ITO, New Delhi v. M/s. Lokesh Secfin Pvt. Ltd., Kolkata

ITA 727/DEL/2010 | 2002-2003
Pronouncement Date: 21-01-2011 | Result: Dismissed

Appeal Details

RSA Number 72720114 RSA 2010
Assessee PAN AAACL2189C
Bench Delhi
Appeal Number ITA 727/DEL/2010
Duration Of Justice 11 month(s) 3 day(s)
Appellant ITO, New Delhi
Respondent M/s. Lokesh Secfin Pvt. Ltd., Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 21-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 21-01-2011
Date Of Final Hearing 19-01-2011
Next Hearing Date 19-01-2011
Assessment Year 2002-2003
Appeal Filed On 18-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES D: NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER ITA NO. 727/DEL/2010 ASSESSMENT YEAR: 2002-03 INCOME TAX OFFICER VS. LOKESH SECFIN PVT. LTD. WARD 4(4) P-41 PRINCEP STREET NEW DELHI. 6 TH FLOOR KOLKATA. AAACL2189C (APPELLANT) (RESPONDENT) & CROSS OBJECTION NO. 325/DEL/2010 ASSESSMENT YEAR: 2002-03 LOKESH SECFIN PVT. LTD. VS. INCOME TAX OFFICER P-41 PRINCEP STREET WARD 4(4) 6 TH FLOOR KOLKATA. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.K. MONGA DR RESPONDENT BY : SHRI MA NOJ KUMAR CA ORDER PER I.P. BANSAL J.M. THE APPEAL IS FILED BY THE REVENUE AND CROSS OBJEC TION BY THE ASSESSEE. BOTH OF THEM ARE DIRECTED AGAINST ORDER PASSED BY LD. CIT(A) DATED 22.12.2009 FOR A.Y. 2002-03. ITA NO. 727/D/10 & CO NO. 325/DEL/10 2 2. GROUNDS OF APPEAL BY REVENUE ARE AS UNDER: - 1. THE ORDER OF THE LD. CIT(A) IS ERRONEOUS AND C ONTRARY TO FACTS AND LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 7 25 000/- MADE BY AO MADE U/S 68 OF THE I.T. ACT ON ACCOUNT OF UNEXPLAIN ED CASH CREDIT. 2.1 THE CIT(A) IGNORED THE FINDINGS RECORDED BY AO AND THE FACT THAT THE ASSESSEE DID NOT DISCHARGE THE ONUS OF PROVING THE CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS. 3. THE APPELLANT CRAVES LEAVE TO ADD TO ALTER OR AMEND ANY GROUNDS OF APPEAL RAISED ABOVE AT THE TIME OF THE HEARING. GROUNDS OF CROSS OBJECTION ARE AS UNDER: - 1. THAT LOOKING INTO THE FACTS AND CIRCUMSTANCES O F THE CASE THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT VACATIN G THE ASSESSMENT ORDER ON ACCOUNT OF FRAMING IMPUGNED ASSESSMENT ORD ER WITHOUT SERVING NOTICE U/S 148 ON THE APPELLANT. HENCE TH E WHOLE ASSESSMENT ORDER AS SUCH MAY BE VACATED. 2. THAT LOOKING INTO THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT VACATIN G THE ASSESSMENT ORDER ON ACCOUNT OF FRAMING IMPUGNED ASSESSMENT ORD ER WITHOUT ISSUING NOTICE U/S 143(2) IN RESPONSE TO RETURN FIL ED BY THE APPELLANT. HENCE THE WHOLE ASSESSMENT ORDER AS SUCH MAY BE VA CATED. 