Krishan Kumar Agarwal, HUF, Agra v. ITO, Agra

ITA 25/AGR/2010 | 2001-2002
Pronouncement Date: 07-05-2010 | Result: Allowed

Appeal Details

RSA Number 2520314 RSA 2010
Assessee PAN AABHK0242D
Bench Agra
Appeal Number ITA 25/AGR/2010
Duration Of Justice 2 month(s) 27 day(s)
Appellant Krishan Kumar Agarwal, HUF, Agra
Respondent ITO, Agra
Appeal Type Income Tax Appeal
Pronouncement Date 07-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 07-05-2010
Date Of Final Hearing 08-04-2010
Next Hearing Date 08-04-2010
Assessment Year 2001-2002
Appeal Filed On 10-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH SMC AGRA BEFORE SHRI P.K. BANSAL ACCOUNTANT MEMBER ITA NO.25/AGR/2010 ASST. YEAR: 2001-02 KRISHAN KUMAR AGARWAL (HUF) VS. THE INCOME-TAX OFFICER 33/171 JAT PURA 2(1) AGRA. LOHA MANDI AGRA. (PAN: AABHK 0242 D). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.N. AGARWAL ADVOCATE RESPONDENT BY : SHRI S.R. SAHU JR. D.R. ORDER THIS APPEAL HAS BEEN FILED AGAINST THE ORDER OF CI T(A) DATED 16.12.2009 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL :- (1) THAT THE LEARNED ASSESSING OFFICER HAS ERRED O N FACTS AND IN LAW IN INITIATING REASSESSMENT PROCEEDINGS BY INVOKING THE PROVISIONS OF SECTION 147/148 OF THE INCOME TAX ACT. THE ENTIRE REASSESSMENT PRO CEEDINGS BEING VOID AND ILLEGAL THE ORDER UNDER SECTION 143(3)/148 DATED 2 4.11.2008 IS LIABLE TO BE CANCELLED. (2) THAT THE INITIATION OF REASSESSMENT PROCEEDINGS ON NON-EXISTING REASONS BASED ON BORROWED SATISFACTION WITHOUT APPLICATION OF HIS OWN MIND ARE VOID AND ILLEGAL. (3) THAT IN ANY VIEW OF THE CASE THE REASSESSMENT P ROCEEDINGS ARE FACTUALLY AND LEGALLY WRONG AND THE REASSESSMENT ORDER PASSED UNDER SECTION 143(3)/148 IS LIABLE TO BE ANNULLED. (4) THAT THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS BEEN WRONG AND ILLEGAL IN DISMISSING THE ABOVE THREE GROUNDS IN VI EW OF THE AMENDMENT MADE IN SECTION 147 BY THE FINANCE (NO.2) ACT 2009 BY INSER TION OF EXPLANATION 3 THEREIN WITH RETROSPECTIVE EFFECT FROM 01.04.1989. (5) THAT THE ASSESSING OFFICER HAS ERRED ON FACTS A ND IN LAW IN TREATING THE UNDERMENTIONED GIFTSS AS NON-GENUINE :- 2 (I) GIFT FROM MANOJ BANSAL - RS.50000 (II) GIFT FROM NARESH KUMAR - RS.50000 (III) GIFT FROM RAJEEV AGARWAL - RS.50000 THE ADDITION MADE IS LIABLE TO BE DELETED. (6) THAT THE ORDER UNDER SECTION 143(3)/148 DATE 24 .11.2008 IS BAD IN LAW. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS SUBMITTED THE ORIGINAL RETURN OF INCOME AS ON 31.03.2001 SHOWING AN INCOME OF RS.1 3 4 386/-. IN THE BALANCE SHEET ENCLOSED ALONGWITH RETURN THE ASSESSEE HAS SHOWN GIFT RECEI VED FROM SHRI NARESH KUMAR RAJEEV AGARWAL AND SHRI MANOJ BANSAL AMOUNTING TO RS.50 000/- EACH . THE NOTICE UNDER SECTION 148 DATED 26.03.2008 WAS ISSUED BY RECORDING THE FOLLOWING RE ASONS TO BELIEVE :- AS PER INFORMATION PASSED ON TO THIS OFFICE BY THE LEARNED ADDITIONAL D.I.T. (INV) THROUGH THE ADD. CIT RANGE-2 AGRA THIS BENEFICIAR Y HAS ENJOYED THE ACCOMMODATION ENTRIES OF BOGUS SHARE/APPLICATION MONEY/CAPITAL GAINS/GIFTS E TC. AS UNDER :- S.NO. PERSON GIVING THE NAME OF D.D. NO. DATE OF BANK ISSUING ACCOMMODATIONS BENEFICIARY AMOUNT D.D./DATE DD ENTRIES OF ENTRY ------- --------------------- -------------- ----- ----- ----------- ---------------- 1/11 12/16- M/S BASANT KRISHNA KR. NIL NIL SB P ATIALA AGENCIES DARIYA AGR.33/171 50125/- 26.7.2000 DELH I GANJ DELHI JATPURA AGRA 2/ MAHESH GARG DO NIL NIL DO DELHI 50125/- 8.8.2000 3.23 24/18- RAJ KR. AGARWAL SWATI AGARWAL 128589 P&SB NIL JAI LAXMI CORPN. FATEHPURI DELHI C/O ABOVE 50125/- 8.8.2000FATEHPU RI DELHI 4. DO M/S BASANT AGENCIES SWATI AGARAL NIL 10.8. 2000 SB PATIALA DARIYA GANJ DELHI & MASTER 100250 DARIYA GANJ SARANG AGARWAL DELHI C/O SHRI KRISHNA KUMAR AGARWAL RS.250650 3 THE AFORESAID D.D./CHEQUE HAVE BEEN ENCLOSED BY THE ASSESSEE THROUGH HIS BANK A/CS 60031 3578 11125 RESPECTIVELY OF CORPORATION BANK AGRA. THUS THE BENEFICIARY HAS ENJOYED THE INCOME OF RS.2 50650/- THROUGH BOGUS ENTRIES TAKEN FROM THE SHARE BROKERS MENTIONED ABOVE. IN VIEW OF THE REASONS NARRATED HERE IN ABOVE THERE IS AN ESCAPED ASSTT. BY RS.250650/- WHICH GIVES RISE TO THE BIRTH OF INITIATION OF THE PROCEE DING U/S 148/147/151(2) OF THE I.T. ACT 1961 IN THE INTEREST OF GOVT. REVENUE. NOTE:- AFTER DUE APPROVAL OF THE LD ADDITIONAL S D CIT R-2 AGRA THE NOTICE U/S 148/147 OF THE IT ACT (V.R. SAGAR) 26.3.2008 HAS BEEN ISSUED. INCOME TAX OFFICER 2(1) AGRA 3. IN REPLY THERETO THE ASSESSEE HAS FILED COPY OF ORIGINAL RETURN FLED UNDER SECTION 139(1) TO BE TREATED AS RETURN FILED IN PURSUANCE OF THE NOTI CE ISSUED UNDER SECTION 148. THE ASSESSEE ALSO SUBMITTED OBJECTIONS AGAINST THE ACTION TAKEN UNDER SECTION 147/148 STATING THEREIN THAT THE ASSESSEE HAS NOT RECEIVED SO FAR AS ITEM NO.1 & 2 ARE CONCERNED ANY AMOUNT IN THE FORM OF SALE CONSIDERATION OF SHARES OR IN THE FORM OF GIFT OR L OAN FROM BASANT AGENCIES DELHI AND MAHESH GARG OF DELHI. IN RESPECT OF ITEM NOS.3 & 4 ALLEG ED TO HAVE BEEN RECEIVED FROM RAJ KUMAR AGARWAL AND BASANT AGENCIES IT WAS STATED THAT THE AMOUNT WAS NOT RECEIVED BY THE ASSESSEE HUF AND THE ASSESSEE HUF HAS NOTHING TO DO WITH THE AMOUNT. THE A.O. IGNORING THE OBJECTION OF THE ASSESSEE ABOUT THE VALIDITY OF THE INITIATIO N OF THE PROCEEDINGS UNDER SECTION 148 COMPLETED THE ASSESSMENT BY MAKING THE ADDITION UNDER SECTION 69 IN RESPECT OF THREE GIFTS RECEIVED BY THE ASSESSEE OF RS.50 000/- EACH FROM SHRI NARESH KUMAR RAJEEV AGARWAL AND SHRI MANOJ KUMAR BANSAL. 4. WHEN THE ASSESSEE WENT IN APPEAL BEFORE THE CIT( A) THE CIT(A) TOOK THE VIEW THAT THE INITIATION OF THE PROCEEDINGS UNDER SECTION 148 WAS VALID. HE ALSO CONFIRMED THE ADDITION OF RS.1 50 000/- IN RESPECT OF THE THREE GIFTS. 4 5. LD. A.R. BEFORE US VEHEMENTLY CONTENDED THAT THE REASONS RECORDED ARE NOT BONAFIDE. THE ASSESSEE HAS NOT RECEIVED ANY GIFT OR HAS NOT ENTER ED INTO ANY TRANSACTION WITH THESE PARTIES WHICH HAS BEEN RECORDED IN THE REASONS. THE GIFT HAS BEE N RECEIVED FROM 3 OTHER PARTIES WHICH WERE DULY SHOWN IN THE INCOME TAX RETURN. THE BASIS FOR RECODING REASONS OR INITIATING THE PROCEEDINGS IS THE INFORMATION PASSED BY THE ADDL. DIT (INV.) A ND THAT INFORMATION DOES NOT BELONG TO THE ASSESSEE. THEREFORE INITIATION OF THE PROCEEDINGS UNDER SECTION 147 IS NOT VALID. 6. LD. D.R. ON THE OTHER HAND RELIED ON THE ORDER S OF THE AUTHORITIES BELOW. 7. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSION S ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. UNDER SECTION 147 THE A.O. SHOU LD HAVE REASONS TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT. THE BELIEF SHOULD NOT BE A RBITRARY OR IRRATIONAL BUT BASED ON RELEVANT AND MATERIAL REASONS. THE WORDS HAS REASON TO BEL IEVE ARE STRONGER THAN THE WORDS IS SATISFIED. THEREFORE THE REASONS TO BELIEVE AS R ECORDED BY THE A.O. MUST BE BASED ON RELEVANT MATERIALS. NO DOUBT THE COURT CANNOT LOOK INTO TH E SUFFICIENCY OF THE REASONS BUT COURT CAN CERTAINLY EXAMINE WHETHER THE REASONS ARE RELEVANT AND HAVE A BEARING ON THE MATTER IN REGARD TO WHICH THE REASONS HAS BEEN RECODED. THE REASON TO BELIEVE DOES NOT MEAN A PURELY SUBJECTIVE SATISFACTION ON THE PART OF THE A.O. THE BELIEF MU ST BE IN GOOD FAITH IT CANNOT MERELY BE A PRETENCE. THERE MUST BE SOME DIRECT NEXUS BETWEEN THE REASONS ARRIVED AT BY THE A.O. CONCERNED AND THE PRIMARY FACT UPON WHICH REASONS ARE BASED. IN THIS CASE I NOTED THAT THE A.O. HAS RECORDED THE REASONS ON THE BASIS OF THE INFORMATIO N PASSED BY THE ADDL. D.I.T. (INV.) MENTIONING THEREIN 4 ENTRIES RELATING TO THE ACCOMMODATION ENT RIES RECEIVED BY THE ASSESSEE. BUT IN FACT THE ASSESSEE HAS NOT RECEIVED ANY ENTRY FROM THESE PART IES. EVEN THIS FACT IS ALSO CLEAR FROM THE FACT THAT NO ADDITION HAS BEEN MADE BY THE A.O. IN RESPE CT OF THE ENTRIES GIVEN IN THE REASONS AS 5 REPRODUCED HEREINABOVE. THIS CLEARLY DENOTES THAT THE REASONS TO BELIEVE RECORDED BY THE A.O. ARE NOT BASED ON THE MATERIAL RELATING TO THE ASSES SEE AND ARE NOT BONAFIDE ONE. IN THE ABSENCE OF REASONS TO BELIEVE I AM OF THE VIEW THAT INITIATIO N OF PROCEEDINGS UNDER SECTION 147 IS BAD IN LAW AND CONSEQUENTLY THE ASSESSMENT FRAMED IS HEREBY CA NCELLED. SINCE I HAVE ALREADY HELD THE INITIATION OF THE REASSESSMENT PROCEEDINGS TO BE IN VALID ADJUDICATION OF OTHER GROUNDS TAKEN BY THE ASSESSEE IS NOT REQUIRED. 8. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS A LLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 07.05.2010). SD/- (P.K. BANSAL) ACCOUNTANT MEMBER PLACE: AGRA DATE: 7 TH MAY 2010. PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR ITAT AGRA BENCH AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE T RIBUNAL AGRA TRUE COPY