCOME TAX APPELLATE TRIBUNAL
'C' BENCH: CHENNAI
ी जॉज माथन, या यक सद य एवं
ी एस. जयरामन, लेखा सद य के सम&
BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND
SHRI S. JAYARAMAN, ACCOUNTANT MEMBER
आयकर अपील सं./ITA No.384/Chny/2019
नधारण वष /Assessment Year: 2015-16
Smt. Nainimal Jain Anitha, Vs. The Income Tax Officer,
No.16, Dr. Algappa Road, Non-Corporate Ward-10(1),
Purasawakkam, Chennai-600 084. Room No.619, 6th Floor,
Wanaparthy Block, No.121,
[PAN: AAEPK 9144 M] M.G.Road, Chennai34.
(अपीलाथ(/Appellant) ()*यथ(/Respondent)
अपीलाथ( क+ ओर से/ Appellant by : Mr.D.Anand, Adv.
)*यथ( क+ ओर से /Respondent by : Mrs.D.Rohini, JCIT
सुनवाई क+ तार ख/Date of Hearing : 18.06.2019
घोषणा क+ तार ख /Date of Pronouncement : 18.06.2019
आदे श / O R D E R
PER GEORGE MATHAN, JUDICIAL MEMBER:
This is an appeal filed by the assessee against the Order of the Commissioner of Income Tax (Appeals)-12, Chennai, in ITA No.136/CIT(A)-12/2017-18 dated 28.12.2018 for the AY 2015-16.
2. Mrs.D.Rohini, JCIT, represented on behalf of the Revenue and Mr. D.Anand, Adv.represented on behalf of the assessee. ITA No.384/Chny/2019
:- 2 -:
3. It was submitted by the Ld.AR that the assessee had purchased shares of M/s.Sulabh Engineers and Services Ltd., through M/s. National Securities Depository Limited. The purchases had been made on 02.11.2012 and between 17.06.2014 and 08.07.2014. Security Transaction Tax (in short "STT") was also paid. The same was sold through the BSE and STT was also paid. It was a submission that the AO on the ground that he had received certain report from the Directorate of Investigation, Kolkata, wherein, organized racket of generating bogus entries of long term capital gains exempt from tax had been found, treated the transaction done by the assessee as bogus and non-genuine and consequently, disallowed the claim of exemption u/s.10(38) of the Act and treated the same as undisclosed income u/s.68 of the Act. It was a submission that the transactions had been done by the assessee between 2012 and 2014 and the assessee's transactions were done through online transactions through BSE and on which STT had already been paid. Neither the assessee's name nor the assessee's broker name appeared in any of the investigation reports in respect of the racket for generating bogus entries. It was a submission that M/s.Sulabh Engineers and Services Ltd., had come under scrutiny. Admittedly, it was a submission that the assessees herein had no connection either with the directors or Managing Directors, or anybody in the companies. It was a submission that subsequently, the company has been removed from the so called investigation list, and their shares are even now traded in the Stock Exchange as no adverse inference has been drawn in respect of the ITA No.384/Chny/2019 :- 3 -:
transactions. Only on pure suspicion, the assessee's transaction had been treated as bogus transaction. It was a submission that this is not a case of penny stock. It was a further submission that the claim of assessee may be allowed.
4. In reply, the ld.D.R submitted that the assessee had made substantial profits on purchase and sale of shares in a very short period and it is nothing, but penny stock. The ld.D.R submitted that the issue in this appeal was now squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the case of Shri Heerachand Kanunga for assessment years 2010-11 & 2011-12 in ITA Nos.2786 & 2787/Mds/2017 vide order dated 03.05.2018. It was a prayer that on identical directions, the issue in these appeals can also be restored to the file of the AO.
5. We have considered the rival submissions. A perusal of the assessment order clearly shows that this is not a case where the AO has been able to point out where the assessee has made a bogus claim of long term capital gains exempt u/s.10(38) of the Act. Further, perusal of the assessment order clearly shows that from page-2, para-4 to para 34, the AO has only made allegation in respect of the company and the modus operandi of the bogus claim u/s.10(38) of the Act. The evidences clearly show that the transactions of purchase and sale of the shares by the assessee herein are through BSE by paying STT. This is not a case for off-
line purchase, nor is the case of direct purchase. Neither is the assessee's ITA No.384/Chny/2019 :- 4 -:
name coming out in the Investigation report, which has been received by the AO from Directorate of Investigation, Kolkata. This being so, the claim of assessee cannot be disallowed merely on presumptions and the AO is directed to grant the assessee benefit of exemption u/s.10(38) of the Act as claimed in respect of long term capital gains generated by purchase and sale of shares of M/s.Sulabh Engineers and Services Ltd., as claimed by the assessee.
6. In the result, the appeal filed by the assessee is allowed.
Order pronounced in the Open Court on the 18th day of June, 2019, in Chennai.
Sd/- Sd/-
(एस. जयरामन) (जॉज माथन)
(S. JAYARAMAN) (GEORGE MATHAN)
लेखा सद य/ACCOUNTANT MEMBER या यक सद य/JUDICIAL MEMBER
चे नई/Chennai,
2दनांक/Dated: 18th June, 2019.
TLN
आदे श क+ ) त3ल4प अ5े4षत/Copy to:
1. अपीलाथ(/Appellant 4. आयकर आयु6त/CIT
2. )*यथ(/Respondent 5. 4वभागीय ) त न ध/DR
3. आयकर आयु6त (अपील)/CIT(A) 6. गाड फाईल/GF