Case Law Details
Ashokbhai Shankerlal Shah Vs ITO (ITAT Ahmedabad)
In Ashokbhai Shankerlal Shah vs ITO, the ITAT Ahmedabad adjudicated a dispute concerning an addition of ₹29,26,692, including capital gains of ₹27,61,030 from shares of M/s Looks Health Services Limited and a 6% commission under Section 69C. The assessee challenged the assessment order passed under Sections 147 and 144B, alleging procedural irregularities, including insufficient time for response and decisions made without proper consideration of evidence.
The assessee argued that the shares were sold through a demat account and provided necessary details, disputing the unexplained investment claim. Additionally, it was contended that the AO relied on “borrowed satisfaction” without directly implicating the appellant in counterparty transactions. The ex parte assessment, claimed to violate principles of natural justice, was further criticized for lacking a fair opportunity for the assessee to present their case.
During the hearing, both parties acknowledged that the issues in the appeal were covered by a prior ITAT order in a similar case. The Tribunal, finding no material changes in the factual or legal context, ruled in favor of the assessee, allowing the appeal and quashing the additions made by the AO.
This case underscores the importance of adhering to procedural fairness and careful evaluation of evidence in tax assessments, particularly concerning capital gains and unexplained investments.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, vide order dated 20.05.2024 passed for the Assessment Year 2014-15.
2. The Assessee has taken the following grounds of appeal:-
[1] The Ld. CIT (A) has grievously erred in upholding the addition made by the Ld. A. O. of Rs. 27,61,030/- being the capital gain of Rs. 27,61,030/- incurred in the script M/s Looks Health Services Limited and 6% commission u/s 69C is Rs. 1,65,662/- is incorrect.
The appellant has not been provided enough opportunity as a time of 2 days was given and the date provided by the Ld. A. O. is the national holiday or even the adjournment not taken up and so the order passed u/s 147 r.w.s 144B is incorrect.
[2] The Ld. A.O puts the observation of the counter parties transactions but in the list no name of the appellant provided and so the assessment finalized with borrowed satisfaction and even not applying his mind and found any documentary evidence.
[3] The Ld. A.O. has made an addition on account of the unexplained investment as the share are sold through d-mat account and all necessary details are provided and so there is no question of unexplained.
[4] That having regard to the facts and circumstances of the case, the Ld. Assessing Officer has erred both on facts and in law in deciding the assessment ex parte in violation of the principles of natural justice and without granting to the appellant a fair, proper and meaningful opportunity and the findings of the Ld. Assessing Officer that the appellant is not serious and sincere to pursue the case is wholly incorrect.
[5] That the Ld. Assessing Officer has misdirected himself in law in initiating penalty under section 271 (1)(c) on amount Rs. 29,26,692/- and his order is thus prima facie devoid of merits and contrary to law and needs to be quashed and prayed for accordingly and the interest u/s 234A and 234B is not legal.
[6] The appellant therefore requests your good self to kindly delete the above- mentioned additions of Rs 29,26,692/- made by the Ld. A. O. looking to the merits of the case.
[7] The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.
3. At the outset, both the parties fairly submitted that the issue taken up by the assessee in the appeal before us has been squarely covered by the order of the Tribunal in ITA No.417/Ahd/2019 dated 08.12.2023.
4. We have gone through it and find that the submission of both the parties are tenable. For the sake of ready reference please press here. (hyperlink provided)
5. In the absence of any change in factual matrix and legal proposition brought to our notice, the appeal of the assessee is hereby allowed.
6. In the result, the appeal of the assessee is allowed.
This Order pronounced in Open Court on 22.11.2024
Author Bio
