M/s. Standard Securities & Investment Intermediates Ltd., New Delhi v. ITO, New Delhi

ITA 3509/DEL/2010 | 2001-2002
Pronouncement Date: 30-09-2011 | Result: Allowed

Appeal Details

RSA Number 350920114 RSA 2010
Bench Delhi
Appeal Number ITA 3509/DEL/2010
Duration Of Justice 1 year(s) 2 month(s) 11 day(s)
Appellant M/s. Standard Securities & Investment Intermediates Ltd., New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 30-09-2011
Date Of Final Hearing 20-09-2011
Next Hearing Date 20-09-2011
Assessment Year 2001-2002
Appeal Filed On 19-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G DELHI) BEFORE SHRI G.E. VEERABHADRAPPA HONBLE VICE PRESIDENT AND SHRI A.D. JAIN JUDICIAL MEMBER ITA NO. 3509(DEL)2010 ASSESSMENT YEAR: 2001-02 M/S. STANDARD SECURITIES & INVESTMENT INCO ME TAX OFFICER INTERMEDIATES LTD. 8/28 WEA ABDUL V. WARD 9(2) NEW DELHI. AZIZ ROAD KAROL BAGH NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: S/SHRI K. SAMPATH & V. RAJ KUMAR A DV. RESPONDENT BY: SHRI B.R.R. KUMAR SR. DR ORDER PER A.D. JAIN J.M . THIS IS ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2 001-02 AGAINST THE ORDER DATED 26.3.2010 PASSED BY THE CIT(A)-XII NEW DELHI AGAINST THE CONFIRMATION OF THE ADDITION OF A SUM OF ` 3 49 700/- BEING THE ALLEGED AMOUNT OF UNEXPLAINED CREDITS DURING THE YEAR. 2 AS PER THE ASSESSMENT ORDER INFORMATION WAS REC EIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT THAT THE ASSES SEE WAS A BENEFICIARY OF ACCOMMODATION ENTRIES AS FOLLOWS:- ITA 3509(DEL)2010 2 S.NO. BANK OF THE ASSESSEE BRANCH AMOUNT OF ENTRY ( ` ) INSTRUMENT NO. DATE ENTRY TAKE FROM 1. CANARA BANK CONNAUGHT CIRCUS 2 00 000/- 399847 23.5.00 MKM FINSEC P. LTD. 2. CANARA BANK CONNAUGHT CIRCUS 1 50 000/- 625938 03.3.01 SHRUTI FINSTOCK LTD. 3. THE AO OBSERVED THAT REGARDING THE ASSESSEES TR ANSACTIONS WITH M/S. SHRUTI FINSTOCK LTD. THE ASSESSEE HAD SUBMITTED CO PY OF ACCOUNT COPY OF SALE BILL ETC. AND THE DELIVERY CHALLAN WHICH WAS NOT SIGNED BY THE ASSESSEE RAISING DOUBTS ABOUT THE AUTHENTICITY OF THE TRANSA CTION; THAT THE AO HAD WRITTEN A LETTER TO THE AO OF M/S. SHRUTI FINSTOCK LTD. TO VERIFY THE SAID TRANSACTION CLAIMED BY THE ASSESSEE; THAT IN RESPON SE THE AO HAD SENT DETAILS OF THE SHARES PURCHASED ON DELIVERY BASIS BY SHRUT I FINSTOCK LTD. DURING THE YEAR 2000-01 AS SUBMITTED BY SHRUTI FINSTOCK L TD. TO ITS AO; THAT IN THESE DETAILS NEITHER THE NAME OF THE ASSESSEE COM PANY NOR THE SHARES CLAIMED TO BE SOLD BY IT TO SHRUTI FINSTOCK LTD. WE RE APPEARING; THAT FURTHER THE ASSESSEE COULD NOT FURNISH ANY CONFIRMATION FRO M M/S. SHRUTI FINSTOCK LTD. ; THAT THEREFORE THE ASSESSEE COULD NOT SUBST ANTIATE THE CLAIM THAT THIS ITA 3509(DEL)2010 3 INCOME STOOD ALREADY INCLUDED IN THE YEAR SINCE PA RTY-WISE DETAILS HAD NOT BEEN FILED AND DOCUMENTS WERE NOT SIGNED BY THE ASS ESSEE I.E. THE ISSUING PARTY; THAT AS PER THE COPY OF ACCOUNT OF SHRUTI F INSTOCK LTD. AS FURNISHED BY THE ASSESSEE SHRUTI FINSTOCK WAS DEBITED ON 17. 