ITO, New Delhi v. Sh. Vinay Duggal, New Delhi

ITA NOS. 3407&3408/DEL/2010 AND CO NOS. 326&327/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H NEW DELHI BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NOS. 3407 & 3408/DEL/2010 A.YRS. : 2006-07 INCOME TAX OFFICER WARD 47(3) ROOM NO. 416 4 TH FLOOR MAYUR BHAVAN CONNAUGHT PLACE NEW DELHI VS. SH. VINAY DUGGAL FLAT NO. 2131 POCKET-D-2 VASANT KUNJ NEW DELHI (PAN/GIR NO. : AGJPD2155J) AND C.O. NOS. 326&327/DEL/2010 (IN ITA NOS. 3407 & 3408 /DEL/2010) A.Y. 2006-07 SH. VINAY DUGGAL VS. INCOME TAX OFFICER FLAT NO. 2131 POCKET-D-2 WARD 47(3) VASANT KUNJ ROOM NO. 416 4 TH FLOOR MAYUR NEW DELHI BHAVAN CONNAUGHT PLACE (PAN/GIR NO. : AGJPD2155J) NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. ARVIND MONGIA CA AND VINAY DUGGAL DEPARTMENT BY : SH. AMRENDRA KUMAR SR. D.R. ORDER ORDER ORDER ORDER PER BENCH PER BENCH PER BENCH PER BENCH THE ABOVE APPEALS BEING ITA NOS. 3407 & 3408/DEL/20 10 FILED BY THE REVENUE AND CROSS OBJECTIONS BEING NO. 326 & 327 /DEL/2010 FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FOR A.Y. 2006-0 7 AND PERTAINING TO QUANTUM OF PENALTY PROCEEDINGS. ITA NOS. 3407&3408/DEL/2010 AND CO NOS. 326&327/DEL/2010 2 REVENUES APPEAL REVENUES APPEAL REVENUES APPEAL REVENUES APPEAL NO. 3407 NO. 3407 NO. 3407 NO. 3407 2. THE ISSUE RAISED IN THIS APPEAL IS THAT LD. COM MISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER U/S 69 OF THE IT ACT ON ACCOUNT OF UNEXPLA INED INVESTMENTS IN SHARES AMOUNTING TO ` 616375/-. 3. ASSESSMENT IN THIS CASE WAS FRAMED U/S 144 OF THE IT ACT. ASSESSING OFFICER NOTED THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE MADE SHARE TRANSACTION AMOUNTING TO ` 616375 /- THROUGH THE ORBIT SECURITIES PVT LTD.. ASSESSEE DID NOT FILE AN Y INFORMATION REGARDING THE SOURCE OF ABOVE INVESTMENTS. ASSESS ING OFFICER PROCEEDED TO HOLD THAT TRANSACTION IN THE SHARE AMOU NTING TO ` 616375/- IS ADDED TO THE INCOME OF THE ASSESSEE UND ER THE HEAD UNEXPLAINED INVESTMENTS U/S 69 OF THE IT ACT. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT HE WAS OF THE OPINION THAT INTE RPRETATION OF AIR INFORMATION WAS NOT PROPERLY DONE BY THE ASSESSING OFFICER AND DUE TO MISUNDERSTANDING IN THE ASSESSMENT MADE U/S 144 AN AD DITION OF ` 616375/- HAS BEEN MADE BY THE ASSESSING OFFICER A S UNEXPLAINED INVESTMENTS WHEREAS THE FACT OF THE MATTER IS THE ST ATEMENT FORWARDED BY THE INDIA BULLS SECURITIES LTD. TO THE INCOME TA X DEPARTMENT WAS SHOWING A NOTIONAL FIGURE OF VALUE OF INVESTMENT IN THE NAME OF THE ASSESSEE AS ON 31.12.2006. LD. COMMISSIONER OF INC OME TAX (APPEALS) FURTHER HELD THAT HE HAS VERIFIED THE FAC TS IN THIS MATTER AND FOUND THAT EXPLANATION GIVEN BY THE ASSESSEE IS GEN UINE. HE THEREFORE DELETED THE ADDITION OF ` 616375/-. ITA NOS. 3407&3408/DEL/2010 AND CO NOS. 326&327/DEL/2010 3 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. WE FIND THAT ASSESSEE HAS CATEGORICALLY STATED THAT HE HAD MADE INVESTMENT OF ` 50 000/- ONLY IN MUTUAL FUNDS THROUG H INDIA BULLS SECURITIES LTD. FORMERLY KNOWN AS ORBIT SECURITIES L TD. IN THIS REGARD ASSESSEE WAS CONFRONTED THAT THE AIR INFORMATION WHI CH LEAD TO THE ADDITION OF ` 616375/-. ASSESSEE HAS SUBMITTED BEFO RE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) STATEMENT OF HIS ACCOUNT FROM INDIA BULLS SECURITIES LTD. FOR THE PERIOD 1.4.2005 TO 31.3.2006 AND HAD FURTHER SUBMITTED THAT THIS IS TO FURTHER REITERAT E THAT THE ABOVE TRANSACTIONS ARE NOT CASH TRANSACTIONS BUT ONLY NOT IONAL AS THEY ARE DONE ON BESTS FUTURE SETTLEMENT. FOR THE FINANCIAL YEAR 2005-06 ACTUALLY SUFFERED A NET CASH LOSS OF ` 2 27 320/-. WE FIND THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS GIVEN A FIN DING THAT THE SUBMISSIONS OF THE ASSESSEE ARE CORRECT. ACCORDING LY WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND HENCE WE UPHOLD THE SAME. 6. IN THE RESULT THE REVENUES APPEAL BEING ITA NO . 3407 ABOVE STANDS DISMISSED. ASSESSEES CROSS OBJECTION NO. 326 ASSESSEES CROSS OBJECTION NO. 326 ASSESSEES CROSS OBJECTION NO. 326 ASSESSEES CROSS OBJECTION NO. 326 7. THIS CO IS ONLY SUPPORTIVE OF THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). SINCE WE HAVE ALREADY U PHELD THE LD. ITA NOS. 3407&3408/DEL/2010 AND CO NOS. 326&327/DEL/2010 4 COMMISSIONER OF INCOME TAX (APPEALS)S ORDER THE CO BECOMES INFRUCTUOUS AND THE SAME IS DISMISSED AS SUCH. REVENUES APPEAL REVENUES APPEAL REVENUES APPEAL REVENUES APPEAL NO. 3407 NO. 3407 NO. 3407 NO. 3407 8. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST T HE ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WHEREIN THE PENALTY PERTAINING TO THE QUANTUM OF APPEAL IN ITA NO. 3407 ABOVE HAS BEEN DELETED. THE REVENUE HAS RAISED THE GROUND THAT LD . COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CANCELLING THE PE NALTY AMOUNTING TO ` 2 38 730/-. 9. WE FIND THAT IN ITA NO. 3407 REGARDING THE QUANT UM OF APPEAL WE HAVE ALREADY UPHELD THE ORDER OF THE LD. COMMISSIONE R OF INCOME TAX (APPEALS) IN DELETING THE ADDITION MADE IN THIS REGA RD WHEN THE ADDITION MADE IS DELETED THE PENALTY IN THAT REGARD ALSO STANDS DELETED. ACCORDINGLY WE UPHELD THE ORDER OF THE LD . COMMISSIONER OF INCOME TAX (APPEALS) AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 10. IN THE RESULT REVENUES APPEAL BEING ITA NO. 3 408 STANDS DISMISSED. ASSESSEES CROSS OBJECTION NO. 32 ASSESSEES CROSS OBJECTION NO. 32 ASSESSEES CROSS OBJECTION NO. 32 ASSESSEES CROSS OBJECTION NO. 327 77 7 11. THIS CO ALSO IS SUPPORTIVE OF THE ORDER OF TH E LD. COMMISSIONER OF INCOME TAX (APPEALS). SINCE WE HAVE ALREADY U PHELD THE LD. ITA NOS. 3407&3408/DEL/2010 AND CO NOS. 326&327/DEL/2010 5 COMMISSIONER OF INCOME TAX (APPEALS)S ORDER IN ITA NO. 3408 ABOVE THE CO BECOMES INFRUCTUOUS AND THE SAME IS DISMISSE D AS SUCH. 12. IN THE RESULT ALL THE APPEALS AND CROSS OBJECT IONS FILED BY THE REVENUE AND ASSESSEE RESPECTIVELY STAND DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 24/02/2011 UP ON CONCLUSION OF HEARING. SD/- SD/- [RAJPAL YADAV] [RAJPAL YADAV] [RAJPAL YADAV] [RAJPAL YADAV] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 24/2/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES