ITO, New Delhi v. Sh. Ankur Garg,, New Delhi

ITA 416/DEL/2012 | 2004-2005
Pronouncement Date: 27-04-2015 | Result: Dismissed

Appeal Details

RSA Number 41620114 RSA 2012
Assessee PAN ACSPG1146K
Bench Delhi
Appeal Number ITA 416/DEL/2012
Duration Of Justice 3 year(s) 3 month(s)
Appellant ITO, New Delhi
Respondent Sh. Ankur Garg,, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 27-04-2015
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 27-04-2015
Date Of Final Hearing 20-04-2015
Next Hearing Date 20-04-2015
Assessment Year 2004-2005
Appeal Filed On 27-01-2012
Judgment Text
DELHI BENCH A: NEW DELHI BEFORE SHRI N.K.SAINI ACCOUNTANT MEMBER AND SHRI A. T. VARKEY JUDICIAL MEMBER ITA NO.416/DEL/2012 (ASSESSMENT YEAR: 2004 - 05) ITO WARD - 25(2) ROOM NO.304 - A D - BLOCK VIKAS BHAWAN NEW DELHI VS. ANKUR GARG 259 RAJDHANI ENCLAVE PITAMPURA NEW DELHI PAN:ACSPG1146K (APPELLANT) (RESPONDENT) DATE OF HEARING 20.04.2015 DATE OF PRONOUNCEMENT 27 . 04.2015 O R D E R PER A. T. VARKEY JUDICIAL MEMBER THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 29 . 11 .201 1 PASSED BY THE LD. CIT(A) - XXIV NEW DELHI PERTAINING TO ASSESSMENT YEAR 200 4 - 0 5 . 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL: - (I) DELETING THE ADDITION OF RS. 20 0 0 000/ - MADE U/S. 68 OF THE INCOME TAX ACT 1961( HEREIN AFTER THE ACT) (II) NOT CONSIDERING THE ABOVE FACTS AND IGNORING THE CLEAR CUT CALCUTTA HC DECISION IN UNIT CONSTRUCTION CO. LTD. VS. JCIT 260 ITR 189 AND HONBLE SUPREME COURT OF INDIA DECISION IN SREELEKAH BANNERJEE VS. CIT 49 ITR 112 (SC) WHEREIN ASSESSEE IS OBLIGATED TO PROVE THE SOURCE OF MONEY INCLUDING THE NATURE AND SOURCE SPECIALLY WHEN SH. MAHESH GARG HAD ADMITTED THAT HE HAD PROVIDED ACCOMMODATION ENTRIES. 3 APPROPOS SOLE GROUND ABOUT D ELETION OF ADDITION OF RS. 20 LA KHS MADE U/S 68 OF THE ACT. APPELLANT BY : B.R.R.KUMAR SR DR RESPONDENT BY : SH.VED JAIN ADV RAMA JAIN CA V. MOHAN CA PAGE 2 OF 5 2 3 . THE FACTS IN BRIEF ARE THAT A N INFORMATION WAS RECEIVED FROM DI(INV.) NEW DELHI THAT THE ASSESSEE HAD TAKEN AN ACCOMMODATION ENTRY OF RS. 20 00 000/ - RECEIVED FROM PERFORMANCE TRADING & INVESTMENT VIDE INSTRUMENT DRAWN ON STATE BANK OF BIKANER AND JAIPUR NEW ROHTAK ROAD NEW DELHI AND THE SAID AMOUN T HAS BEEN CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE IN CANARA BANK TRI NAGAR DELHI VIDE INSTRUMENT DATED 7.6.2003. THE AO RECORDED HIS SATISFACTION IN ACCORDANCE TO LAW AND REOPENED THE CASE U/S. 147 OF THE INCOME TAX ACT 1961 (HEREIN AFTER THE ACT) AND ISSUED NOTICE U/S. 148 ON 26.3.2010. THEREAFTER STATUTORY NOTICE U/S. 142(1) WAS ALSO ISSUED TO THE ASSESSEE. SINCE BOTH THE NOTICES WERE NOT RESPONDED TO BY THE ASSESSEE ANOTHER NOTICE U/S. 142(1) WAS SERVED THROUGH AFFIXTURE AT THE LAST KNOW N ADDRESS OF THE ASSESSEE. FINAL OPPORTUNITY WAS GIVEN BY THE AO FOR 11.11.2010 ON WHICH DATE LD AR ATTENDED ON THE BEHALF ON THE ASSESSEE AND WAS GIVEN A COPY OF THE REASONS FOR REOPENING OF THE ASSESSMENT. SINCE THERE WAS NO COMPLIANCE THEREAFTER THE A O PASSED AN ORDER U/S. 147/144 OF THE ACT ASSESSING THE INCOME OF THE ASSESSEE AT RS. 22 LACS VIDE HIS ORDER DATED 0 6 .12.2010 . 4. AGAINST THE AFORESAID ORDER OF THE ASSESSING OFFICER ASSESSEE APPEALED BEFORE THE LD. CIT(A) WHO VIDE HIS ORDER DATED 29 . 11 .201 1 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5 . NOW THE REVENUE IS IN APPEAL BEFORE US. 6. LD. DR RELIED UPON THE ORDER OF THE AO . 7. ON THE CONTRARY LD. COUNSEL OF THE ASSESSEE HAS RELIED UPON THE ORDER OF THE LD. CIT(A) AND REQUESTED TH AT THE SAME MAY BE UPHELD. 8 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. LD. COUNSEL OF ASSESSEE BEFORE US HAS SUBMITTED THAT AO MADE ADDITION OF AN AMOUNT OF RS.20 00 000 / - RECEIVED DURING THE YEAR BY THE ASSESSEE ON ACCOUNT OF CERTAIN SALE OF SHARES ON THE BASIS OF SOME INFORMATION RECEIVED FROM THE INVESTIGATING WING HOLDING THE SAME TO BE BOGUS. HE SUBMITTED THAT ASSESSEE HAS SOLD SHARES OF MLS COMPUTER EMBROIDERY HOUSE PVT. LTD. DURING PAGE 3 OF 5 3 THE YEAR PURCHASED BY HIM IN EARLIER YEARS I.E . IN THE F.Y. 1997 - 98 AND 2000 - 2001. AS THE P URCHASES WERE MADE IN EARLIER YEARS SAME HAVING BEEN ACCEPTED BY THE D EPARTMENT IN THOSE YEARS THUS HOLDING OF SHARES BY THE ASSESSEE CANNOT BE DOUBTED. LD COUNSEL OF THE ASSESSEE FURTHER STATED THAT T HE CASE OF ASSESSEE FOR AY. 2001 - 02 WAS REOPENED UNDER SECTION 148 OF THE ACT TO VERIFY THE TRANSACTION AND THE SAME WAS ACCEPTED VIDE ORDER DATED 30 - 12 - 2008 . TO SUPPORT HIS CLAIM THE ASSESSEE HAS FILED A NUMBER OF EVIDENCES TO PROVE THE GENUINENESS OF THE TRA NSACTIONS. HE FURTHER SUBMITTED THAT THE AO HAS NOT BEEN ABLE TO FIND ANY DISCREPANCY IN THE SAME. THE ASSESSEE HAS ALSO FILED THE ANNUAL RETURN FILED BY MLS COMPUTER EMBROIDERY HOUSE PVT. LTD. WHICH GOES TO PROVE THAT THESE SHARES ARE BEING HELD BY PERFO RMANCE TRADING & INVESTMENT PVT. LTD. EVEN AS ON 30.9.2010. THE AO HAS NOT DOUBTED THE INVESTMENT MADE IN EARLIER YEARS AND THE SALE THEREOF IN THE YEAR UNDER CONSIDERATION. LD. COUNSEL FURTHER SUBMITTED THAT THE AO IS SIMPLY MAKING ADDITION BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT IGNORING THE FACT THAT THE AMOUNT RECEIVED IS NOT SHARE CAPITAL OR LOAN. THE AMOUNT RECEIVED IS SALE PROCEEDS OF INVESTMENTS. FURTHER THERE IS NO ONUS ON THE SELLER TO ESTABLISH THE CREDIT WORTHINESS OF THE BUYER. PROVISIONS OF SECTION 40A(3) REGARDING CASH PAYMENT ARE APPLICABLE ON PURCHASER NOT ON SELLERS. THE ASSESSEE CAN MAKE SALES EVEN IN CASH. IN THE PRESENT CASE THE ASSESSEE HAS EVEN ESTABLISHED THE IDENTITY OF THE BUYER. THE ASSESSEE HAS PRODUCED BUYER'S BAN K ACCOUNT SOURCE OF MONEY IN THE BANK ACCOUNT FROM WHICH PAYMEN T S BEEN MADE TO ASSESSEE. THE BUYER IS BEING ASSESSED TO TAX AND EVEN REFUND OF RS. 57030/ - HAS BEEN ISSUED TO IT . ASSESSMENT IN SCRUTINY HAS BEEN COMPLETED U/S 143(3). ALL THE DOCUMENTS GOES BEYOND DOUBT TO PROVE THE GENUINENESS AND CREDITABILITY OF THE TRANSACTION. LD. COUNSEL OF THE ASSESSEE STATED THAT T HE AO HAS NOT BEEN ABLE TO FIND ANY ERROR OR DISCREPANCY IN THE DOCUMENTS. THE AO ON THE CONTRARY HAS SIMPLY REFERRED TO SOME STATEMENTS EVEN WITHOUT QUOTING SUCH STATEMENTS WITHOUT POINTING OUT ASSESSEE'S NAME AND MORE OVER WITHOUT APPRECIATING THE CONTENTS OF SUCH STATEMENTS AS IS EVIDENT FROM THE REASON RECORDED WHERE HE IS TALKING ABOUT GIFT/LOAN/SHARE APPLICATION/ CAPITAL GAIN. THERE IS NO INCOME NO EXEMPTION PAGE 4 OF 5 4 CLAIMED BY THE ASSESSEE. HENCE T HE CIT(A) HAS PASSED REASONED ORDER TAKING INTO CONSIDERATION ALL THE ABOVE FACTS. IN VIEW OF ABOVE SUBMISSIONS LD. COUNSEL SUBMITTED THAT THE DECISION OF THE LD. CIT(A) IN DELETING THE ADDITI ON OF RS. 20 LACS MAY BE UPHELD. 9. WE FIND THAT FACT IN THIS CASE IS THAT THE SHARES WERE PURCHASED BY THE ASSESSEE IN EARLIER YEARS AND NOT IN THE YEAR UNDER CONSIDERATION. MOREOVER THE DEPARTMENT HAS RE - OPENED THE CASE OF A.Y. 2001 - 02 AND SATISFI ED ITSELF THAT THE SHARES WERE PURCHASED BY THE ASSESSEE. THUS THE INVESTMENT OF THE ASSESSEE IN THE SHARES OF M/S. COMPUTER EMBROIDERY HOUSE PVT. .LTD. IS NOT IN DOUBT. THE FACT ALSO REMAINS THAT ALL THE EVIDENCES COLLECTED AGAINST PERFORMANCE TRADING & INVESTMENT PVT. LTD. (BUYER) BEING A BOGUS ENTITY OR THE STATEMENTS RECORDED BY THE INVESTIGATION WING FROM SH. MAHESH GARG OR SH. TRILOK CHAND BANSAL WERE ALL GATHERED ADMITTEDLY BEHIND THE BACK OF THE ASSESSEE WHO WAS NEVER CONFRONTED BY THESE EVIDENCE S AND WAS NEVER ALLOWED AN OPPORTUNITY TO CROSS - EXAMINE THE WITNESSES WHOSE STATEMENTS WERE RECORDED WHICH CANNOT BE USED AGAINST THE ASSESSEE BECAUSE IT IS AGAIN ST NATURAL JUSTICE AND THE ADMISSIBILITY OF SUCH EVIDENCE HAS BEEN FROWNED UPON BY THE HONBL E SUPREME COURT . WE ALSO NOTE THAT LD. CIT(A) HAS OBSERVED THE IT HAS ALSO NOT BEEN ESTABLISHED BY THE DEPARTMENT THAT ALL THE TRANSACTIONS ENTERED INTO BY M/S. PERFORMANCE TRADING & INVESTMENT PVT. LTD. WERE BOGUS. T HE LD. CIT(A) HAS RIGHTLY OBSERVED THAT THERE IS NO EVIDENCE OF RS.20 LACS GOING OUT OF THE COFFERS OF THE ASSESSEE TO M/S. PERFORMANCE TRADING & INVESTMENT PVT. LTD. AND THEN COMING BACK BY CHEQUE. IN FACT THE ASSESSEE HAS PLACED ON RECORD THE ANNUAL RETURN FILED BY M/S. COMPUTER EMBROID ERY HOUSE PVT. LTD. 259 RAJDHANI ENCLAVE PITAMPURA DELHI - L10085 WITH THE REGISTRAR OF COMPANIES FOR THE AGM HELD ON 30.09.2010 WHEREIN 398 120 SHARES ARE STILL SHOWN HELD BY M/S. PERFORMANCE TRADING & INVESTMENT PVT. LTD. WHICH ALSO GOES ON TO PROVE THE GENUINENESS OF THE TRANSACTION. IN VIEW OF THE ABOVE LD. CIT(A) WAS OF THE OPINION THAT THE AO HAS NOT BEEN ABLE TO ESTABLISH CONCLUSIVELY HIS CASE THAT THE ASSESSEE HAS ENTERED INTO FRAUDULENT TRANSACTION TO CONVERT HIS UNACCOUNTED INCOME BY PAYING CASH PAGE 5 OF 5 5 AND COMMISSION AND THEN PROCURING A CHEQUE. IN THE LIGHT OF THE AFORESAID FACTS AND CIRCUMSTANCES WE FIND THAT T HE ADDITION OF RS.20 LACS U/S. 68 OF THE ACT WAS UNWARRANTED SINCE THE ASSESSEE HAS DULY DISCLOSED THESE TRANS ACTIONS IN HIS RETURN OF IN COME THEREFORE THE LD CIT (A) HAS RIGHTLY CONCLUDED THAT T HE THEORY PROPOUNDED BY THE AO OF ACCOMMODATION ENTRY OPERATORS DOES NOT HOLD GOOD IN THIS CASE BECAUSE THE DEPARTMENT HAS ITSELF ACCEPTED THE PUR CHASE OF SHARES IN EARLIER YEARS BY SCRUTINIZING TH E RETURNS OF INCOME OF THE ASSESSEE. THEREFORE THE ADDITION OF RS. 20 LACS MADE U/S. 68 OF THE ACT WAS RIGHTLY DELETED BY THE LDCIT(A) . IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS WE FIND NO INFIRMITY IN THE IMPU GNED ORDER OF THE LD CIT (A) WHICH DOE S NOT NEED ANY INTERFERENCE ON OUR PART HENCE WE UPHOLD THE SAME. THEREFORE THE ISSUE IN DISPUTE RAISED BY THE REVENUE IS REJECTED. 10 . IN THE RESULT THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 7 .04. 2015 . - S D / - - S D / - (N.K.SAINI ) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2 7 /04/2015 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT NEW DELHI