The Commissioner Of Income Tax-16 v. Mrs. Kesar A. Gada

P.C:-

1. This appeal by the Revenue under Section 260A of the Income Tax Act, 1961 (Act) challenges the order dated 8.8.2012 passed by the Income Tax Appellate Tribunal (Tribunal).

2. This appeal relates to Assessment Year 2006-07. The appellant-Revenue has formulated the following questions of law for our consideration:-

“(1) Whether on the facts and circumstance of the case and in law, the Tribunal Mumbai “H” Bench Mumbai was justified in upholding the appellant order bearing No. CIT(A)/27.ITO 16(2) (4)/249/08-09 dated 24.12.2009 wherein the CIT (A), Mumbai allowed the claim of the Assessee that the addition of Rs. 23,63,387/- made by the Assessing Officer as unexplained cash credit u/s. 68 of Income Tax Act, 1961, was received from share trading activities as L.T.C.G and entitled of exemption u/s.10(38) of Income Tax Act, 1961?

(2) Whether on the facts and circumstances of the case and in law, the Tribunal, Mumbai“H” Bench Mumbai was justified on relying the decision of Mr. Mukesh Ratilal Marolia decided by the Jurisdictional High Court of Bombay despite the fact the said decision had not been accepted by the department and SLP had been recommended to the CBDT?”

3. Briefly the facts leading to this appeal are that in the subject Assessment Year, the respondent had sold 1,25,000 shares of Maruti Infra Limited. The respondent - assessee thereafter filed its return of income declaring total income of Rs. 2.70 lakhs. Thereafter a revised return of income was filed wherein the respondents offered long time capital gain of Rs. 3.56 lakhs for taxation in respect of which STT has not been paid. The Assessing Officer disallowed the claim of the capital gain made by respondent - assessee and added the same as unexplained cash credit under Section 68 of the Act. The Assessing Officer also relied upon the statement of one Mr. Mukesh Chokshi that he had given various accommodation entries to various parties.

4. On first appeal, the Commissioner of Income Tax (Appeals) by his order dated 24.12.2009 allowed the respondent's appeal. The Commissioner of Income Tax (Appeals) observed that the Assessee-Respondent had provided to the Assessing Officer confirmation of Bombay Stock Exchange concerning total transaction of shares of Maruti Infra and also the fact that payments for sale of shares were received through banking channels. Moreover, it was also noticed that in his statement Mr. Chokshi had not mentioned the name of the respondent - assessee as one to whom accommodation entries were given. The Commissioner of Income Tax (Appeals) held that when the Assessing Officer does not challenge the purchase of shares, it was not correct to hold that the said sale was not genuine. The CIT (Appeals) relied on the decision of the Tribunal in the case of “Mukesh R. Marolia v. ACIT” and deleted the addition made under Section 68 of the Act by the Assessing Officer.

5. On further appeal, the Tribunal by the impugned order dismissed the Revenue's appeal. The impugned order follows the decision of this Court in the Case of “Mukesh R. Marolia” and records a finding that the facts therein are similar to the facts in the present case. Consequently, the impugned order holds that purchase and sale of the shares made by the respondent - assessee were genuine transaction and addition made under Section 68 of the Act by the Assessing Officer was not warranted.

6. We find that both, the CIT (Appeals) as well as the Tribunal have concurrently arrived at the conclusion that the transaction of purchase and sale of shares done by the respondent - assessee was genuine. Consequently, it was also held by both the Authorities that addition under Section 68 of the Act was not called for. We find that the impugned order has been passed relying upon the decision of this Court in the case of “Mukesh R. Marolia” and the findings are essentially the findings of facts. Hence, no substantial question of law arises for our consideration. We have not been shown that the impugned orders suffer from perversity which would warrant interference by this Court. Accordingly, the appeal is dismissed.