DCIT, New Delhi v. M/s A. Jain & Co. Pvt. Ltd., New Delhi

ITA 2911/DEL/2010 | 2001-2002
Pronouncement Date: 25-02-2011 | Result: Dismissed

Appeal Details

RSA Number 291120114 RSA 2010
Assessee PAN AAECA0208R
Bench Delhi
Appeal Number ITA 2911/DEL/2010
Duration Of Justice 8 month(s) 15 day(s)
Appellant DCIT, New Delhi
Respondent M/s A. Jain & Co. Pvt. Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 25-02-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 25-02-2011
Date Of Final Hearing 14-02-2011
Next Hearing Date 14-02-2011
Assessment Year 2001-2002
Appeal Filed On 10-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER ITA NO.2911/DEL/2010 ASSESSMENT YEAR : 2001-02 DY. COMMISSIONER OF INCOME TAX CIRCLE 1 (1) ROOM NO.390 CR BUILDING NEW DELHI 110 002. VS. M/S A. JAIN & CO. PVT. LTD. 11 BABAR LANE BENGALI MARKET NEW DELHI 110 001. PAN : AAECA0208R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMOL SINHA ADVOCATE REVENUE BY : MRS. ANUSHA KHURANA SR. DR ORDER PER I.P. BANSAL JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIRECT ED AGAINST THE ORDER OF THE CIT (A) DATED 16 TH MARCH 2010 FOR ASSESSMENT YEAR 2001- 02 GROUNDS OF APPEAL READ AS UNDER:- 1. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW I N DELETING THE ADDITION OF RS.10 93 072/- MADE U/S 68 OF THE INCO ME TAX ACT ON ACCOUNT OF ACCOMMODATION ENTRY TAKEN FROM M/S ANKUR CULTIVATORS PVT. LTD. 2. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS.40 00 000/- MADE U/S 68 OF THE INCO ME TAX ACT ON ACCOUNT OF ACCOMMODATION ENTRY TAKEN FROM M/S MAESTRO MARKETING AND ADVERTISING PVT. LTD. 3. THAT THE APPELLANT CRAVES LEAVE FOR RESERVING THE R IGHT TO AMEND MODIFY ALTER ADD OR FOREGO ANY GROUND (S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. ITA NO.2911/DEL/2010 2 2. THE ASSESSEE IN THE PRESENT CASE IS STOCK SHARES AND FINA NCIAL BROKERS AND IS A MEMBER OF THE DELHI STOCK EXCHANGE A SSOCIATION LTD. A RETURN DECLARING A LOSS OF ` 6 05 71 145/- WAS FILED BY THE ASSESSEE ON 31 ST OCTOBER 2001 AND VIDE ASSESSMENT ORDER DATED 28 TH FEBRUARY 2003 PASSED U/S 143 (3) THE LOSS OF THE ASSESSEE WAS DETERMI NED AT ` 5 96 78 894/-. SUBSEQUENTLY NOTICE U/S 148 WAS ISSUED ON 31 ST MARCH 2008 WITH THE PRIOR APPROVAL OF COMMISSIONER OF INCOM E-TAX (DELHI)-I FOR THE REASONS FOUND MENTIONED IN THE ASSESSMENT ORDER A T PAGE 1 2 AND 3. 3. ACCORDING TO THE REASONS A REPORT ON THE INQUIRIE S MADE BY THE ADDL. DIRECTOR OF INCOME-TAX (INV.) UNIT VI NEW D ELHI INTO THE ACCOMMODATION ENTRIES GIVEN BY ENTRY OPERATORS WAS REC EIVED AND THE SAID REPORT WAS RECEIVED BY THE CONCERNED COMMISSIONER VIDE LETTER DATED 26 TH MARCH 2008 WHICH WAS SUBSEQUENTLY FORWARDED TO THE ASSESSING OFFICER. THE INQUIRIES BY INVESTIGATION WING WERE INITIATED TO PROBE INTO SOME BANK ACCOUNTS WHICH