8.2000 VIDE BILL RAISED FOR ` 1 50 025.75 AND PAYMENT OF ` 1 50 000/- WAS RECEIVED ON 1.3.2001 I.E. AFTER A PERIOD OF 6 MONTHS FROM THE DATE OF THE AL LEGED TRANSACTIONS; THAT IT WAS HARD TO BELIEVE THAT A BROKER WOULD WAIT FOR SU CH A LONG PERIOD TO RECEIVE A PAYMENT FOR THE SHARES CLAIMED TO BE PHYS ICALLY DELIVERED TO THE PARTY ON 18.8.2000; THAT IT WAS UNUSUAL IN THIS TRA DE TO DELIVER SHARES WITHOUT RECEIVING THE CORRESPONDING PAYMENT AND THAT AFTER SIX MONTHS AN AMOUNT OF ` 25.75 WHICH SUPPOSEDLY INCLUDED A SERVICE TAX OF ` 10.75 BE WRITTEN OFF; THAT THE ASSESSEE WANTED TO CONTEND THAT EVEN THE S ERVICE TAX WAS PAID BY IT OUT OF ITS OWN POCKET; THAT AS PER THE BILLS FURNIS HED BY THE ASSESSEE THE SHARES OF VIKAS WSP WERE BOUGHT FOR THE ASSESSEE AT THE FOLLOWING RATES:- DATE NO.OF SHARES AMOUNT ( `) RATE 03.08.2000 100 56 985 569.85 03.08.2000 100 56 285 562.85 08.08.2000 100 36 475 367.45 ITA 3509(DEL)2010 4 4. THE AO OBSERVED THAT THERE WAS A DECLINE IN THE RATE OF SHARES IN QUESTION FROM ` 569.85 PER SHARE TO ` 367.45 PER SHARE; THAT THE ASSESSEE HAD NOT FURNISHED ANY EVIDENCE TO SUBSTANTIATE THESE RA TES; THAT THEREFORE THE ASSESSEE HAD ONLY FURNISHED FABRICATED DOCUMENTS A ND HAD MANIPULATED THE FIGURES TO RECONCILE WITH THE AMOUNT OF ACCOMMODATI ON ENTRY. 5. APROPOS THE TRANSACTION WITH M/S. M.K.M. FINSEC LTD. THE AO OBSERVED THAT A SUMMON WAS ISSUED TO SHRI MAHESH GA RG DIRECTOR OF M.K. FINSEC.LTD. TO VERIFY THE TRANSACTION CLAIMED BY TH E ASSESSEE; THAT MAHESH GARG DID NOT APPEAR NOR PRODUCED THE REQUISITE INFO RMATION; THAT AS PER COPY OF ACCOUNT FURNISHED A DD FOR ` 1 99 700/- WAS RECEIVED ON 24.2.2000 WHEREAS THE PARTY HAD BEEN DEBITED ON 31.5.2000 ON ACCOUNT OF SALE OF SHARES OF NALCO; THAT THIS MEANT THAT THE PAYMENT W AS RECEIVED EVEN BEFORE THE TRANSACTION TOOK PLACE; THAT IN THE STOC K MARKET THE SHARE PRICES FLUCTUATE EVERY NOW AND THEN; THAT AS SUCH IT WAS NOT QUESTIONABLE AS TO HOW THE AMOUNT OF TRANSACTION WAS PRE-DETERMINED BY THE ASSESSEE AND M.K. M. FINSEC; THAT FURTHER A COPY OF DE MAT ACCOUNT HAD BEEN FURNISHED BY THE ASSESSEE CLAIMING DELIVERY OF SHARES OF NALCO WITH THE REMARKS TO JUARI INVESTMENTS LTD.; THAT IF IN THE ABSENCE OF DE MA T ACCOUNT OF THE RELEVANT PARTY AND THE DETAILS OF ITS DP IT COULD NOT STAND CONCLUSIVELY PROVED THAT THE SHARES WERE DELIVERED TO THE SAID PARTY ONLY. ITA 3509(DEL)2010 5 6. IN THIS MANNER THE AO MADE THE ADDITION OF ` 3 49 700/- ON ACCOUNT OF UNEXPLAINED CREDITS DURING THE YEAR. 7. BY VIRTUE OF THE IMPUGNED ORDER THE LD. CIT(A) CONFIRMED THE ADDITION. 8. AGGRIEVED THE ASSESSEE IS IN APPEAL. 9. CHALLENGING THE IMPUGNED ORDER THE LEARNED COUN SEL FOR THE ASSESSEE HAS CONTENDED THAT THOUGH IT WAS SPECIFICALLY ARGUE D BEFORE THEM NEITHER OF THE AUTHORITIES BELOW HAVE TAKEN INTO CONSIDERATION THE FACT THAT IN THE SALE BILL FURNISHED BY THE ASSESSEE THE NAME OF THE PAR TY WAS MENTIONED AS SHRUTI FINSTOCK A/C WHEREAS A COPY OF THE ACCOUNT AND OF T HE DELIVERY CHALLAN THE NAME OF THE PARTY WAS SHRUTI FINSTOCK PVT. LTD.; THAT IT WAS DUE TO A BONA FIDE INADVERTENT MISTAKE; THAT THE ASSESSEE IS A SH ARE BROKER A MEMBER OF THE NATIONAL STOCK EXCHANGE OF INDIA LTD. AND IS ENGAGE D IN THE BUSINESS OF BROKING DEALING IN SHARES OF SECURITY; THAT THE PA YMENTS WERE RECEIVED FROM THE TWO COMPANIES IN THE CONTEXT OF REGULAR DEALING S