3. THAT LOOKING INTO THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT VACATIN G THE ASSESSMENT ORDER ON ACCOUNT OF FRAMING IMPUGNED ASSESSMENT ORD ER WITHOUT HAVING JURISDICTION UNDER THE ACT TO ASSESS THE CAS E. HENCE THE WHOLE ASSESSMENT ORDER AS SUCH MAY BE VACATED. 4. THAT LOOKING INTO THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT VACATIN G THE ASSESSMENT ORDER ON ACCOUNT OF FRAMING IMPUGNED ASSESSMENT ORD ER WITHOUT ITA NO. 727/D/10 & CO NO. 325/DEL/10 3 ASSUMING JURISDICTION U/S 147 AS THE LD. AO WAS NOT HAVING ANY REASON TO BELIEVE. HENCE THE WHOLE ASSESSMENT ORD ER AS SUCH MAY BE VACATED. 5. THAT LOOKING INTO THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THERE IS NO MATERIAL WHICH HAS NEXUS WITH THE FORMA TION OF REASON TO BELIEVE THAT INCOME OF THE APPELLANT HAS ESCAPED AS SESSMENT. IT HAS TO BE HELD THAT PURPORTED REASONS RECORDED ARE HIGH LY VAGUE INDEFINITE FAR FETCHED AND REMOTE AND COULD NOT B E ANY STANDARD OF IMAGINATION LEADING TO A CONCLUSION OF ESCAPEMENT O F INCOME AND THEY ARE MERELY PRESUMPTION IN NATURE. THEREFORE PROCEEDING HAS BEEN INITIATED ONLY FOR THE PURPOSE OF INVESTIGATIO N AND HENCE NOTICE ISSUED U/S 148 OF THE ACT IS ILLEGAL AND VOID AB-IN ITIO. HENCE THE ASSESSMENT BASED ON SUCH NOTICE MAY BE VACATED. 6. THE APPELLANT CRAVES LEAVE TO ADD DELETE OR SUB STITUTE ANY GROUNDS OF CROSS OBJECTION AND ALL THE ABOVE GROUNDS ARE WI THOUT PREJUDICE TO EACH OTHER. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FINAN CING AND INVESTMENT RETURN OF INCOME WAS FILED AT NIL UNDER THE REGULAR PROVISIONS AND BOOK PROFITS WERE RETURNED AT RS. 1 954/-. SUB SEQUENTLY THE ASSESSMENT WAS REOPENED. THE AO PROCEEDED TO DETER MINE THE INCOME OF THE ASSESSEE U/S 144/147 OF THE ACT AS THERE WAS NO FULL COMPLIANCE BY THE ASSESSEE. FROM THE BANK ACCOUNT OF THE ASSESSEE IN CENTURIAN BANK OF PUNJAB THE AO NOTICED THAT THERE WAS CERTAIN DEPOSI TS AND FOR TWO DEPOSITS I.E. RS. 2 25 000/- AND 5 LAKH ON21.12.2001 AND 19. 2.02 THE AO REJECTED THE EXPLANATION OF THE ASSESSEE AND BOTH THESE DEPO SITS HAVE BEEN DISCUSSED BY THE AO AT PAGE 3 AND 4 OF THE IMPUGNED ORDER. FOR RS. ITA NO. 727/D/10 & CO NO. 325/DEL/10 4 2 25 000/- THE ASSESSEE VIDE ITS LETTER DATED 24.12 .07 SUBMITTED THAT THE SAID AMOUNT WAS RECEIVED BY IT VIDE CHEQUE NO. 0317 26 FROM M/S NANRA INTERNATIONAL AGAINST THE SALE OF SHARES. THE STAT EMENT OF BANK ACCOUNT OF THE SAID CONCERN WAS REQUISITION BY THE AO AND IT W AS FOUND THAT IT WAS NOT SHOWING THE CORRESPONDING DEBIT ENTRY. HOWEVER AO FOUND THAT IN THE BANK ACCOUNT OF M/S KRISHNA STOCK & SHARES THE SIMILAR A MOUNT WAS DEBITED IN THE NAME OF ASSESSEE ON 21.12.01 AND ACCORDING TO A O THE SAID CONCERN M/S KRISHNA STOCK & SHARE WAS AN ACCOMMODATION ENTR Y OPERATOR ACCORDING TO INVESTIGATION CONDUCTED BY DIRECTORATE OF INCOME TAX INVESTIGATION AND THEREFORE THE AO TREATED THE SA ID AMOUNT AS UNEXPLAINED DEPOSIT IN THE HANDS OF THE ASSESSEE. FOR RS. 5 LA KH THE SAME WAS ALSO EXPLAINED TO BE RECEIVED FROM M/S NANRA INTERNATION AL IN TWO PARTS ONE OF RS. 2 LAKH AND OTHER OF RS. 3 LAKH. THE AO FOUND T HAT THE SAID SUM OF RS. 2 LAKH WAS DEBITED TO THE ACCOUNT OF M/S NANRA INTERN ATIONAL. HOWEVER TAKING INTO ACCOUNT THE FACT THAT NANRA INTERNATION AL WAS ALSO FOUND TO BE ENTRY OPERATOR HE DISBELIEVE THE SAME. FOR RS. 3 LAKH THE AO OBSERVED THAT ASSESSEE DID NOT FURNISH ANY EVIDENCE HENCE T HE SAME IS UNEXPLAINED. IN THE CIRCUMSTANCES A SUM OF RS. 7 25 000/- WAS TREATED AS UNEXPLAINED DEPOSITS IN THE HANDS OF THE ASSESSEE ACCORDINGLY ADDED TO THE INCOME OF THE ASSESSEE. 4. BEFORE CIT(A) IT WAS SUBMITTED THAT THE SAID AM OUNT IS NOT UNEXPLAINED AMOUNT IN THE HANDS OF THE ASSESSEE THE SAME RELATED TO SALE ITA NO. 727/D/10 & CO NO. 325/DEL/10 5 OF SHARES PURCHASED LONG BACK BY THE ASSESSEE. REF ERENCE WAS MADE TO THE CHART PRODUCED BEFORE HIM PROVE THAT ALL THE PA RTICULARS WERE GIVEN. THE SHARES WERE PURCHASED IN 1999 AND 2000 AND THEY WER E SOLD IN FEBRUARY 2002 AND THUS THE SAID AMOUNT WAS RECEIVED BY THE ASSESSEE AGAINST SALE OF SHARES FOR WHICH SEC. 68 COULD NOT BE INVOKED. THE PARTICULARS OF THE SALE AND PURCHASE AS MENTIONED IN THE CHART ENCLOSED AT PAGE 36 OF THE PAPER BOOK ARE AS UNDER: - NAME DISTINCTIVE NO. OF VALUE DATE MODE FROM SALE RECEIPT TO DATE OF NOS. SHARES OF OF OF WHO M VALUE MODE WHOM OF SHARE PURCHASED PURC HASE PURCHASE PAYMENT PURCHASED SOLD SALE M/S 27531-57530 30000 3 LAC 28.12.99 CH. NO. M/S BATRA 3 LAC CH. NO. M/S MKM 13.2.2 INDIGO 60 1472 INVESTMENTS 568054 FINANCE P. FASHIONS ORIENTAL BANK CORPORATION LTD. (P) LTD. OF COMMERCE PAN NO.: BANK. PAN: AARPB0667J AAACM6961H WARD 13(4) WARD 6(1) M/S 2201-4200 20000 2 LAC 28.12.99 CH. NO. M/S BATRA 2 LAC CH. NO. M/S NANRA 13.2.02 PCB 8701-19200 601472 INVESTMENTS 031732 INTERNATIONAL CON- 19201-24200 ORIENTAL PAN: AARPB0667J CORPO RATION SULTANTS 27201-28700 BANK OF COMMERCE WARD 13(4) BANK P. LTD. 32701-33700 M/S 5201-5700 22500 225000 24.4.2 000 CH. NO. M/S NKM 22500 CH. NO. M/S NAN RA 13.2.02 CHANAKYA 5701-6000 039552 FINSEC P. LTD. 2654 76 INTERNATIONAL FINVEST P. 191001-211000 BANK OF PUNJAB PAN: CORPORATIO N LTD. 246301-248000 LTD. AAACM6961H BANK ___________________________________________________ ______________________________________ 5. LD. CIT(A) HAS DELETED THE ADDITION. THE DEPART MENT IS AGGRIEVED. BEFORE CIT(A) ASSESSEE ALSO AGITATED REGARDING INI TIATION OF REASSESSMENT PROCEEDING WHICH HAS BEEN UPHELD BY LD. CIT(A). TH E DEPARTMENT IN ITS APPEAL IS AGGRIEVED WITH THE DELETION OF ADDITION A ND ASSESSEE IN ITS CROSS OBJECTION IS AGGRIEVED WITH THE FINDING OF LD. CIT( A) VIDE WHICH THE VALIDITY OF REASSESSMENT PROCEEDING HAS BEEN UPHELD. ITA NO. 727/D/10 & CO NO. 325/DEL/10 6 6. LD. DR AFTER NARRATING THE FACTS SUBMITTED THAT ASSESSEE COULD NOT PROVE THE RECEIPT OF THE AFOREMENTIONED AMOUNT HENC E AO WAS RIGHT IN ADDING THE SAME AS UNEXPLAINED DEPOSIT IN THE HANDS OF THE ASSESSEE AND LD. CIT(A) HAS WRONGLY DELETED THE SAME. 7. ON THE OTHER HAND RELYING UPON THE ORDER OF CIT (A) IT WAS PLEADED BY LD. AR THAT THE ADDITION HAS RIGHTLY BEEN DELETE D BY HIM. LD. AR DID NOT PRESS HIS CROSS OBJECTION. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO N IN THE LIGHT OF MATERIAL PLACED BEFORE US. THE SHARES WERE HELD BY THE ASSESSEE SINCE 1999 AND 2000. THE DETAILS OF SHARES AND DETAILS O F THE PARTIES FROM WHOM IT WAS PURCHASED WERE GIVEN ALONG WITH PERMANENT AC COUNT NUMBER TO THE AO. SIMILARLY THE DETAILS OF SALE OF SHARES RECEI PT OF PAYMENT AND NAME OF THE PARTY TO WHOM THESE WERE SOLD WERE ALSO GIVEN. IT IS NOT A CASE OF CASH CREDIT BUT IT IS THE CASE WHERE ASSESSEE HAS RECEI VED SALE CONSIDERATION IN RESPECT OF SHARES OWNED BY IT. NO MATERIAL HAS BEE N BROUGHT ON RECORD TO SUGGEST THAT THE ASSESSEE WAS NOT OWNER OF THOSE SH ARES. EVEN DISTINCTIVE NUMBERS OF THOSE SHARES WERE ALSO PROVIDED. THEREF ORE IT CANNOT BE SAID THAT THE SAID AMOUNT WAS UNEXPLAINED DEPOSIT IN THE HANDS OF THE ASSESSEE. IN THIS VIEW OF THE SITUATION WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) VIDE WHICH THE IMPUGNED ADDITION IS DELETED WE DECLINE TO INTERFERE IN THE DELETION AND DEPARTMENTAL APPEAL IS DISMISSED. ITA NO. 727/D/10 & CO NO. 325/DEL/10 7 9. AS THE CROSS OBJECTION HAS NOT BEEN PRESSED THE SAME IS ALSO DISMISSED. 10. IN THE RESULT THE APPEALS FILED BY THE REVENUE AS WELL AS CROSS OBJECTION FILED BY THE ASSESSEE BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.1.11 (A.K. GARODIA) (I.P. BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER * KAVITA DATED: COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT