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07-01-2020, Sanjay Kaul, Section 68, 115BBE, 70, 69C, Tribunal Delhi

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1 week 4 days ago #12026 by amit
Section - 68, 115BBE, 70, 69C
Order Date - 07-01-2020
Favouring - Revenue
Court - Tribunal Delhi
Appellant - Sanjay Kaul
Respondent - ITO
Justice - H.S. SIDHU JM & O.P. KANT AM
Citation - 120Taxpundit82
Appeal No. - ITA No.1593/Del/2019
Asstt. Year - 2015-16

Order

PER : O.P. KANT, AM:

This appeal by the assessee is directed against order dated 14/01/2019 passed by the ld. Commissioner of Income-tax (Appeals)-8, New Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2015-16, raising following grounds:

A. Addition of Rs.1,22,76,352/-

BECAUSE the CIT(A)-08, New Delhi, has grossly erred both in law and on facts in denying the claim of set off of Short Term Capital Loss of Rs.1,22,76,352/- on sale of shares sold on recognized stock exchange and bringing to tax as unexplained credit under Section 68 of the Act.

2. BECAUSE the Ld. CIT (A) has erred in concluding without any basis that appellant has introduced his unaccounted income in the form of Short Term Capital Loss by manipulating the penny stock. This conclusion is absolutely perverse in as much as on account of Short Term Capital Loss the capital of the appellant stands depleted/ reduced. The inference by the Income-tax Officer as well as CIT (A) is perverse and against the common accounting principles.

3. BECAUSE the Ld. CIT (A) has also erred both in law and on facts in making an addition of Rs. 1,22,76,352/- being capital loss incurred by the appellant on sale of shares listed on recognized stock exchange as unexplained credit under Section 68 of the Act read with Section 115BBE of the Act.

4. BECAUSE by sustaining the aforesaid addition and denying the set off of loss under Section 70, the Ld. CIT (A) has failed to appreciate that appellant was owner of equity shares of listed companies which the appellant held for number of months and the same were sold on recognized stock exchange after payment of Securities Transaction Tax (STT), resulting into a Short Term Capital Loss and therefore, the Short Term Capital Loss incurred by the appellant on transfer of Short Term Capital Asset was to be set off against the Long Term Capital Gain accruing to the appellant under Section 70 of the Act.

5. BECAUSE the Ld. CIT (A) has failed to appreciate the evidence tendered by the appellant to support he claim of set off under Section 70, hence the findings mechanical y recorded on borrowed inference in disregard of evidence, based on irrelevant and extraneous considerations are misconceived and misplaced.

6. BECAUSE the Ld. CIT (A) has confirmed the above addition and denied the set off without confronting material/ investigation to the appellant and also providing cross examination of the parties on whose statement reliance has been placed in the Impugned order of assessment and therefore, the order, so made in disregard of principles of natural justice, is vitiated.

7. BECAUSE furthermore the Ld. CIT (A) has sustained the addition on mere speculation, generalized statements, theoretical assumptions, allegations and assertions, without there being any supporting evidence and is therefore, not in accordance with law.

8. BECAUSE the ld. CIT(A) has failed to appreciate that once the broker of the appellant viz. M/s Elite Wealth Advisors Ltd. had neither denied nor disputed the genuineness of the transactions, the conclusion arrived in the order is highly whimsical, arbitrary, illogical and wholly untenable.

9. BECAUSE the Ld. CIT (A) while sustaining the above addition has arbitrarily and mechanically rejected the explanation and evidence tendered by the appellant and made the additions and denied the set off by drawing subjective premeditated and preconceived inferences and therefore, the same is not sustainable.

10. BECAUSE various adverse findings and conclusions recorded by the Ld. CIT (A) are factually incorrect and contrary to record, legally misconceived and untenable.

B) Addition of Rs. 3,06,908/-.

1. BECAUSE on facts and in law and on grounds tak n and basis adopted the addition of Rs. 3,06,908/- under Section 69C read with Section 115BBE of the Act as being unexplained expenditur is unjustified, illegal and unwarranted. The Ld. CIT (A) has simply confirmed the addition holding the same as consequential in nature without application of mind and without passing a reasoned order The addition of Rs. 3,06,908/- therefore, on facts and in law is perver e, unjustified and illegal.

2. Briefly stated facts of the case are that the assessee filed return of income on 30/09/2015 declaring total income of Rs.3,12,59,350/-. The case was selected for scrutiny and notice under section 143(2) of the Income-tax Act, 1961 (in short ‘the Act’) was issued and served. The assessment under section 143(3) of the Act was completed on 27/12/2017. In the return of income filed, the assessee declared income under the “salary”, “Income from house property”, “income from business or profession”, “income from capital gain” and “income from other sources”. The assessee declared long-term capital gain of Rs.4,15,67,925/- on sale of unlisted shares. Against the long-term capital gain, the assessee set off “short term capital loss” on sale of shares of four companies, out of which short-term capital loss of Rs.1,22,76,352/- on sale of shares of following companies, was not allowed by the Assessing Officer holding the same as part of the accommodation entry business of providing “bogus long

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