Case Number: ITA 2466/DEL/2022
Appellant: Jai Hari Investment, New Delhi
Respondent: ITO, Ward 52(1), New Delhi
Assessment Year: 2019-20
Case Filed on: October 4, 2022
Order Type: Final Tribunal Order
Date of Order: May 18, 2023
Pronounced on: May 18, 2023
The case involves an appeal by Jai Hari Investment against the order of the National Faceless Appeal Centre (NFAC), Delhi. The main issue in the appeal is the addition of Rs.19,15,525, which the assessee claimed as exempt income from long-term capital gains on sale of shares where Security Transaction Tax (STT) was paid.
The Centralized Processing Centre (CPC) adjusted the income declared by the assessee by adding back the amount claimed as exempt, because it was not shown in the appropriate column of the return of income. The first appellate authority upheld this addition. The appellant argued that due to the absence of a specific column for STT paid long-term capital gains in the return form, the exempt income was not listed in Schedule E1 but was nonetheless declared.
The Tribunal noted that the assessee had indeed mentioned the STT paid and the associated exempt income in the tax return. It held that denying the exemption merely because it was not recorded in a specific column was overly technical and not justified. The Tribunal deleted the addition, recognizing the income as exempt. It directed the Assessing Officer to verify the assessee’s claim further and adjust accordingly.
This case highlights the importance of accurate form filling and the recognition of genuine claims of exempt income despite technical errors in tax return submissions. It emphasizes that tax authorities should consider the substance over form, especially when the factual basis of an exemption claim is undisputed. This decision is a significant relief for taxpayers facing similar technical challenges.
The order was pronounced in the open court, underlining the transparency and procedural thoroughness of the Tribunal’s process.
Jai Hari Investment vs. ITO, Ward-52(1): Exempt Income Dispute for AY 2019-20
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