WERE USED TO ISSU E CHEQUES TO THE ENTRY SEEKERS BY BENEFICIARIES AGAINST CASH PAID BY THEM TO THE ENTRY OPERATORS. THE PROBE WAS INITIATED INTO THE AC COUNTS WHICH WERE USED TO PROVIDE THOSE ENTRIES AND IT WAS FOUND THAT MAN Y MORE BANK ACCOUNTS WERE BEING USED BY THE ENTRY OPERATORS FOR TH E PURPOSE OF GIVING ACCOMMODATION ENTRIES. ACCORDING TO THE MODU S OPERANDI DESCRIBED BY THE INVESTIGATION WING THE ASSESSEE WHO ARE CALLED ENTRY TAKERS OR BENEFICIARIES WANTED TO INTRODUCE UNACCOUNT ED MONEY IN THE BOOKS OF ACCOUNT WITHOUT PAYING TAX APPROACHED ANOT HER PERSON CALLED AS ENTRY OPERATOR AND HANDOVER THE CASH INCLUD ING THE COMMISSION AND WILL TAKE CHEQUES/DEMAND DRAFTS/POSTAL OR DERS. THE CASH WAS BEING DEPOSITED BY THE ENTRY OPERATORS IN THE BANK ACCOUNT EITHER IN HIS OWN NAME OR IN THE NAME OF HIS RELATIVE S/FRIENDS OR OTHER PERSON HIRED BY HIM FOR THE PURPOSE OF OPENING BANK A CCOUNT AND THE ENTRY OPERATOR THEN WILL ISSUE THE CHEQUES/DEMAND DR AFT/POSTAL ORDERS ITA NO.2911/DEL/2010 3 IN THE NAME OF BENEFICIARIES FROM THE SAME BANK ACCOU NT IN WHICH THE CASH IS DEPOSITED OR ANOTHER ACCOUNT IN WHICH THE FUND S WERE TRANSFERRED THROUGH CLEARING IN TWO OR MORE STAGES. T HE BENEFICIARY IN TURN DEPOSIT THOSE INSTRUMENTS IN THE BANK ACCOUNT AND THE MONEY COME TO HIS REGULAR BOOKS OF ACCOUNT IN THE FORM OF G IFT/SHARE APPLICATION MONEY/LOAN ETC. THROUGH BANKING CHANNE L. ACCORDING TO THE SAID REPORT THE ASSESSEE HAD TAKEN FROM THOSE BANK A CCOUNTS THE FOLLOWING ENTRIES:- BANK OF THE ASSESSEE AMOUNT INSTRUMENT NO. DATE ON WHICH ENTRY TAKEN ASSTT. YEAR CREDIT ENTRY COMING FROM THE ACCOUNT OF HDFC BANK K.G. MARG NEW DELHI. 1093072 763980 05-05-00 2001-02 M/S ANKUR CULTIVATORS PVT. LTD. DO 4000000 330284 06-10-00 2001-02 M/S MAESTRO MKTG. & ADVT. P. LTD. 4. IT IS FURTHER MENTIONED THAT THE COMPANY NAMELY M/S ANKUR CULTIVATORS PVT. LTD. WAS BEING OPERATED BY ONE SHRI S.M. AGGRAWAL AND HIS ASSOCIATES WHO ACCEPTED TO DO ENTRY BUSINESS. SIMILAR LY M/S MAESTRO MARKETING & ADVERTISING PVT. LTD. WAS BEING OP ERATED BY ONE SHRI MUKESH GUPTA RAJAN JASSAL AND SURENDRA PAL SINGH WHO HAD ALSO ACCEPTED TO CARRY ON THE BUSINESS OF ENTRY OPERATOR. KEEPING IN VIEW THOSE REASONS THE ASSESSING OFFICER HAS ARRIVED AT A CONCLU SION THAT HE HAD REASONS TO BELIEVE THAT THE AMOUNT STATED IN THE T ABLE OF ` 50 93 072/- REPRESENTS THE INCOME OF THE ASSESSEE CHARGEA BLE TO TAX WHICH HAS ESCAPED ASSESSMENT IN ASSESSMENT YEAR 2001-02. 5. THE ASSESSEE FILED OBJECTIONS AGAINST THE SAID ISSUANCE O F NOTICE AND IT WAS ALSO STATED THAT THE RETURN ORIGINALLY FILE D ON 31 ST OCTOBER 2001 SHOULD BE DEEMED TO BE FILED IN PURSUANCE OF NOT ICE U/S 148. THE ASSESSING OFFICER REJECTED THE OBJECTIONS FILED BY THE A SSESSEE VIDE ORDER DATED 10 TH NOVEMBER 2008 AND THEREAFTER THE ASSESSING OFFICER ITA NO.2911/DEL/2010 4 PROCEEDED TO ASSESSEE THE INCOME OF THE ASSESSEE. THE ASSESSIN G OFFICER HAS GONE BY THE FACT THAT ACCORDING TO THE R EPORT BOTH THE ABOVE MENTIONED CONCERNS WERE FOUND TO HAVE ACCEPTED THE ENTRY BUSINESS AND THE CASE LAW RELIED UPON BY THE ASSESSEE WAS NO T FOUND TO BE APPLICABLE TO ASSESSEES CASE AND ACCORDINGLY THE AFOREMENTIONED AMOUNT OF ` 50 93 072/- WAS REDUCED F ROM THE ALREADY ASSESSED LOSS OF ` 5 96 78 894/- BY ASSESSING THE NET LOSS OF ` 5 45 85 822/-. 6. THE AFOREMENTIONED ADDITION WAS AGITATED IN AN AP PEAL BEFORE THE CIT (A) INCLUDING THE ISSUE REGARDING INVALIDITY OF RE-ASSESSMENT PROCEEDINGS. IT WAS SUBMITTED THAT THE ASSESSING OFFICER DID NOT HAVE ANY MATERIAL TO COME TO THE CONCLUSION THAT ANY INCO ME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT AS REASONS RECORDED BY HIM DID N OT HAVE LIVE LINK OR CLOSE NEXUS BETWEEN THE MATERIAL BEFORE THE ASSESSING OFFICER WHICH COULD LEAD HIM TO BELIEVE THAT TAXABL E INCOME HAD ESCAPED ASSESSMENT. HOWEVER LEARNED CIT (A) HAS REJECTE D THE SAID SUBMISSIONS OF THE ASSESSEE AND HAS UPHELD THE VALIDITY OF R E- ASSESSMENT PROCEEDINGS. 7. ON MERITS THE SUBMISSIONS OF THE ASSESSEE ARE INCORPORAT ED BY THE LEARNED CIT (A) AT PAGES 4 5 AND 6 OF THE IMPUG NED ORDER. ACCORDING TO THOSE WRITTEN SUBMISSIONS THE ASSESSEE HAD STAT ED THAT M/S ANKUR CULTIVATORS PVT. LTD. IS A CLIENT OF THE ASSESSE E AND WHILE OPENING THE ACCOUNT OF THE SAID CLIENT THE ASSESSEE HAD DULY FOLLOWED THE NORMS AS PRESCRIBED BY SEBI AND IN PURSUANCE THERET O HAD OBTAINED FROM HIS CLIENT A COPY OF MEMORANDUM AND AR TICLES OF ASSOCIATION COPY OF PAN NO. NAME AND ADDRESS OF ONE O F THE DIRECTORS TOGETHER WITH HIS PHOTOGRAPH BANK ACCOUNT NO. OF TH E COMPANY A CLIENT AGREEMENT FORM. IT WAS SUBMITTED THAT THE SAID CLIENT WAS A REGULAR CLIENT OF THE ASSESSEE WHO WAS REGULARLY TRADING ON THE DELHI ITA NO.2911/DEL/2010 5 STOCK EXCHANGE WITH THE ASSESSEE AS ITS BROKER EVEN PRIOR TO THE RELEVANT ASSESSMENT YEAR. IT WAS SUBMITTED THAT THE SAID CLIENT WAS HAVING AN OUTSTANDING AMOUNT OF ` 10 93 072/- ON ACC OUNT OF TRANSACTIONS CARRIED OUT ON DELHI STOCK EXCHANGE ON B EHALF OF THE CLIENT IN THE PREVIOUS ASSESSMENT YEAR WHICH WAS REQUIRED TO BE PAID TO THE ASSESSEE. THE CLIENT M/S ANKUR CULTIVATORS PVT. L TD. HAD DULY PAID SUCH OUTSTANDING SUM TO THE ASSESSEE ON 5 TH MAY 2000 THROUGH ITS BANK ACCOUNT BEARING NO.3152 VIJAYA BANK ANSARI ROAD NEW DELHI VIDE CHEQUE NO.763980 FOR AN AMOUNT OF ` 10 93 072/ - AND THE SAID SUM WAS DULY CREDITED INTO BANK ACCOUNT OF THE ASSESSEE A T HDFC BANK K.G. MARG NEW DELHI. IT WAS SUBMITTED THAT TH E SAID CLIENT HAS ALSO DULY PROVIDED THE STATEMENT OF BANK ACCOUNT FROM WHERE THE PAYMENT HAS BEEN MADE TO THE ASSESSEE AND WHICH SHOWS THAT NO CASH WAS INTRODUCED AND IT ALSO SHOWED THE FACT THAT TH E SAID ACCOUNT WAS NOT USED FOR STAND ALONE TRANSACTION WITH THE ASSESSEE. IT WAS A REGULAR BANK ACCOUNT OF THE CLIENT AND THE STATEMENT OF ENTIRE FINANCIAL YEAR 2000-01 WILL SHOW THAT NO CASH WAS INTRODUCED EIT HER PRIOR OR POST THE PAYMENT OF THE OUTSTANDING DUE OF THE CLIENT. IT WAS SUBMITTED THAT THE SAID OUTSTANDING SUM WAS SHOWN IN THE REGULAR BOOKS O F ACCOUNT MAINTAINED BY THE ASSESSEE AND WAS SHOWN AS A SUNDRY DEBTOR OF THE ASSESSEE. 8. IN RESPECT OF ANOTHER SUM OF `40 LAC IT WAS SUBMITT ED THAT THE SAID CONCERN WAS ALSO THE REGULAR CLIENT OF THE ASSESSEE. FOLLOWING THE NORMS PRESCRIBED BY THE SEBI FOR OPENING OF THE CLIEN T ACCOUNT DOCUMENTS WERE OBTAINED BY THE ASSESSEE FROM THE SAID PAR TY ALSO. THE SAID CLIENT HAD BOUGHT 25 000 SHARES OF ZEE TELEFI LMS LTD. ON NON- DELIVERY BASIS @ 536.77 PER SHARE AS ON 15 TH SEPTEMBER 2000 AND THE SAID CLIENT HAD SOLD THOSE SHARES ON 12 TH OCTOBER 2000 @ 377.81 PER SHARE. IN BETWEEN THESE TWO TRANSACTIONS BADLA TOOK PLACE OF THE ABOVE SAID PURCHASES AND THE COST OF CARRYING THE TRANSA CTION @ ` 9.21 ITA NO.2911/DEL/2010 6 PER SHARE AS BADLA FINANCING CHARGES WERE ALSO LEVIED ON THE CLIENT. THE TOTAL OUTSTANDING LOSS WAS SUFFERED BY THE SAID CLIEN T AND CONSEQUENTLY A SUM OF ` 42 07 089/- WAS OUTSTANDING AG AINST THE SAID CLIENT. THE SAID AMOUNT WAS PAID TO THE ASSESSEE BY THE SAID CLIENT THROUGH AN ACCOUNT PAYEE CHEQUE OF ` 40 LAC. FOR T HE RECOVERY OF THE BALANCE SUM OF ` 2 07 089/- THE ASSESSEE HAD SOLD 6400 SH ARES OF M/S PADMINI TECHNOLOGIES HELD BY THE CLIENT FOR A SUM OF ` 2 95 158.40 AND THE BALANCE SUM OF RS.88 069.40 WAS RETURNED BY THE ASSE SSEE TO THE CLIENT THROUGH ACCOUNT PAYEE CHEQUE. THUS IT WAS SUB MITTED THAT THE SAID TRANSACTION OF SALE AND PURCHASE OF 6400 SHARES HAS N OT BEEN DISPUTED BY THE ASSESSING OFFICER AND THE RETURN OF BALA NCE SUM OF ` 88 069.40 IS THROUGH ACCOUNT PAYEE CHEQUE. 9. IT WAS FURTHER SUBMITTED THAT IDENTITY OF BOTH THE PARTIES WAS NEVER IN DOUBT. VARIOUS SUPPORTING DETAILS WITH REGAR D TO THE AFOREMENTIONED TWO PARTIES WERE DULY FILED BEFORE TH E ASSESSING OFFICER TO ESTABLISH THE GENUINENESS OF THE TRANSACTION. THE ASSESSEE HAS BEEN CARRYING ON REGULAR SHARE TRANSACTIONS FOR VAR IOUS PARTIES AND IT WAS ONLY OUT OF OUTSTANDING BALANCE WITH THE CLIEN TS THE SAID AMOUNT WAS RECEIVED. THE DOCUMENTARY PROOF OF SHARE TRANSACT IONS AND OUTSTANDING AMOUNTS WERE PROVIDED TO THE ASSESSING OFFICE R WHO REJECTED THE CLAIM OF THE ASSESSEE WITHOUT MAKING PROPE R INQUIRIES AND WITHOUT DETERMINING THE NATURE OF TRANSACTION. THOSE ENTRIES WERE NOT ACCOMMODATION ENTRIES. REFERENCE WAS MADE TO VARIOUS DECISIONS TO CONTEND THAT THE ASSESSEE HAD DISCHARGED ITS INITIAL ONUS LAID UPON IT TO PROVE THE IDENTITY GENUINENESS AND CREDIT WORTHINESS O F THE CREDITORS. THE INFORMATION RECEIVED BY THE ASSESSING OFFICER WAS GE NERAL IN NATURE WHICH HAS NOTHING TO DO WITH THE TRANSACTIONS E NTERED INTO BY THE ASSESSEE WITH THOSE TWO CONCERNS. CONSIDERING THESE SUB MISSIONS LEARNED CIT (A) HAS RECORDED HIS FINDING AS UNDER:- ITA NO.2911/DEL/2010 7 I) THERE WAS NO SPECIFIC INFORMATION OR DOCUMENT EXIST ING ON RECORD TO ESTABLISH THAT IN THE CASE OF THE ASSESSEE THE AMOUNT RECEIVED WAS IN THE NATURE OF AN ACCOMMODATIO N ENTRY OR THE AMOUNT RECEIVED BY THE ASSESSEE WAS ACTUALL Y UNEXPLAINED INCOME OF THE ASSESSEE. THOSE TWO PARTIES MA Y BE ACTUALLY PROVIDING THE ENTRIES TO THE OTHER PARTI ES BUT UNLESS IT IS ESTABLISHED THAT IN THE CASE OF THE ASSESSEE ALSO SUCH ENTRIES WERE PROVIDED THE ADDITION COULD NOT BE MADE. II) ACCORDING TO THE EVIDENCE FURNISHED BY THE ASSESSEE THESE WERE IN THE SHAPE OF REGULAR SHARE TRANSACTIONS SUPPORTE D BY DETAILS OF CONTRACT NOTICE OF ACCOUNTS OF THE PARTIES. IN THE CASE OF M/S ANKUR CULTIVATORS PVT. LTD. THERE WAS AN OUTSTANDING AMOUNT OF ` 10 93 072/- WHICH WAS PAID TO THE ASSESSEE THROUGH BANK. THERE WAS NO EVIDENCE OF ANY CASH HAVING BEEN INTRODUCED BY THE PARTY IN ITS BANK ACCO UNT BEFORE MAKING THE PAYMENT TO THE ASSESSEE. IN THE CASE OF M/S MAESTRO MARKETING AND ADVERTISING PVT. LTD. THERE WAS AN OUTSTANDING BALANCE OF ` 42 07 089/- ON ACCOUNT OF SA LE OF SHARES OF ZEE TELEFILMS LTD. AND ON ACCOUNT OF OUTSTAND ING LOSS SUFFERED BY THE SAID PARTY. VARIOUS OTHER DETAILS O F SHARE TRANSACTIONS CARRIED OUT BY THE ASSESSEE WERE ALSO PROVIDE D TO JUSTIFY THE PAYMENT RECEIVED BY THE TWO PARTIES. THE ASSESSING OFFICER HAS NOT CONTROVERED ANY OF THESE EVIDEN CES FILED BY THE ASSESSEE. III) FROM THE FACTS IT IS CLEAR THAT THERE IS NO MATE RIAL EVIDENCE AVAILABLE WITH THE ASSESSING OFFICER ON THE BASIS OF WHIC H IT COULD BE ESTABLISHED THAT THE AMOUNT RECEIVED FROM TH E TWO PARTIES WAS ACTUALLY IN THE NATURE OF UNEXPLAINED CRE DITS. THE AMOUNT HAS NOT BEEN FOUND TO ORIGINATE FROM THE COFF ERS OF THE ASSESSEE. THE INITIAL ONUS WAS DISCHARGED BY THE ASSESSEE TO ESTABLISH THE IDENTITY OF THESE PARTIES AND THE ITA NO.2911/DEL/2010 8 ASSESSING OFFICER HAS NOT ESTABLISHED CONTRARY. THE CONCLUSION OF THE ASSESSING OFFICER FOR MAKING SUCH ADDIT ION IS NOT BASED ON ANY MATERIAL EVIDENCE OR SPECIFIC STATEME NT OF ANY OF THE PERSONS. 10. THUS LEARNED CIT (A) HAS ARRIVED AT A CONCLUSION THAT IT WOULD BE UNFAIR TO TREAT THE SAID AMOUNT AS UNEXPLAINED INCOME OF THE ASSESSEE AS THERE IS NO ENOUGH MATERIAL OR REASON TO ESTABLISH TH E SAME. THE ASSESSING OFFICER DID NOT DISPUTE THE IDENTITY CREDIT W ORTHINESS OR GENUINENESS OF THE TRANSACTION AND THUS THE ADDITION WAS NOT JUSTIFIED. 11. THE DEPARTMENT IS AGGRIEVED WITH SUCH FINDINGS REC ORDED BY THE CIT (A) AND HENCE HAS FILED THE AFOREMENTIONED APP EAL. 12. AFTER NARRATING THE FACTS RELYING UPON THE FIND INGS RECORDED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IT WAS VEHEME NTLY PLEADED BY LD. DR THAT THE ASSESSING OFFICER HAD MADE T HE ADDITION ON THE BASIS OF REPORT RECEIVED BY HIM FROM INVESTIGATION WING. THE AMOUNTS RECEIVED BY THE ASSESSEE FROM THE AFOREMENTIONED TWO PARTIES WERE IN FACT THE AMOUNTS RECEIVED BY THE ASSESSEE FROM ENTRY PROVIDERS AND HENCE THOSE AMOUNTS WERE UNEXPLAINED I NCOME OF THE ASSESSEE. LD. CIT (A) HAS WRONGLY DELETED THE ADDITION AND THE ORDER OF THE ASSESSING OFFICER SHOULD BE RESTORED AND THAT OF CIT (A) SHOULD BE SET ASIDE. 13. ON THE OTHER HAND RELYING UPON THE SUBMISSIONS MAD E BY THE ASSESSEE BEFORE THE CIT (A) IT WAS SUBMITTED BY LD. AR THAT THE ADDITION HAS RIGHTLY BEEN DELETED. HE SUBMITTED THAT BOTH THE PARTIES WERE REGULAR CLIENTS OF THE ASSESSEE AND WERE TRANSACTING IN THE SALE AND PURCHASE OF SHARES. THE AMOUNT WAS RECEIVED BY THE ASSESSEE ITA NO.2911/DEL/2010 9 AGAINST THE OUTSTANDING BALANCES RECEIVABLE FROM THOSE PARTIES ON ACCOUNT OF REGULAR SALE AND PURCHASE OF SHARE TRANSACTI ONS. THE NECESSARY EVIDENCE TO SUPPORT SUCH TRANSACTIONS AND RECEI PT OF OUTSTANDING BALANCE WERE FILED BEFORE THE ASSESSING OFFI CER AND CIT (A). THERE WAS NO MATERIAL ON RECORD TO SUGGEST THAT WHAT WAS SUBMITTED BEFORE THE ASSESSING OFFICER AND CIT (A) IS INC ORRECT. THEREFORE HE SUBMITTED THAT THE ADDITION HAS RIGHTLY BEEN DELETED BY LD. CIT (A). HE ALSO DREW OUR ATTENTION TOWARDS VARI OUS DOCUMENTS SUBMITTED IN THE PAPER BOOK TO SUPPORT THE CONTENTION THAT THE AMOUNTS RECEIVED BY THE ASSESSEE FROM AFOREMENTIONED TWO PARTIES WERE RELATING TO REGULAR SHARE TRANSACTIONS ENTERED IN TO THE REGULAR COURSE OF BUSINESS BY THE ASSESSEE. THUS HE PLEADED THAT T HE ORDER OF THE CIT (A) SHOULD BE UPHELD AND THE DEPARTMENTAL AP PEAL SHOULD BE DISMISSED. 14. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS I N THE LIGHT OF THE MATERIAL PLACED BEFORE US. AT PAGE 1 OF THE PAP ER BOOK THE ASSESSEE HAS SUBMITTED CONFIRMED COPY OF ACCOUNT RECEIVED BY IT FROM M/S ANKUR CULTIVATORS PVT. LTD. A SUM OF ` 10 93 072. 88 HAS BEEN SHOWN BY THE ASSESSEE AS OPENING BALANCE WHICH HAS BEEN RE CEIVED BY THE ASSESSEE ON 4 TH MAY 2000 BEING A SUM OF ` 10 93 072/- VIDE CHEQUE NO.763980. ON THE SAID ACCOUNT PERMANENT A/C NO. OF THE SAID PARTY IS ALSO MENTIONED. THUS THE SAID PAYMENT HAS BEE N RECEIVED BY THE ASSESSEE ON ACCOUNT OF OUTSTANDING SUM OF ` 10 93 072 /-. ON PAGE 2 THE ASSESSEE HAS ENCLOSED THE COPY OF BANK ACCOUNT OF M /S ANKUR CULTIVATORS PVT. LTD. WHICH IS A COPY OF BANK ACCOUNT OF THAT PARTY IN VIJAYA BANK ANSARI ROAD BRANCH NEW DELHI WHEREIN A SUM OF ` 10 93 072/- HAS BEEN DEBITED TO THE BANK ACCOUNT OF THE SAID PARTY VIDE CHEQUE NO.763980. THE SOURCE OF THE SAID AMOUNT IS THE CREDIT BALANCE OF ` 39 607/- AND THE TWO AMOUNTS DEPOSITED B Y THE PARTY ON ACCOUNT OF TRANSFER C-3194 OF ` 1 LAC AND ` 10 60 000/-. AS OBSERVED ITA NO.2911/DEL/2010 10 FROM THE SAID BANK ACCOUNT THERE IS NO CASH ENTRY PRI OR TO GIVING THE SAID AMOUNT OF ` 10 93 072/-. AT PAGE 3 THE ASSESSEE H AS ATTACHED A LETTER WRITTEN TO THE ASSESSEE BY THE SAID M/S ANKUR CULT IVATORS PVT. LTD. IN WHICH IT HAS BEEN MENTIONED BY THE SAID PARTY THAT THE SAID PARTY HAS REGULAR BUSINESS OPERATIONS WITH THE ASSESSEE AS IT S CLIENT AND THEY HAVE AVAILED LARGE CREDIT BALANCE FROM THE ASSESSEE ON ACCOUNT OF ITS BEING THEIR CLIENT. AT PAGES 4 5 AND 6 THE ASSESSEE HAS ATTACHED THE MEMBER-CLIENT AGREEMENT ENTERED INTO B Y THE ASSESSEE WITH THE SAID CLIENT AND SIMILARLY AN APPLICATION DA TED 10 TH JUNE 1999 SUBMITTED BY THE SAID PARTY TO THE ASSESSEE FOR BECOMING THE CLIENT OF THE ASSESSEE. AT PAGES 10-22 THE COPY OF MEMORANDUM AN D ARTICLES OF ASSOCIATION OF M/S ANKUR CULTIVATORS PVT. LTD. IS ATT ACHED. FROM ALL THESE DOCUMENTS IT APPEARS THAT THE SAID PARTY WAS REGUL AR CLIENT OF THE ASSESSEE AND A SUM OF ` 10 93 072.88 WAS OUTSTANDING A GAINST THE SAID CLIENT AS ON 1 ST DAY OF THE FINANCIAL YEAR 2000-01 WHICH AMOUNT WAS RECEIVED BY THE ASSESSEE AND THE RELEVANT EVIDENCES W ERE FILED BEFORE THE ASSESSING OFFICER AND CIT (A) ON THE BASIS OF WHICH IT HAS RIGHTLY BEEN CONCLUDED BY THE CIT (A) THAT IT WAS IN RESPECT OF REGULAR TRANSACTION OF SALE AND PURCHASE CARRIED ON BETWEEN TH E ASSESSEE AND ITS CLIENT. NO MATERIAL HAS BEEN BROUGHT ON RECORD B Y THE ASSESSING OFFICER OR BY THE DEPARTMENT TO CONTROVERT THESE FIN DINGS OF LEARNED CIT (A). 15. SO AS IT RELATES TO ANOTHER AMOUNT OF ` 40LAC CO NFIRMED COPY OF ACCOUNT ALONG WITH THE PERMANENT ACCOUNT NO. OF THE SAID PARTY IS FURNISHED AT PAGE 23 OF THE PAPER BOOK. THE SAID AMO UNT IS RECEIVED BY THE ASSESSEE ON 5 TH OCTOBER 2000 VIDE CHEQUE NO.330284 WHEN THE SAID PARTY WAS HAVING DEBIT BALANCE OF ` 24 99 627.50 WITH THE ASSESSEE. IMMEDIATELY AFTER THE RECEIPT OF THE SAID AMO UNT ON 5 TH OCTOBER 2000 AGAIN AN AMOUNT OF DEBIT EXISTED IN THAT ACCOUNT OF ` 17 07 462.50 ON ACCOUNT OF DIF AMT. OF DIFFERENCE BILL. THEREAFTER ON ITA NO.2911/DEL/2010 11 31 ST OCTOBER 2000 A FURTHER SUM OF ` 2 95 158.40 IS CRED ITED ON ACCOUNT OF 6400 SHARES OF PADMINI TECHNOLOGY LTD. FR OM ALL THESE ENTRIES THE CONTENTION OF THE ASSESSEE BECOME CLEAR THA T ALL THESE TRANSACTIONS ARE SUPPORTED BY THE TRANSACTIONS TOOK PLAC E WITH RESPECT TO THE SALE AND PURCHASE OF SHARES. 