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2019 (11) TMI 547 - AT - Income TaxGain on sale of shares - capital gain - 3rd round of litigation before us - direction of ITAT, the AO was to verify whether the assessee has sold the shares of TOL in the assessment year under consideration or in the AY 2007- 08 - HELD THAT - Assessee has not filed the copy of the bank statement for the AY 2007-08 depicting the purchase sale of shares of TOL as desired by the Authorities below. However, none of the authorities below has pointed out any defect in the submission filed by the assessee in the paper book listed above. Besides the above, we also note that there was single deposit in the bank account of the assessee for ₹ 3,86,192.00 in the AY 2001-02 representing the sale proceeds of shares but the same was reflected twice as the impugned cheque bearing no. 765816 was dishonored in the first time as evident from the copy of the bank statement placed on page 29 of the PB. However, the AO has wrongly considered the deposits of cheque twice against the sale of shares which is contrary to the facts available on record. This fact can be verified from the bank statement placed in the paper book. Thus we hold that the authorities below have made the addition for the sale of shares of TOL on wrong assumption of facts. On a question to the ld. DR about the source of information for the sale of shares of TOL in the AY 2001- 02 (under consideration), he failed to bring anything on record contrary to the arguments advanced by the ld. AR for the assessee. We also find that the authorities below were in possession of the information about the brokers involved in the sale and purchase of shares but none of them has taken any confirmation from them. There was no ambiguity in the direction of the ITAT as discussed above to verify the purchase and sale of shares of TOL but the AO in his assessment order has held that the assessee has not declared the sale of shares of M/s ATN International Ltd. resulting bogus long-term capital gain of 3,64,422.00 though there was no such direction in the order of the ITAT. Therefore, we are of the view that the authorities below have exceeded the direction issued by the ITAT which is unwanted. We are not convinced with the findings of the Ld. CIT (A) and accordingly direct the AO to delete the addition made by him. Hence the ground of appeal of the assessee is allowed.
Issues Involved:
1. Verification of the addition on account of the sale of shares of Tripex Overseas Ltd. in the Assessment Year (AY) 2007-08. 2. Determination of whether the sale proceeds of shares were taxed in AY 2007-08 or AY 2001-02 to avoid double taxation. 3. Evaluation of the evidence and details provided by the assessee regarding the sale of shares. 4. Compliance with the directions of the Income Tax Appellate Tribunal (ITAT) by the Assessing Officer (AO). Issue-wise Detailed Analysis: 1. Verification of the Addition on Account of the Sale of Shares of Tripex Overseas Ltd. in AY 2007-08: The primary issue raised by the assessee was that the Learned Commissioner of Income Tax (Appeals) [Ld. CIT(A)] erred in upholding the AO's order without verifying if the sale of Tripex Overseas Ltd. (TOL) shares was considered in AY 2007-08. The ITAT had previously directed the AO to verify whether the sale proceeds of TOL shares were taxed in AY 2007-08 and not in AY 2001-02. The AO was instructed to ensure that there was no double taxation. The AO, however, dismissed the assessee's claim, stating that the assessee failed to provide the necessary bank statements showing the payment and receipt for the purchase and sale of TOL shares. 2. Determination of Whether the Sale Proceeds of Shares Were Taxed in AY 2007-08 or AY 2001-02 to Avoid Double Taxation: The ITAT had directed the AO to verify if the sale proceeds of TOL shares were taxed in AY 2007-08. The AO, however, added the long-term capital gain to the income for AY 2001-02, arguing that the assessee did not declare the sale of shares of M/s ATN International Ltd., resulting in a bogus long-term capital gain. The Ld. CIT(A) upheld the AO's order, noting that the assessee failed to furnish the required details to verify whether the shares sold in AY 2007-08 were the same as those sold in AY 2001-02. 3. Evaluation of the Evidence and Details Provided by the Assessee Regarding the Sale of Shares: The assessee argued that the shares of TOL were sold in AY 2007-08 and the gain was already taxed. The assessee provided evidence, including the contract note cum bill for the purchase and sale of shares, and a bank statement showing a single deposit of ?3,86,192 in AY 2001-02, which was reflected twice due to a dishonored cheque. The ITAT noted that the authorities below did not point out any defects in the submissions filed by the assessee and wrongly considered the deposits of the cheque twice against the sale of shares. 4. Compliance with the Directions of the ITAT by the AO: The ITAT found that the AO and the Ld. CIT(A) exceeded their directions by considering the sale of shares of M/s ATN International Ltd., which was not part of the ITAT's directive. The ITAT emphasized the importance of judicial discipline and adherence to the directions of higher appellate authorities, citing judgments from the Hon'ble Supreme Court and the Hon'ble Delhi High Court. The ITAT concluded that the authorities below did not follow the ITAT's directions and made additions based on incorrect assumptions. Conclusion: The ITAT held that the authorities below made the addition for the sale of shares of TOL based on incorrect assumptions and exceeded the ITAT's directions. The ITAT directed the AO to delete the addition made, thereby allowing the appeal of the assessee. The order emphasized the necessity for revenue officers to follow the decisions of appellate authorities to avoid undue harassment to the assessee and maintain judicial discipline.
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