2017 (4) TMI 1263 - AT - Income Tax

Treatment of long term capital gains as cash credit u/s 69C - Held that - On perusal of the orders of the Revenue Authorities as well as the cited decision of the Tribunal in the case of Sri Indravadan Jain HUF (2016 (7) TMI 16 - ITAT MUMBAI), I find, the said decision of the Tribunal applies to the instant appeals of the assessees and there is no case for confirming the said addition in both the cases. The additions made u/s 69C of the Act stand deleted. Therefore, I direct the Assessing Officer to accept the claims of the assessee - Decided in favour of assessee.

Summary

Issues:
- Treatment of long term capital gains as cash credit u/s 69C of the Act
- Validity of re-assessment

Analysis:
1. Treatment of long term capital gains as cash credit u/s 69C of the Act:
- The appeals under consideration pertain to two different assessees for the AY 2005-06, with identical issues raised. Both appeals are clubbed and disposed of together.
- In one appeal, there was a delay of 2 days in filing the appeal before the Tribunal, which was condoned due to the smallness of the delay.
- The common issue raised in both appeals was the treatment of long term capital gains as cash credit u/s 69C of the Act. The validity of re-assessment was also questioned but dismissed as not pressed.
- The assessee's argument was that shares were purchased at a certain price and sold later at a higher price, involving a broker. There was no investigation into the transaction by any agencies.
- The Tribunal had previously deleted similar additions in a related case, citing violations by the broker. The CIT (A) was criticized for not following the Tribunal's order in the related case.
- After considering the arguments and previous Tribunal decisions, the Tribunal found no basis for confirming the additions u/s 69C of the Act. The additions were deleted, and the Assessing Officer was directed to accept the claims of the assessees based on the previous Tribunal decision.

2. Validity of re-assessment:
- While the validity of re-assessment was raised, it was not pressed and dismissed as such.

The Tribunal allowed both appeals of the assessees based on the covered nature of the issues and the previous Tribunal decision. The orders were pronounced in favor of the assessees, directing the Assessing Officer to accept their claims and the previous Tribunal decision.