M/s Prompt Buildcap Pvt. Ltd., New Delhi v. ITO, New Delhi

ITA 2092/DEL/2010 | 2001-2002
Pronouncement Date: 16-09-2011 | Result: Allowed

Appeal Details

RSA Number 209220114 RSA 2010
Assessee PAN AAACP8669D
Bench Delhi
Appeal Number ITA 2092/DEL/2010
Duration Of Justice 1 year(s) 4 month(s) 11 day(s)
Appellant M/s Prompt Buildcap Pvt. Ltd., New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 16-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 16-09-2011
Date Of Final Hearing 07-09-2011
Next Hearing Date 07-09-2011
Assessment Year 2001-2002
Appeal Filed On 05-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `F: NEW DELHI BEFORE SHRI C.L.SETHI JUDICIAL MEMBER AND SHRI B.C. MEENA ACCOUNTANT MEMBER I.T. A. NO.2092/DEL/2010 ASSESSMENT YEAR : 2001-02 M/S. PROMPT BUILDCAP PVT. LTD. INCOME-TAX OFFICE R F-22 FIRST FLOOR GEETANJALI ENCLAVE VS. WARD 14 (4) NEW DELHI. NEW DELHI. PAN: AAACP8669D (APPELLANT) (RESPONDENT ) APPELLANT BY : S/SH. NIRAJ JAIN & P.K. MISHRA C A RESPONDENT BY : SHRI R.S. NEGI SR. DR. O R D E R PER C.L. SETHI JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL AGAINST THE ORDER DATED 1 9.03.2010 PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IN THE MATTER OF AN ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SEC. 147/143(3) OF THE INCOME-TAX ACT 1961 (THE ACT) FOR THE ASSESSMENT YEAR 2001-02. 2. THE VARIOUS GROUNDS OF APPEAL RAISED BY THE ASSE SSEE ARE DIRECTED AGAINST THE CIT(A)S ORDER IN CONFIRMING THE ADDITI ON OF RS.5 76 205/- MADE BY THE AO ON ACCOUNT OF AMOUNT RECEIVED FROM M/S. M .K.M. FINSEC PVT. LTD. 2 3. THE ASSESSEE FILED RETURN OF INCOME ON 25.10.200 1 SHOWING TOTAL INCOME AT RS.5 850/-. THEREAFTER A NOTICE UNDER S EC. 148 WAS ISSUED TO THE ASSESSEE ON 14.03.2008 FOR THE REASON THAT THE ASSE SSEE HAD RECEIVED ACCOMMODATION ENTRY FROM M/S. M.K.M. FINSEC PVT. LT D. AS UNDER:- S.NO. NAME OF THE ENTRY PROVIDER AMOUNT RECEIVED DATE OF TRANSACTION CHEQUE NO. 1. M.K.M. FINSEC PVT. LTD. 576205 04.12.2000 314151 CORPORATION BANK KAROL BAGH ND. 2. M.K.M. FINSEC PVT. LTD. 576205 04.12.2000 314151 CORPORATION BANK KAROL BAGH ND. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS CLARIFIED BY THE ASSESSEE THAT THE ASSESSEE HAD RECEIVED ONLY ONE AM OUNT OF RS.5 76 205/- ON 4.12.2000 FROM M/S. M.K.M. FINSEC PVT. LTD. AGAINST THE SALE AND PURCHASE OF SHARES TRANSACTED IN EARLIER YEARS. THE AO ALSO FOUND THAT THE ASSESSEE HAD RECEIVED ONLY ONE AMOUNT OF RS.5 76 205/- VIDE CHEQUE NO.314151 ON 04.12.2000 FROM M/S. M.K.M. FINSEC PVT. LTD. THIS AMOUNT OF RS.5 76 205/- HAS BEEN BROUGHT TO TAX BY THE ASSESS ING OFFICER OBSERVING AS UNDER:- THE ASSESSEE HAS RECEIVED 576205/- VIDE CHEQUE NO . 314151 ON 4.12.2000 FROM MKM FINSEC P LTD WHEREAS ASSESSEE HAS SUBMITTED COPY OF ACCOUNT OF HIS BOOKS NARRATING THE SAID AMOUNT RECEIVED FROM MKM FINSEC P LTD FOR WHICH HE HAS FILED COPY OF CONTRACT NOTE FROM MKM FINSEC P L TD FOR THE 3 SHARE SOLD DURING PREVIOUS YEAR HOWEVER HE WAS ASK ED TO GIVE THE CONFIRMATION WHICH THE ASSESSEE DID NOT FILE I N THIS REGARD THE NOTICE U/S 133(6) HAS BEEN ISSUED TO M/S MKIM F INSEC P LTD AT 202 18/12 WEA CAROL BAGH NEW DELHI 5 ON 28/11/08 THROUGH REGD. POST THE SAME HAS BEEN RECEIVED BACK STATED BY THE POSTAL AUTHORITY LEFT. THE ASSESSEE COUNSEL SH. ANIL DHOOPER ADV. ATTENDED ON 12.12.08 AND HIS COMMENT WAS SOUGHT IN THIS REGARD. HE HAS NOTHING FURTHER TO S AY IN THIS REGARD. HENCE THE AMOUNT OF RS.576205/- IS ADDED TO THE INCOME OF THE ASSESSEE UNDER SECTION 68 OF THE INCO ME TAX ACT 1961. 5. BEING AGGRIEVED THE ASSESSEE PREFERRED AN APPEA L BEFORE THE LEARNED CIT(A). 6. DURING THE COURSE OF APPELLATE PROCEEDINGS A RE MAND REPORT WAS CALLED FOR FROM THE AO. AFTER CONSIDERING THE REMA ND REPORT AND ASSESSEES SUBMISSIONS THE LEARNED CIT(A) CONFIRMED THE AOS ACTION IN MAKING THE ADDITION OF RS.5 76 205/- BY OBSERVING AND HOLDING AS UNDER:- 4.3 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD AR ORDER OF THE AO REMAND REPORT OF THE AO AND REJOIN DER TO THE AOS REMAND REPORT SUBMITTED BY THE LD. AR. MY OBS ERVATION ON THIS ISSUE ARE AS UNDER: (I) I FIND THAT THERE IS NO DISPUTE ABOUT THE SHOWI NG THE AMOUNT OF RS.5 76 205/- IN THE PREVIOUS YEAR AND AP PEARING IN THE BALANCE SHEET AS ON 31.03.2000. HOWEVER THE A O IN HIS REMAND REPORT DATED 09/02/2010 HAS SPECIFICALLY MEN TIONED THAT M/S. MKM FINSEC PVT. LTD. FROM WHOM THE APPELL ANT RECEIVED THE CHEQUE OF RS.5 76 205/- WHICH WAS CRED ITED IN ITS BANK ACCOUNT ON 04/12/2000 WAS DOING NO BUSINESS BU T ISSUING MERE ACCOMMODATION ENTRIES. HE FURTHER POINTED OUT THAT THE DIRECTOR OF THAT COMPANY SHRI MAHESH BATRA IN HIS S TATEMENT ON OATH DATED 23/01/2004 GIVEN BEFORE THE ADDITIONAL D IRECTOR OF INCOME TAX (INVESTIGATION) HAS STATED WE USE TO GE T THE CASH 4 RECEIVED FROM CLIENTS EITHER IN OUR BANK ACCOUNT AR E THROUGH OUR ASSOCIATES. AMOUNT DEPOSITED IN THE ASSESSEE ASSOCIATES ACCOUNT OR THEN TRANSFERRED TO THE MAIN ACCOUNT OF MKM FINSEC PVT. LTD. AND CHEQUES ARE ISSUE TO PERSON WH O GIVE THE CASH AFTER DEDUCTING THE COMMISSION. (II) I FURTHER FIND THAT THOUGH THE REMAND REPORT D ISCUSSED ABOVE WAS CONFRONTED TO THE APPELLANT AND THE LD. A R VIDE HIS LETTER DATED 08/03/2010 HAS SUBMITTED THE REJOINDER . HOWEVER NO REBUTTAL WAS GIVEN BY THE LD AR ABOUT THE REMAND REPORT ON THE POINT OF MODUS OPERANDI ADOPTED BY MKM FINSEC PVT. LTD. MENTIONED ABOVE WHICH IMPLIEDLY MEANS THAT THE APP ELLANT HAS ACCEPTED THE ASSERTION MADE BY THE AO IN THE REMAND REPORT REGARDING ACCOMMODATION ENTRY PROVIDED BY M/S. MKM FINSEC PVT. LTD. IN THIS SITUATION THE NORMAL ACCOUNTING SYSTEM I.E. MERCANTILE SYSTEM OF ACCOUNTING IS NOT APPLICABLE I N APPELLANTS CASE AND THE INCOME OF THE APPELLANT SHALL BE DETER MINED ON THE BASIS OF DATE OF RECEIPT OF AMOUNT WHICH I.E. CASH RECEIVED BACK BY THE APPELLANT BY WAY OF CHEQUE IN ITS FAVOUR. S INCE THE AMOUNT OF RS.5 76 205/- WAS CREDITED IN APPELLANT A CCOUNT ON 04/12/2000 WHICH FALLS WITHIN THE FINANCIAL YEAR 2 000-01 RELEVANT TO ASSESSMENT YEAR 2001-02 I.E. PERIOD UND ER CONSIDERATION. IN THIS SITUATION THE ADDITION OF RS.5 76 205/- MADE BY THE AO IN APPELLANTS CASE DURING YEAR UNDE R CONSIDERATION IS JUSTIFIED AND THE SAME IS UPHELD. HENCE GROUND NO.5 OF APPEAL IS REJECTED. 7. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE V ARIOUS PAPERS AND DOCUMENTS PLACED IN THE PAPER BOOK FILED BY THE ASS ESSEE. IN THE PRESENT CASE THE SUM OF RS.5 76 205/- RECEIVED BY THE ASSE SSEE FROM M/S. MKM FINSEC PVT. LTD. HAS BEEN ADDED AS INCOME IN THE A SSESSEES HAND BY TREATING THE SAID AMOUNT AS AN ACCOMMODATION ENTRY PROVIDED BY M/S. MKM FINSEC PVT. LTD. IT IS NOT IN DISPUTE THAT THE ASSESSEE R ECEIVED THE SUM OF 5 RS.5 76 205/- VIDE CHEQUE NO.314151 DATED 4.12.2000 FROM M/S. MKM FINSEC PVT. LTD. IN THIS RESPECT THE ASSESSEE HAS PRODUCED BEFORE US THE DETAILS OF PURCHASE AND SALE OF SHARES TRANSACTED T HROUGH M/S. MKM FINSEC P. LTD. DURING THE IMMEDIATE PRECEDING YEAR. IN TH E IMMEDIATE PRECEDING YEAR ENDED ON 31.03.2000 THE ASSESSEE HAD SHOWN IN COME FROM SHARE ACCOUNT AT RS.2 25 910/-. THE ASSESSEE HAS GIVEN T HE DETAILS OF PURCHASES SALES AND OPENING & CLOSING STOCK OF SHARES DURING THE YEAR ENDED ON 31.03.2000. THE TOTAL AMOUNT OF OPENING BALANCE AN D PURCHASES WAS OF RS.23 10 98 950/-. THE TOTAL AMOUNT OF SALES WITH CLOSING STOCK WAS OF RS.23 13 34 865/-. THE ASSESSEE HAD THUS EARNED A PROFIT OF RS.2 25 910/- FROM PURCHASE AND SALES OF SHARES. THE TOTAL PURCH ASE AND SALES OF SHARES DURING THE YEAR ENDED ON 31.03.2000 INCLUDED PURCHA SES OF SHARES AMOUNTING TO RS.36 56 612/- AND SALES OF SHARES AMO UNTING TO RS.42 32 817/- TRANSACTED THROUGH M/S. MKM FINSEC P . LTD. IN THE TRANSACTION OF PURCHASE AND SALE OF SHARES FROM M/S . MKM FINSEC P. LTD. IN THE YEAR ENDED ON 31.03.2000 THE ASSESSEE EARNED A PROFIT OF RS.5 76 205/- WHICH HAS BEEN SHOWN AS A RECEIVABLE FROM M/S. MKM FINSEC P. LTD. AS ON 