Mahesh Kumar Khetan v. ACIT, Circle 1, Nizamabad
[Citation -2019-LL-0920-64]

Citation 2019-LL-0920-64
Appellant Name Mahesh Kumar Khetan
Respondent Name ACIT, Circle 1, Nizamabad
Court ITAT-Hyderabad
Relevant Act Income-tax
Date of Order 20/09/2019
Assessment Year 2014-15
Judgment View Judgment
Keyword Tags outstanding demand • sale of shares • stock exchange • penny stock • stay petition • stay of demand of tax • disallowance of capital gain • genuineness of transaction
Bot Summary: The Ld. Counsel for the assessee submitted that the demand in these cases has arisen due to disallowance of long term capital gain which has arisen on account of sale of shares of the scrip of Kailash Auto Finance Ltd. treating it to be a penny stock case. It is also submitted that the assessees have already paid nearly 20 of outstanding demand of taxes. Opposed the grant of stay and submitted that the assessee should be directed to pay at least 50 of the outstanding demand of taxes. Having regard to the rival contentions and material placed on record, particularly with regard to the fact that the AO had made the disallowance relying upon the SEBI s interim direction and since the SEBI s interim order is revoked after investigation into genuineness of the pricing and volume of M/s Kailash Auto Finance Ltd. Scrips, we are inclined to grant stay in favour of the Assessee. In order to secure the interest of revenue, we deem 2 S.A.Nos. 2019 AY 2014-15 S/Shri Mahesh Kumar Khetan, Sh. Vikrant Kumar Khetan and Sh. Dhiraj Kuhar Khetan, Adilabad it fit and proper to direct the assesses to pay a further of 10 of outstanding demand of taxes on or before 30th September, 2019, and the stay is granted for a period of 90 days from the date of this order. In the result the Stay Applications of assesses are allowed.


IN INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH : Hyderabad Before Smt. P. Madhavi Devi, Judicial Member And Shri A. Mohan Alankamony, Accountant Member S.A.No.211/Hyd./2019 (In ITA No. 2391/Hyd./2018) Assessment Year: 2014-15 Sh. Mahesh Kumar Khetan vs. ACIT, Circle 1 Prop. Venkatesh Cotton Corporation Nizamabad D.No. 4-3-18/56, Ambedkar Chowk Adilabad 504 001 PAN: AAWPK2620E S.A.No.212/Hyd./2019 (In ITA No. 2392/Hyd./2018) Assessment Year: 2014-15 Sh. Vikrant Kumar Khetan vs. ACIT, Circle I Prop. M/s Salasar Balaji Oil Industries Nizamabad D.No. 4-3-18/56, Ambedkar Chowk Adilabad 504 001 PAN: AAWPK2621F S.A.No.213/Hyd./2019 (In ITA No. 2393/Hyd./2018) Assessment Year: 2014-15 Shri Dhiraj Kumar Khetan vs. ITO, Ward I Prop. Venkatesh Fibre Corp. Adilabad D.No.4-3-18/56, Ambedkar Chowk Adilabad 504 001 PAN: AAWPK2634C (Appellant) (Respondent) For Assessee: Sh. T.S. Ajai, A.R. For Revenue: Sh. Sunku Srinivas, D.R. Date of Hearing : 13/09/19 Date of Pronouncement : 20/09/19 ORDER Per Smt. P. Madhavi Devi, J.M. These Stay Applications are filed by respective assessees seeking stay of recovery of outstanding demand of taxes of Rs.1,06,86,751/-, Rs.2,20,14,331/- and Rs.2,27,93,250/- respectively. S.A.Nos.211, 212 and 213/Hyd./2019 AY 2014-15 S/Shri Mahesh Kumar Khetan, Sh. Vikrant Kumar Khetan and Sh. Dhiraj Kuhar Khetan, Adilabad 2. Ld. Counsel for assessee submitted that demand in these cases has arisen due to disallowance of long term capital gain which has arisen on account of sale of shares of scrip of Kailash Auto Finance Ltd. treating it to be penny stock case. He submitted that SEBI had made preliminary examination into dealings in scrip of Kailash Auto Finance Ltd. from January 17, 2013 to December 31, 2015 pursuant to unusual price movement and volume in scrip of said company from Stock Exchange and initially had granted ex-parte interim order restraining dealings in scrips of said company. He submitted that subsequent to detailed investigation, SEBI has revoked interim order by holding that investigation conducted by SEBI did not find any adverse evidence/adverse finding in respect of violation of provisions of PFUTP Regulations in respect of Kailash Auto Finance Ltd. and others warranting continuation of action u/s 11 B read with S.11(4) of I.T. Act, 1961. He submitted that AO had disallowed capital gain by taking into consideration SEBI s interim directions and since said authority had revoked interim order, genuineness of transaction of M/s Kailash Auto Finance Ltd. is established and, therefore, disallowance is not called for. He thus submitted that assessees have prima facie case and balance of convenience in their favour. He submitted that if assesses are directed to make payment of entire outstanding taxes, assesses would suffer irreparable loss. It is also submitted that assessees have already paid nearly 20% of outstanding demand of taxes. He thus prayed for stay of recovery of outstanding demand. 3. Ld.DR however, opposed grant of stay and submitted that assessee should be directed to pay at least 50% of outstanding demand of taxes. 4. Having regard to rival contentions and material placed on record, particularly with regard to fact that AO had made disallowance relying upon SEBI s interim direction and since SEBI s interim order is revoked after investigation into genuineness of pricing and volume of M/s Kailash Auto Finance Ltd. Scrips, we are inclined to grant stay in favour of Assessee. However, in order to secure interest of revenue, we deem 2 S.A.Nos.211, 212 and 213/Hyd./2019 AY 2014-15 S/Shri Mahesh Kumar Khetan, Sh. Vikrant Kumar Khetan and Sh. Dhiraj Kuhar Khetan, Adilabad it fit and proper to direct assesses to pay further of 10% of outstanding demand of taxes on or before 30th September, 2019, and stay is granted for period of 90 days from date of this order. All these appeals are fixed for hearing on 05/11/2019. assesses shall file all relevant paper books well in advance. 5. In result Stay Applications of assesses are allowed. Order pronounced in Open Court on 20th September, 2019. Sd/- Sd/- (A.MOHAN ALANKAMONY) (P MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 20th September, 2019. *GMV Copy forwarded to: 1. Shri Mahesh Kumar Khetan, Prop of Venkatesh Cotton Corporation, D.No.4-3-18/56, Ambedkar Chowk, Adilabad 504 001. 2. Shri Vikrant Kumar Khetan, Prop. Of M/s Salasar Balaji Oil Industries, D.No.4-3-18/56, Ambedkar Chowk, Adilabad 504 001. 3. Shri Dhiraj Kumar Khetan, Prop. Of Venkatesh Fibre Corp., D.No. 4-3-18/56, Ambedkar Chowk, Adilabad 504 001. 4. ACIT, Circle 1, Nizamabad. 5. ITO, Ward I, Adilabad. 6. ACIT, Nizamabad 7. CIT(A), Hyderabad. 8. DR, ITAT, Hyderabad. 9. Guard File. 3 Mahesh Kumar Khetan v. ACIT, Circle 1, Nizamabad
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