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TMI Blog2015 (12) TMI 1368X X X X Extracts X X X X X X X X Extracts X X X X ..... i Monal Y. Thakkar and Smt. Reetaben R. Thakkar [2015 (7) TMI 913 - ITAT AHMEDABAD ] we are of the opinion that the sum of ₹ 2,20,76,842/- is to be excluded from the assessee’s income. We order accordingly and hold that only the sum of ₹ 34,12,218/- is to be assessed in the hands of the assessee in the year under consideration. We express no opinion about the finding of the CIT(A) that the sum of ₹ 2,20,76,842/- is to be assessed as business income because since we have held that on account of disgorgement the sum of ₹ 2,20,76,842/- is not to be assessed in the hands of the assessee. Once the amount is not to be taxed because it has already been recovered by the SEBI and there is no real income in the hands of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n treating ₹ 34,12,218/- arising out of share transaction as short term capital gain and directing the Assessing Officer to tax surplus of ₹ 34,12,218/- as per provision of Section 111A. 3. In the assessee s appeal, as per the concise grounds of appeal, following grounds are raised:- 1. In law and in the facts and circumstances of the appellant's case, the learned CIT(A) has grossly erred in dismissing Ground No.1 of the appellant's appeal before him challenging the validity of the assessment order impugned before him, as being general in nature and not requiring any adjudication. 2. Without prejudice to the foregoing, in law and in the facts and circumstances of the appellant's case, the learned CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment order, was not pressed at the time of hearing before us; accordingly, the same is rejected. 5. Ground Nos. 2 3 of the assessee s appeal and the only ground in the Revenue s appeal are interrelated and therefore, they are being considered together and are being adjudicated as under. 6. The facts of the case are that, during the year under consideration, the assessee declared income of ₹ 2,54,93,059/- as Short Term Capital Gain. During the course of assessment proceedings, the assessee claimed that out of the short term capital gain of ₹ 2,54,93,059/-, a sum of ₹ 2,20,76,842/- is recovered by SEBI as disgorgement of the capital gain earned by the assessee. Therefore, he claimed before the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound Nos. 2 3 of the assessee s appeal are covered in favour of the assessee by the decision of ITAT, Ahmedabad Bench in the case of Shri Monal Y. Thakkar and Smt. Reetaben R. Thakkar vide ITA Nos. 573 and 574/Ahd/2010. In the said case, the ITAT held as under:- 16. We have duly considered rival contentions, and gone through the record carefully. From the findings of the SEBI, it is implicit clear that both the assessees have indulged in violation of SEBI regulations, while making investments in IPOs. Whatever amounts they have illegally earned, which could be assessed as their income, has been taken away from them. They have already disgorged the amount, though, the payment was made after the close of accounting year, and even after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come. We order accordingly and hold that only the sum of ₹ 34,12,218/- is to be assessed in the hands of the assessee in the year under consideration. 9. Now, we come to the assessability of the head under which the sum of ₹ 34,12,218/- is to be assessed. We express no opinion about the finding of the CIT(A) that the sum of ₹ 2,20,76,842/- is to be assessed as business income because since we have held that on account of disgorgement the sum of ₹ 2,20,76,842/- is not to be assessed in the hands of the assessee. Once the amount is not to be taxed because it has already been recovered by the SEBI and there is no real income in the hands of the assessee, the question of the head under which it is to be assessed could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Purohit 29 SOT 117, which supports the appellant's explanation. The other judicial decisions relied upon by the A.R. are also supporting its explanation. In the circumstances, merely because the appellant has sold the shares which were purchased in the booming period and it earned surplus by way of capital gain, the Assessing Officer was not justified in holding it as a business profit. He is directed to tax such surplus of Rs,34,12,218/-as short term capital gain as per provisions of section 111 A. 10. After considering the facts of the case and arguments of both the sides, we do not find any infirmity in the above conclusion of the CIT(A). At the time of hearing before us, the ld. Departmental Representative did not point out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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