16. THE AFOREMENTIONED AMOUNTS OF ` 23 90 265/- ` 1 09 362.50 AND ` 17 07 462.50 REPRESENTS LOSS INCURRED BY THE SAID PAR TY OUT OF SALE AND PURCHASE OF ZEE TELEFILMS LTD. THE DETAILS OF WHIC H ARE SUPPORTED BY THE SETTLEMENT BILLS FURNISHED AT PAGES 24 25 AND 2 6 OF THE PAPER BOOK THE DETAILS OF WHICH ARE AS FOLLOWS:- I) PAGE 24 IS THE DETAILS OF SALE AND PURCHASE OF 25000 SHARES OF ZEE TELEFILMS LTD. BETWEEN THE PERIOD FROM 15 TH SEPTEMBER 2000 TO 21 ST SEPTEMBER 2000. THE ASSESSEE PURCHASED 25000 SHARES OF ZEE TELEFILMS LTD. FOR ITS AFOREMENTIONED CLIENT NAMELY M/S MAESTRO MARKETING & ADVERTISING PVT. LTD. A) 8745 SHARES ON 15 TH SEPTEMBER 2000 @ 536.77. B) 16 255 SHARES ON 15 TH SEPTEMBER 2000 @ ` 537.27 AND THUS 25000 SHARES WERE SOLD ON 21 ST SEPTEMBER 2000 FOR A PRICE OF ` 441.60 THEREFORE THE SAID PARTY HAS INCU RRED A TOTAL LOSS INCLUDING SERVICE TAX OF ` 23 90 265/- WHICH IS DE BITED BY THE ASSESSEE TO THE ACCOUNT OF THE CLIENT ON DIFFERENCE OF BILLS ON 21 ST SEPTEMBER 2000. II) 25 000 SHARES OF ZEE TELEFILMS LTD. WERE PURCHASED ON 22 ND SEPTEMBER 2000 BY THE ASSESSEE FOR THE SAID PARTY @ `44 7.28 AND THOSE WERE SOLD ON 28 TH SEPTEMBER 2000 @ `443. AS A RESULT THE SAID PARTY HAD INCURRED A LOSS OF ` 1 09 36 2.50. ITA NO.2911/DEL/2010 12 COPIES ATTACHED AT PAGE 25 OF THE PAPER BOOK. THIS A MOUNT HAS BEEN DEBITED TO THE SAID PARTY ON 28 TH SEPTEMBER 2000. III) 25000 SHARES OF ZEE TELEFILMS WERE PURCHASED ON 29 TH SEPTEMBER 2000 @ 445.93 AND SOLD ON 12 TH OCTOBER 2000 @ 377.81 THUS THE LOSS WAS INCURRED BY THE SAID PARTY OF ` 17 07 462.50 WHICH HAS BEEN DEBITED TO THE ACCOUNT O F THE SAID PARTY ON 12 TH OCTOBER 2000. THE AFOREMENTIONED TRANSACTIONS ARE ALSO SUPPORTED BY THE BILLS ISSUED BY THE ASSESSEE TO TH E SAID PARTY THE COPIES OF WHICH ARE ENCLOSED AT PAGES 27 TO 30 OF THE PAPER BOOK. 17. THE AFOREMENTIONED TRANSACTIONS HAVE REVEALED THA T THE PAYMENT OF ` 40 LAC WAS MADE BY THE SAID PARTY TO THE ASSESSEE ON ACCOUNT OF LOSS SUFFERED IN RESPECT OF TRADING OF ZEE T ELEFILMS LTD. AND THIS WAS IN THE REGULAR COURSE OF THE BUSINESS. SIMILARL Y THE DOCUMENTS IN THE SHAPE OF MEMBER-CLIENT AGREEMENT AND APPLICATION TO BECOME A CLIENT AND COPY OF MEMORANDUM & ARTICLE S OF ASSOCIATION OF THE SAID PARTY ARE ALSO ENCLOSED IN THE PAPER BOOK. 18. AFTER GOING THROUGH ALL THESE PAPERS IT IS CLEAR THAT LD. CIT (A) HAS RIGHTLY HELD THAT THESE AMOUNTS COULD NOT BE TREAT ED AS UNEXPLAINED CREDIT IN THE BOOKS OF THE ASSESSEE AS THEY R ELATE TO THE AMOUNTS RECEIVABLE BY THE ASSESSEE IN THE REGULAR COURSE OF ITS BUSINESS. IN THE ABSENCE OF ANY CONTRARY MATERIAL BROU GHT ON RECORD BY THE REVENUE WE FIND NO INFIRMITY IN THE ORDER O F THE CIT (A) VIDE WHICH THE IMPUGNED ADDITION HAS BEEN DELETED. WE DE CLINE TO INTERFERE. ITA NO.2911/DEL/2010 13 19. IN THE RESULT THE APPEAL FLED BY THE REVENUE IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 25.02.20 11. SD/- SD/- [A.K. GARODIA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 25.02.2011. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES