Case Law Details
ITO Vs Ankit Agarwal (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT) Delhi has dismissed the revenue’s appeal against the CIT(A)-14, New Delhi’s order dated 24.09.2020 related to the assessment year 2011-12.
Background and Reasons for Dismissal
1. This appeal by the revenue challenged the validity of re-assessment proceedings in a case similar to that of Sh. Suresh Kumar Agarwal. The CIT(A)-14, New Delhi rejected these grounds, citing the validity of the reassessment proceedings.
2. The CIT(A) relied on the judgment of the Hon’ble ITAT, Delhi in the case of Suresh Kumar Aggarwal Vs. ACIT (supra) due to the similarity in the cases.
3. The CIT(A)-14, New Delhi observed that the share price had decreased to Rs. 12, but the assessee purchased shares at an average price of Rs. 35.22 per share. The highest price of M/s. Nouveau Global Ventures Ltd. rose to Rs. 205, while the assessee sold the investment at an average selling rate of Rs. 107.54 per share.
4. There was no suspicion in the shareholding pattern, as per the CIT(A)’s observation.
5. The shares were sold through a SEBI registered share broker on the online portal of BSE, with payments received through proper banking channels. STT, Service Tax, Stamp Duty, and other charges were duly paid for the transactions.
Conclusion and Tax Effect
The tax effect in this appeal was approximately Rs. 20 lakhs, falling under the purview of CBDT Circular No. 17/2019 dated 08.08.2019.
As a result, the ITAT Delhi dismissed the appeal by the revenue. However, if the AO believes that the appeal is not impacted by the CBDT circular, they may approach the Tribunal as per the provisions of the law.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the revenue is preferred against the order of the CIT(A)- 14, New Delhi dated 24.09.2020 pertaining to A.Y.201 1-12.
2. The grievance of the revenue read as under :-
1. Hon’ble ITAT had examined the validity of re-assessment proceedings in the case of Sh. Suresh Kumar Agarwal where facts were identical to the present case Ld. CIT(A)-14, New Delhi has rejected these grounds of appeal and held that the reassessment proceedings were validly initiated.
2. CIT(A) has mainly relied upon the judgment of the Hon’ble ITAT, Delhi in the case of Suresh Kumar Aggarwal Vs. ACIT (supra) citing the reason of being identical case.
3. CIT(A)-14, New Delhi has observed that share price had gone down to Rs. 12 but the assessee has purchased share at average price of Rs.35.22/ per share. The highest price of M/s. Nouveau Global Ventures Ltd. has risen to Rs.205 whereas the assessee has sold his investment at average selling rate of Rs. 107.54 per share.
4. CIT(A) has observed that there was no suspicion in the share holding pattern.
5. CIT(A) has observed that the shares were sold through SEBI registered share broker at online portal of BSE for which payment was received through proper banking channel and STT, Service Tax, Stamp Duty and other charges were paid on the transactions.
3. A perusal of the record show that the tax effect in the impugned appeal is around Rs.20 lacs and, therefore, this appeal is hit by CBDT Circular No. 17/20 19 dated 08.08.2019.
4. In the light of the CBDT circular and the aforementioned letter this appeal by the revenue is dismissed. However, should the AO feel that still the appeal is not hit by the aforementioned
5. In the light of the CBDT circular and the aforementioned letter this appeal by the revenue is dismissed. However, should the AO feel that still the appeal is not hit by the aforementioned circular of the CBDT he may approach the Tribunal as per the provisions of the law.
6. In the result, the appeal of the assessee is dismissed.
7. Decision announced in the open court on 17.05.2023.
