Principal Commissioner Of Income ... vs Satish Kumar Lakhmani
2022 Latest Caselaw 2819 Cal/2

OD - 3

                           IN THE HIGH COURT AT CALCUTTA
                         SPECIAL JURISDICTION (INCOME TAX)
                                   ORIGINAL SIDE

                                    ITAT/112/2022
                                  IA NO. GA/2/2022
                  PRINCIPAL COMMISSIONER OF INCOME TAX 9 KOLKATA
                                        Versus
                              SATISH KUMAR LAKHMANI

BEFORE :
THE HON'BLE JUSTICE T.S. SIVAGNANAM
            And
THE HON'BLE JUSTICE HIRANMAY BHATTACHARYYA
Dated : NOVEMBER 22, 2022.

                                                                           Appearance:
                                                                   Mr. Tilak Mitra, Adv.
                                                                         ...for appellant
                                                              Mr. Subhas Agarwal, Adv
                                                                       ...for respondent

The Court :- This appeal has been filed by the revenue under Section 260A of the

Income Tax Act, 1961 (the Act) is directed against the order dated 21.4.2021 passed by

the Income Tax Appellate Tribunal "C" Bench, Kolkata in ITA No.260/Kol/2019 for the

assessment year 2014-2015.

The revenue has raised the following substantial questions of law for

consideration :

"i] Whether the learned Tribunal has erred in facts and law and failed to

appreciate that the assessee could not substantiate the genuineness of the

transaction to prove that it had not in dubious share transaction meant to

account for undisclosed income in the garb of Long Term Capital Gain [LTGC] to

claim exemption under section 10[38] of the Act ?

ii] Whether the learned Tribunal has erred in fact and law while allowing the

assessee's appeal of claim of exemption under section 10[38] without holding that

the off line transaction of purchase and sale of shares of penny stock companies

namely Unno Industries Ltd. was adventure in nature of trade, thus same was to

be taxed as business income ?

iii] Whether the learned Tribunal has erred in fact and law in overlooking the

documentary evidence in depth and in light of conduct of the assessee and other

surrounding circumstances in order to see whether the assessee is liable to the

provisions of section 68 or not?"

We have heard Mr. Tilak Mitra, learned standing Counsel for appellant/revenue

and Mr. Subhas Agarwal, learned Advocate for the respondent.

We find from the order passed by the learned Tribunal that the assessee's appeal

had allowed following the decision of the Coordinate Bench of the learned Tribunal in the

case of Ritin Lakhmani & Ors. vs. Principal Commissioner of Income Tax 9, Kolkata in

ITA Nos. 41 to 47/Kol/2019 and allowed the appeal filed by the assessee. The revenue

had preferred the appeal against the said order before this court in ITAT No.127/2022

which was dismissed by judgment dated 22.11.2022. The operative portion of the order

reads as follows :

"In more or less identical circumstances in the case of Principal Commissioner of Income Tax, Durgapur Vs. M/s. Sinforte Pvt.Ltd. in ITAT No.104/2019 dated 7.1.2022 the court had dismissed the appeal filed by the revenue on the ground that the PCIT in order to exercise jurisdiction under section 263 of the Act himself exercised jurisdiction at the instance of the assessing officer which is against the provision of the law. This decision supports the case of the respondent assessee. Hence, for the above reasons, we are of the view that the order passed by the learned tribunal on the first ground, namely with regard to the correctness of the exercise of power under section 263 of the Act has to be affirmed and, accordingly, the appeal filed by the revenue is dismissed and the substantial question of law suggested by the revenue are not required to be decided in the instant case.

For the reasons set out by us above and, accordingly, the same are left open. "

Thus, following the above decision the appeal filed by the revenue is dismissed on

identical grounds as mentioned in the above quoted judgment and order.

The affidavit in reply filed in court today be kept with the record.

(T.S. SIVAGNANAM, J.)

(HIRANMAY BHATTACHARYYA, J.) Pkd/GH.