31.03.2000. THE DETAILS OF THE CONTRACT NOTES AND DETAILS OF THE SHARES IN RESPECT OF WHICH PURCHASES AND SALES WERE MADE THRO UGH M/S. MKM FINSEC PVT. LTD. HAS BEEN FILED. M/S. MKM FINSEC P. LTD. IS A MEMBER OF DELHI 6 STOCK EXCHANGE ASSOCIATION LTD. THE VARIOUS SHARES WHICH WERE BOUGHT AND PURCHASED BY M/S. MKM FINSEC P. LTD. FOR THE AS SESSEE ARE MENTIONED IN THE CONTRACT NOTES. THE SETTLEMENT NUMBER AND S ETTLEMENT PERIOD OF STOCK EXCHANGE DURING WHICH THE SHARES WERE PURCHASED AND SOLD ARE MENTIONED IN THE CONTRACT NOTES. ALL THE SHARES MENTIONED IN TH E CONTRACT NOTES ARE LISTED SECURITIES AND TRANSACTIONS WERE MADE THROUGH THE STOCK EXCHANGE. THE SHARES WHICH WERE PURCHASED AND SOLD INCLUDE SHARES OF SILVERLINE INDUSTRIES HCL-HP MTNL LTD. MOSER BAER LT BSES BPL INDIA AND ROLTA INDIA. ALL THESE SHARES ARE LISTED IN THE ST OCK EXCHANGE AND THE TRANSACTIONS WERE CARRIED THROUGH THE SETTLEMENT MA DE IN THE STOCK EXCHANGE THROUGH PROPER PROCEDURE. THE TOTAL PURCHASES AND SALES MADE THROUGH MKM FINSEC P. LTD. ARE INCLUDED IN THE SHARE PURCHA SE AND SALES ACCOUNT WHERE OVERALL PROFIT OF RS.2 25 910/- WAS SHOWN IN THE PROFIT AND LOSS ACCOUNT. FROM THE STATEMENT OF ACCOUNTS FOR THE YE AR ENDED ON 31.03.2000 IT IS THUS ESTABLISHED THAT THE PROFIT OF RS.5 76 205/- EARNED BY THE ASSESSEE FROM PURCHASE AND SALE OF SHARES THROUGH M/S. MKM F INSEC P. LTD. HAS ALREADY BEEN INCLUDED N THE INCOME DECLARED BY THE ASSESSEE. IT IS NOT A CASE WHERE THE SUM OF RS.5 76 205/- HAS BEEN CREDITED ON CAPITAL ACCOUNT OR IN RESPECT OF ANY INCOME EXEMPT FROM TAX. THE AMOUNT OF RS.5 76 205/- REMAINING OUTSTANDING AS ON 31.03.2000 HAS BEEN REC EIVED THROUGH CHEQUE 7 NO.314151 DATED 04.12.2000 DURING THE CURRENT ASSES SMENT YEAR UNDER CONSIDERATION. FROM THESE DETAILS DISCUSSED ABOVE IT IS THUS CLEAR THAT THE AMOUNT OF RS.5 76 205/- HAS ALREADY BEEN CONSIDERED AS INCOME IN THE IMMEDIATE PRECEDING ASSESSMENT YEAR I.E. ASSESSMENT YEAR 2000-01 BY DISCLOSING THE SAME AS PROFIT FROM SHARE TRANSACTIO N. WE THEREFORE FIND NO BASIS TO INCLUDE THE SAID AMOUNT OF RS.5 76 205/- A S UNDISCLOSED INCOME IN THE CURRENT YEAR UNDER CONSIDERATION MERELY FOR THE REASON THAT THE AMOUNT HAS BEEN RECEIVED THROUGH CHEQUE IN THIS YEAR. WE THEREFORE DELETE THE ADDITION IN THE YEAR UNDER CONSIDERATION AND ALLOW THE GROUND RAISED BY THE ASSESSEE. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 9. THIS DECISION IS PRONOUNCED IN THE OPEN COURT ON 16 TH SEPTEMBER 2011. SD/- SD/- (B.C. MEENA) (C.L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 16 TH SEPTEMBER 2011. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR ITAT.