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2018 (2) TMI 591 - AT - Income TaxLevying Income Tax @ 30% on Short Term Capital Gains on sale of shares as against 10% u/s. 111A of the Act as claimed by the Appellant - additional evidence acceptance - Held that - Assessee has actually paid the STT and the sale transaction took place after 1st October, 2004. However, the learned CIT-A has not at all considered this submission and has held that assessee has not filed any additional evidence. What sort of additional evidence learned CIT-A had in mind has not been spelt out. Assessee has made factual submission and these could have been verified from the assessment records. Hence the non-consideration of asseessee s submission and laconic dismissal of the plea by the learned CIT-A is not sustainable. Accordingly, remit the issue the file of learned CIT-A. Learned CIT-A is directed to consider the issue afresh keeping into account our observations as above and after giving the assessee proper opportunity of being heard. - Appeal by the assessee stands allowed for statistical purposes.
Issues involved:
1. Rectification of mistake under section 154 of the Income Tax Act. 2. Dispute regarding the levy of Income Tax on Short Term Capital Gains at 30% instead of 10% under section 111A of the Act. 3. Consideration of additional grounds challenging the validity of the order passed under section 154. Issue 1: Rectification of mistake under section 154 of the Income Tax Act: The assessing officer passed an order under section 154 of the IT Act, seeking to rectify the tax levy on Short Term Capital Gains. The appellant contested this order, arguing that the entire capital gains were under Short Term Capital Gains u/s. 111A, as securities transaction tax (STT) had been paid on shares sold after October 2004. The assessing officer justified the amendment under section 154, citing that STCG should be levied at 30% instead of 10% due to sales being in September 2004. The Commissioner of Income Tax (Appeals) upheld the assessing officer's decision, noting the absence of a reply from the appellant during the proceedings. However, the ITAT found the dismissal by the CIT-A unsustainable, emphasizing that the appellant's submission regarding STT payment and sale transactions post-October 2004 was not adequately considered. Consequently, the issue was remitted to the CIT-A for a fresh review, emphasizing proper consideration and opportunity for the appellant. Issue 2: Dispute regarding the levy of Income Tax on Short Term Capital Gains at 30% instead of 10% under section 111A of the Act: The appellant contended that the tax levy at 30% on Short Term Capital Gains was erroneous, as STT had been paid on shares sold post-October 2004, warranting taxation at 10% under section 111A. The CIT-A dismissed the plea due to the absence of a reply from the appellant during proceedings. However, the ITAT found this dismissal unjustified, highlighting the appellant's submission and the need for proper consideration. The ITAT directed the CIT-A to reevaluate the issue, emphasizing the appellant's factual submission regarding STT payment and sale transactions post-October 2004, requiring a fair opportunity for the appellant to be heard. Issue 3: Consideration of additional grounds challenging the validity of the order passed under section 154: The appellant raised additional grounds challenging the validity of the order passed under section 154, citing procedural irregularities and legal flaws. These grounds were not presented before the CIT-A but were deemed admissible by the ITAT as they pertained to legal issues requiring no further factual investigations. The ITAT remitted these additional grounds to the CIT-A for proper consideration, emphasizing the need for a fair hearing and examination of the legal issues raised by the appellant. This detailed analysis of the judgment provides insights into the key issues addressed by the ITAT in the context of rectification of mistakes under section 154 and the dispute over the tax levy on Short Term Capital Gains, along with the consideration of additional grounds challenging the validity of the order passed.
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