9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (11) TMI 31 - AT - Income TaxComputation of Capital Gains - Disallowance of sum paid for the share certificate of the property - whether the assessee has incurred an expense by way of share certificate obtained from the society namely Om Dharam Jivan Association where the assessee was holding property? - HELD THAT - Claim of the assessee does not depend upon the confirmation from the third party. The assessee as such has furnished share certificate which is primary document mentioning the payment of ₹ 5000.00. This fact has not been doubted by the authorities below - in the absence of the confirmation from the 3rd party the assessee is not disentitled for claiming the deduction of the impugned expenditure. The certificate issued by the society, Om Dharam Jivan Association, has direct nexuses with the property held by the assessee. This share certificate has no independent value in its self. This share certificate is transferable only along with the property in dispute. Therefore, the cost incurred on such share certificate can be treated as part of the cost of the property - the assessee was holding a property in the society Om Dharam Jivan Association and this fact was also admitted by the AO in his remand report. Therefore in our considered view the share certificate issued by the society, Om Dharam Jivan Association, cannot be doubted being closely connected with the impugned property - direct the AO allow the claim to the assessee Short-term capital gain - Assessee in the year under consideration has sold the shares of L T - HELD THAT - AO during the remand proceedings obtained an information from the broker namely Rajvee stock broking Ltd wherein it was confirmed that the assessee has incurred a loss of ₹ 674/- in respect of sale purchase of the shares of L T. AO in the remand report objected on the admission of the additional evidences on the ground that the case of the assessee does not fall in any of the exception as specified under rule 46A of Income Tax Rule. CIT (A) has observed that the assessee has dealt in 45 scripts but the broker has furnished the details with respect to 6 scripts only. On perusal of the reply of the broker placed on pages 7 and 8 of the paper book we note that the assessee has dealt only in 6 scripts. As such, the learned CIT (A) has not brought any information on record suggesting that the assessee has dealt in 45 scripts. From the above, we conclude that the assessee has incurred losses on the sale purchase of L T shares amounting to ₹ 674/- and as a whole for all the scripts he has earned a profit of ₹ 2,250/- only. - There cannot be any addition to the total income of the assessee on account of sale of shares of L T for the reasons as discussed above. Regarding the allegation of the learned CIT (A) about the source of investment in the shares, we note that there was there was no such show cause notice issued to the assessee explaining the source of investment. Therefore there cannot be any addition on account of source of investment without showing a show cause notice to the assessee for his explanation. - Decided in favour of assessee.
Issues Involved:
1. Ex-parte order under Section 147 read with Section 144 of the Income Tax Act, 1961. 2. Reopening of assessment under Section 148 before the original assessment was time-barred under Section 153. 3. Disallowance of ?5000 paid for the share certificate of the property. 4. Addition of ?5,65,185 for alleged short-term capital gain from dealings in shares. Detailed Analysis: Ex-parte Order and Reopening of Assessment: - Issue: The assessee contended that the Assessing Officer (AO) erred in passing an ex-parte order under Section 147 read with Section 144 without providing an effective opportunity of being heard, and in reopening the assessment under Section 148 before the original assessment was time-barred under Section 153. - Decision: The assessee's representative did not press these grounds. Consequently, these issues were dismissed as not pressed. Disallowance of ?5000 for Share Certificate: - Issue: The assessee challenged the disallowance of ?5000 paid for the share certificate of the property. - Facts: The assessee sold a property for ?7,11,000, while the stamp value was ?19,50,760. The AO treated the entire stamp value as income due to the absence of cost of acquisition details. The assessee later claimed a cost of acquisition of ?1,99,000 and an additional ?5000 for the share certificate. - CIT(A) Decision: The CIT(A) accepted the cost of acquisition but disallowed the ?5000 due to insufficient documentary evidence. - Tribunal Decision: The Tribunal found that the assessee provided a share certificate worth ?5000 from Om Dharam Jivan Association, which was not doubted by the authorities. The Tribunal held that the share certificate cost should be considered part of the property's cost and allowed the deduction, setting aside the CIT(A)'s order. Addition of ?5,65,185 for Short-term Capital Gain: - Issue: The assessee contested the addition of ?5,65,185 as short-term capital gain from share dealings. - Facts: The AO noted that the assessee sold shares worth ?5,65,185 but did not provide the cost of acquisition, treating the entire amount as income. The assessee claimed a profit of ?2,250 from share trading and provided supporting documents. - CIT(A) Decision: The CIT(A) confirmed the AO's addition, stating the assessee did not disclose all transactions and failed to explain the source of investment. - Tribunal Decision: The Tribunal found that the assessee dealt in only 6 scripts, not 45 as suggested by the CIT(A). The Tribunal concluded that the assessee incurred a loss of ?674 on L&T shares and a total profit of ?2,250 from all scripts. The Tribunal held that there could be no addition for the sale of L&T shares and no addition for the source of investment without prior notice to the assessee. The Tribunal reversed the lower authorities' orders and allowed the assessee's appeal. Conclusion: - The appeal concerning the ex-parte order and reopening of assessment was dismissed as not pressed. - The Tribunal allowed the deduction of ?5000 for the share certificate, reversing the CIT(A)'s decision. - The Tribunal also allowed the appeal regarding the addition of ?5,65,185, finding no basis for the addition and reversing the lower authorities' decisions. Order Pronounced: The appeal of the assessee was allowed in its entirety.
|