AND TRADE TRANSACTIONS; THAT APROPOS M/S. SHRUTI FINSTOCK LTD. IT HAD BOUG HT SHARES OF VIKAS WSP FOR SHRUTI FINSTOCK AND A PAYMENT OF ` 1 50 000/- WAS RECEIVED FOR THE SAME; THAT THE SHARES WERE IN PHYSICAL FORM; THAT A CASH OF ACCOUNT COPY OF SALE DEED AND PHYSICAL DELIVERY CHALLAN WERE DULY PRODUC ED BEFORE THE AO; THAT ITA 3509(DEL)2010 6 THE AMOUNT WAS DULY ACCOUNTED FOR IN THE BOOKS OF A CCOUNT AND NO CREDIT CAN BE INCLUDED IN THE INCOME OF THE ASSESSEE TWICE OVE R; AND THAT THE TWO CHEQUES WERE FOR SHARES PURCHASED. 10. THE LD. DR ON THE OTHER HAND HAS PLACED STRON G RELIANCE ON THE IMPUGNED ORDER CONTENDING THAT IT WAS THE ASSESSEE S ONUS TO ESTABLISH THE GENUINENESS OF THE TRANSACTIONS AND THE IDENTITY AN D CREDIT WORTHINESS OF THE PARTIES; THAT THE ASSESSEE MISERABLY FAILED TO DISC HARGE ITS ONUS; THAT IN THE FINDINGS OF THE INVESTIGATION WING OF THE DEPARTMEN T THE SPECIFIC NAME OF THE BANK THE AMOUNT THE CHEQUE NUMBER AND DATE WE RE GIVEN AND IT WAS CLEARLY SETTLED THAT THE CONCERNED ENTRIES WERE HAW ALA ENTRIES RECEIVED FROM HAWALA ENTRIES PROVIDERS; THAT THE ASSESSEE DID NOT PROVIDE ANY INFORMATION AT ANY STAGE; THAT THEREFORE THE LD. CIT(A) WAS JU STIFIED IN CONFIRMING THE ADDITION CORRECTLY MADE ; AND THAT THEREFORE THERE BEING NO MERIT THE APPEAL FILED BY THE ASSESSEE BE DISMISSED. 11. THE LD. CIT(A) IT IS SEEN CONFIRMED THE ADDIT ION MADE BY MAKING INTER ALIA THE FOLLOWING OBSERVATIONS APROPOS THE ASSESSMENT ORDER:- THE AO HAS BROUGHT ON RECORD THAT REGARDING TRANSACTIONS WITH M/S. SHRUTI FINSTOCK LTD. THE AS SESSEE SUBMITTED COPY OF ACCOUNT COPY OF SALE BILL ETC. AND THE DEL IVERY CHALLAN WHICH IS NOT SIGNED BY THE ASSESSEE AND HENCE RAISES DOUB T ABOUT AUTHENTICITY... ITA 3509(DEL)2010 7 12. THE AO AT PAGE 2 IN PARA 1.1 OF THE ASSESSMENT ORDER HAS OBSERVED INTER ALIA THAT:- ON PERUSAL IT WAS NOTED THAT IN THE SALE BI LL FURNISHED BY THE ASSESSEE THE NAME OF THE CLIENT WAS MENTION ED AS SHRUTI FINSTOCK LTD . WHEREAS IN THE COPY OF ACCOUNT AND ON THE DELIVERY CHALLAN THE NAME OF THE CLIENT/PARTY WAS MENTIONED AS SHRUTI FINVEST PVT. LTD. 13. NOW THE ABOVE OBSERVATION OF THE AO HAS NOT BE EN TAKEN INTO CONSIDERATION AT ALL BY THE LD. CIT(A) CULMINATING IN AN ORDER WHICH IS A RESULT OF MIS-READING NON-READING AND NON-CONSIDER ATION OF A MATERIAL FACT BROUGHT ON RECORD. THE SAID FACT WAS INTER LIA THE BASIS OF THE ADDITION MADE BY THE AO. THE LD. CIT(A)S ORDER HOWEVER STANDS PASSED IN COMPLETE OBLIVION OF THIS FACT THEREBY PREJUDICING THE CASE OF THE ASSESSEE. 14. THEREFORE WE FIND IT A FIT CASE TO BE REMITTE D TO THE FILE OF THE LD. CIT(A) TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW ON TAKING INTO CONSIDERATION THE ABOVE FACT AS MENTIONED IN THE AS SESSMENT ORDER AND RECORDING A REASONED FINDING THEREON. THE ASSESSE E SHALL BE AFFORDED ADEQUATE OPPORTUNITY IN THIS REGARD. ITA 3509(DEL)2010 8 15. IN THE RESULT FOR STATISTICAL PURPOSES THE AP PEAL OF THE ASSESSEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.09.2011. SD/- SD/- (G.E. VEERABHADRAPPA) (A.D. JAIN) VICE PRESIDENT JUDICIAL MEMBER DATED: 30.09.2011 *RM COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR