Case Number: ITA 384/DEL/2019
Appellant: Nishant Jain, Delhi
Respondent: ITO, Ward-52(3), New Delhi
Assessment Year: 2015-16
Case Filed On: 2019-01-18
Order Type: Final Tribunal Order
Date of Order: 2020-01-06
Pronounced On: 2020-01-06
The case ITA 384/DEL/2019 involves the appellant, Nishant Jain, Delhi, contesting the order passed by the Income Tax Officer (ITO), Ward-52(3), New Delhi, for the assessment year 2015-16. The appeal was filed on January 18, 2019, and the final order was pronounced on January 6, 2020. The Income Tax Appellate Tribunal (ITAT) upheld the CIT(A)’s order due to previous rulings on similar cases involving M/s Kappac Pharma Ltd.
The case was heard before the Delhi ‘SMC’ Bench of the Income Tax Appellate Tribunal (ITAT), New Delhi. The bench consisted of Shri H.S. Sidhu, Judicial Member.
The appeal filed by Nishant Jain is against the order dated November 1, 2018, passed by the Commissioner of Income Tax (Appeals)-18, New Delhi, for the assessment year 2015-16.
The Revenue, represented by Sh. Manoj Kumar Gupta, Sr. DR, argued that the issue regarding the shares of M/s Kappac Pharma Ltd. had already been adjudicated by the ITAT, Delhi Benches, in the case of Udit Kalra vs. ITO, which was decided in favor of the Revenue. The shares of M/s Kappac Pharma Ltd. were declared bogus, and this decision was upheld by the Hon’ble Delhi High Court.
The appellant, represented by Sh. Sanjay Gupta, CA, reiterated the grounds of appeal but did not produce any contrary order to counter the Revenue’s contention.
After hearing both parties and perusing the orders passed by the revenue authorities, including the ITAT order in the case of Udit Kalra vs. ITO, the tribunal found that the shares of M/s Kappac Pharma Ltd. had already been declared bogus by the ITAT and the Delhi High Court. The relevant portion of the High Court’s judgment is reproduced below:
The assessee is aggrieved by the concurrent findings of the tax authorities – including the lower appellate authorities rejecting its claim for a long-term capital gain reported by it, to the tune of Rs.13,33,956 and Rs.14,34,501 in respect of 4,000 shares of M/s Kappac Pharma Ltd. The assessee held those shares for approximately 19 months; the acquisition price was Rs.12 per share whereas the market price of the shares at the time of their sale, was Rs.720. It is contended that the assessee was not granted fair opportunity. Mr. Rajesh Mahna, learned counsel appearing for the assessee relied upon the orders of the co-ordinate Bench of the tribunal, in respect of the same company i.e. M/s Kappac Pharma Ltd., and pointed out that the tax authority’s approach in this case was entirely erroneous and inconsistent. The main thrust of the assessee’s argument is that he was denied the right to cross-examination of the individuals whose statements led to the inquiries and ultimate disallowance of the long-term capital gain claim in the returns which are the subject matter of the present appeal. This court has considered the submissions of the parties. Aside from the fact that the findings in this case are entirely concurrent – AO., CIT(A) and the ITAT have all consistently rendered adverse findings – what is intriguing is that the company (M/s Kappac Pharma Ltd.) had meagre resources and in fact reported consistent losses. In these circumstances, the astronomical growth of the value of company’s shares naturally excited the suspicions of the Revenue. The company was even directed to be delisted from the stock exchange. Having regard to these circumstances and principally on the ground that the findings are entirely of fact, this court is of the opinion that no substantial question of law arises in the present appeal. This appeal is accordingly dismissed.
Given the facts and circumstances of the present case and the judgment of the Hon’ble Delhi High Court in the case of Udit Kalra vs. ITO, the tribunal upheld the order of the CIT(A) and decided the issue against the assessee.
In the result, the appeal of the assessee is dismissed. The order was pronounced in the open court on January 6, 2020.
Dated: January 6, 2020
Asst. Registrar, ITAT, New Delhi
ITA 384/DEL/2019: Nishant Jain vs. ITO – Case Filed Due to CIT(A) Order
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