M/s Bhuvnesh Kumar Agarwal, HUF., Agra V. I.T.O.-4(1), Agra

CO 18/AGR/2011

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6508 (ITAT-AGRA)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2001-2002
• Appeal Filed On: 16-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Keywords: Unexplained cash credit; Accommodation entries
• Section: 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.453/AGR/2010 ASSESSMENT YEAR: 2001-02 INCOME TAX OFFICER-4(1), VS. M/S BHUVAN ESH KUMAR AGARWAL, HUF AGRA. B-48, KAMLA NAGAR, AGRA. (PAN: AAAHB 9031 L). (C.O. NO.18/AGR/2011) (IN ITA NO.453/AGR/2010) ASSESSMENT YEAR: 2001-02 M/S BHUVANESH KUMAR AGARWAL, HUF VS. INCOME TAX OFF ICER-4(1), B-48, KAMLA NAGAR, AGRA. AGRA. (PAN: AAAHB 9031 L). (APPELLANTS) (RESPONDENTS) REVENUE BY : SHRI A.K. SHARMA, JR. D.R. ASSESSEE BY : SHRI NAVIN GARG, ADVOCATE DATE OF HEARING : 21.10.2011 DATE OF PRONOUNCEMENT : 21.10.2011 ORDER PER H.S. SIDHU, J.M. : ITA NO.453/AGR/2010 & C.O. NO.18/AGR/2011 A.Y. 2001-02 2 THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION B Y THE ASSESSEE HAVE BEEN FILED AGAINST THE IMPUGNED ORDER DATED 21.09.2 010 PASSED BY THE LD. CIT(A)- II, AGRA FOR THE ASSESSMENT YEAR 2001-02 ON THE FOL LOWING GROUNDS :- GROUNDS IN ITA NO.453/AGR/2010 1) THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S)-II, AGRA HAS ERRED IN LAW AND ON FACTS IN HOLDING THE NOTICE U/S 148 AS NULL AND VOID IGNORING THE PROVISIONS OF SECTION 292BB OF TH E IT ACT,1961. 2) THAT THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEAL)-II, AGRA HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF ` 10,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUN T OF UNEXPLAINED CREDIT ENTRIES WITHOUT PROPERLY APPRECI ATING THE FACTS OF THE CASE MENTIONED IN THE ASSESSMENT ORDER. 3) THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS )-II, AGRA HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISAL LOWANCE OF ` 30,822/- MADE BY THE ASSESSING OFFICER ON ACCOUNT O F INTEREST ON SUCH UNEXPLAINED CREDIT ENTRIES WITHOUT PROPERLY AP PRECIATING THE FACTS OF THE CASE MENTIONED IN THE ASSESSMENT ORDER . 4) THAT THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-II, AGRA BEING ERRONEOUS IN LAW AND ON FACTS DESERVES T O BE QUASHED AND THAT OF THE ASSESSING OFFICER DESERVES TO BE RESTOR ED. 5) THAT THE APPELLANT CRAVES LEAVE TO ADD OR ALTER ANY OR MORE GROUND OR GROUNDS OF APPEAL AS MAY BE DEEMED FIT AT THE TIME OF HEARING OF APPEAL. ITA NO.453/AGR/2010 & C.O. NO.18/AGR/2011 A.Y. 2001-02 3 GROUNDS IN C.O. NO.18/AGR/2011 1) BECAUSE IN ANY VIEW, THE LD. C.I.T. (A) HAS RIG HTLY HELD THE NOTICE U/S 148 ON THE BASIS OF INVALID REASONS AS N ULL AND VOID-AB- INITIO IN THE FACTS AND LAW OF THE CASE. 2.1 BECAUSE IN ANY VIEW, THE LD. C.I.T. (A) HAS RIG HTLY DELED THE ADDITION OF ` 10,00,000/- OF LOANS TAKEN, AFTER CONSIDERING IN DE TAILS, THE FACTS AND LAW OF THE CASE. 2.2 BECAUSE IN ANY VIEW THE LD. C.,I.T. (A) AGRA HA S RIGHTLY DELETED THE ADDITION OF ` 30,822/- ON ACCOUNT OF INTEREST ON ABOVE LOANS. 2.3 BECAUSE THE LD. C.I.T. (A) HAS HELD THAT ASSESS ING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION, AFTER CONSIDE RING THE FACTS & CIRCUMSTANCES OF THIS CASE WITH REFERENCE TO GANGA RAM GROUP OF CASES. 2.4 BECAUSE THE ORDER OF THE LD. C.I.T. (A) DELETIN G THE IMPUGNED ADDITION DESERVES TO BE UPHELD. 2. THE FACTS NARRATED BY THE DEPARTMENT ARE NOT DIS PUTED BY BOTH THE PARTIES, THEREFORE, NO NEED TO REPEAT THE SAME FOR THE SAKE OF CONVENIENCE. 3. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE ISSUES IN DISPUTE HAVE ALREADY BEEN DECIDED BY THIS BENCH IN FAVOUR OF THE ASSESSEE IN ITA NO.134/AGR/2006 & 206/AGR/2006 IN THE CASE OF A GRA CHEMICALS AND IN ITA NO.262/AGR/2006 IN THE CASE OF I.T.O. VS. ADITYA AG ARWAL. HE FURTHER STATED THAT THE REVENUE HAS FILED APPEAL AGAINST THE ORDER OF T HIS BENCH BEFORE THE HONBLE ITA NO.453/AGR/2010 & C.O. NO.18/AGR/2011 A.Y. 2001-02 4 HIGH COURT IN THE CASE OF ADITYA AGARWAL BUT THE HO NBLE JURISDICTIONAL HIGH COURT HAD DISMISSED THE APPEAL OF THE REVENUE ON 04 .08.2010 IN CASE NO.524 OF 2007 TITLED CIT VS. ADITYA AGARWAL. HE REQUESTED T HAT THE APPEAL FILED BY THE REVENUE MAY BE DISMISSED. 4. ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESENTA TIVE RELIED UPON THE ORDER PASSED BY THE ASSESSING OFFICER. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US. WE ALSO FIND THAT THE LD. FIRST APPELLATE AUTHORITY HAS DECIDED THE ISSUES IN DISPUTE ON THE BASIS OF ORDERS PASSED BY THIS BE NCH AS WELL AS THE ORDER OF THE HONBLE JURISDICTIONAL HIGH COURT. THE RELEVANT PO RTIONS OF THE ORDER OF THE LD. CIT(A) AT PARAGRAPH NOS.2.2 & 3, PAGE NOS.2 & 3 ARE REPRODUCED AS UNDER :- 2.2 I HAVE ANALYSED THE MATTER AND I FIND THAT HON BLE ITAT, AGRA BENCH, AGRA IN THE CASE OF AGRA CHEMICALS VIDE ITA NO.134/AGR/2006 & ITA NO.206/AGR/2006 EXAMINED THE ISSUE OF LEGALIT Y OF NOTICE ISSUED U/S 148 AND HELD AS UNDER :- ON THE BASIS OF VAGUE REPORT, THE ASSESSING OFFIC ER CANNOT MAKE A FISHILY AND ROWING ENQUIRY. IT WAS HELD IN THE CASE OF ARMINDER SINGH DHIMAN VS. ITO (2004) 269 ITR 378. IN THE CASE OF APPELLANT THERE IS NO MATERIAL BEFORE THE ASSESSING OFFICER WHICH CANNOT BE SAID TO BE SPECIFIC, RELEVANT AND RELIABL E. A LIST OF PERSONS WHO DEALT WITH GRG WITHOUT ANY SUPPORTING MATERIAL THEREIN WAS RECEIVED BY THE ASSESSING OFFICER, ON WHICH THE EXT RACTED REASON IS ITA NO.453/AGR/2010 & C.O. NO.18/AGR/2011 A.Y. 2001-02 5 BASED. THE ASSESSING OFFICER HAS NOT APPLIED HIS M IND AT ALL TO THE INFORMATION SO RECEIVED. THE CREDITORS HAVE DULY A CCEPTED HAVING MADE ADVANCE TO THIS ASSESSEE. THE ALLEGATION MADE BY THE ADIT (INV.) ARE ALSO GENERAL IN NATURE AND ARE NOT SPECI FIC. THE OBSERVATION OF THE ADIT IS BASED ON THE MATERIAL FOUND IN THE Y EAR 2002 WHEREAS THE ASSESSEES CASE IS FOR AY 07-08. THUS THERE IS NO SPECIFIC, RELEVANT, RELIABLE AND DEFINITE MATERIAL DIRECTLY R ELATED TO THE ASSESSEE AND ALSO FOR PARTICULAR ASSESSMENT YEAR. THE SATIS FACTION OF THE ASSESSING OFFICER CAN BE SUBJECTIVE BUT IT HAS TO B E BASED ON OBJECTIVE MATERIALS. THE CASE BEING OF EARLIER ASSESSMENT YE AR, THE ASSESSING OFFICER WAS REQUIRED TO APPLY HIS MIND TO THE FACTS OF THAT ASSESSEE AS DISCLOSED BEFORE HIM BUT HE HAS NOT DONE SO. THE B ANK ACCOUNT FROM WHICH LOAN WAS GIVEN HAS DULY ACCEPTED BY THE CREDI TOR. THERE WAS NO MATERIAL BEFORE HIM EXCEPT TO SUSPECT ON THE BAS IS VAGUE AND GENERAL INFORMATION BUT NO MATERIAL TO ESTABLISH TH AT TRANSACTION OF TAKING LOAN WAS BOGUS. IN VIEW OF THE FOREGOING DISCUSSION, WE ARE OF THE CONSIDERED OPINION THAT THE REASONS RECORDED FOR TAKING ACTION U/S 147 READ WITH SEC. 148, ARE NOT VALID AND HENCE THE ENTIRE REASSE SSMENT PROCEEDINGS BECOMES INVALID LEADING TO QUASHING OF THE ENTIRE R EASSESSMENT. WE ORDERED ACCORDINGLY AND QUASH THE REASSESSMENT ORDE R IN THIS YEAR BY HOLDING THE NOTICE ISSUED U/S 148 ON THE BASIS OF I NVALID REASONS AS NULL AND VOID-AB-INITIO. AS THE FACTS OF THE APPELLANTS CASE ARE SIMILAR, F OLLOWING THE JUDGEMENT OF HONBLE ITAT CITED (SUPRA), I HOLD THA T THE NOTICE ISSUED U/S 148 WAS NULL AND VOID-AB-INITIO. 3. GROUND NO.2.1 TO 2.5 AS PER THESE GROUNDS OF APPEAL, THE APPELLANT HAS A GITATED THE ADDITION OF ` 10 LACS MADE BY THE ASSESSING OFFICER. AS PER THE ASSESSMENT ORDER, THE ASSESSEE HAD RECEIVED SUM OF ` 5 LACS EACH FROM M/S KRISHNA TRADERS & M/S NITIN & CO. THESE TWO CO NCERNS ARE CONCERNS OF M/S GANGA RAM AGARWAL & CO. GROUP OF CA SES WHICH WERE INDULGING IN GIVING ACCOMMODATION ENTRIES TO V ARIOUS PEOPLES. THE MODUS OPERANDI HAS BEEN ELABORATELY DISCUSSED B Y THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. ON SIMILAR FACTS MY LD. COLLEAGUE ITA NO.453/AGR/2010 & C.O. NO.18/AGR/2011 A.Y. 2001-02 6 THE CIT(A)-I, AGRA IN THE CASE OF SHRI ADITYA AGARW AL VS. ITO-1(1), AGRA, ASSESSMENT YEAR 1998-99 HAS HELD AS UNDER :- I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE ARGUMENTS OF THE LD. REPRESENTATIVE OF THE APPE LLANT. IN MY OPINION THE APPELLANT DESERVES TO SUCCEED. IT IS A N ADMITTED POSITION THAT THE DEPOSIT HAS BEEN RECEIVED BY A/C PAYEE CHE QUE. THE DEPOSITOR IS ASSESSED TO TAX AND HAS CONFIRMED REGARDING THE DEPOSIT HAVING BEEN GIVEN BY IT. REFERENCE TO THE SEARCH IN M/S G ANGA RAM AGARWAL & CO. GROUP OF CASE AND THE FINDINGS GIVEN BY THE A SSESSING OFFICER ARE OF NO HELP IN THE FACTS AND CIRCUMSTANCES OF TH E CASE. IT HAS NOT BEEN SHOWN THAT THE DEPOSITORS HAVE EVER ADMITTED T HAT THEY WERE ENGAGED IN THE BUSINESS OF GIVING BOGUS ENTRIES. T HIS BEING THE CASE UNLESS IT IS PROVED BY THE ASSESSING OFFICER WITH S OME CONCRETE EVIDENCE THAT IT WAS THE ASSESSEES UNACCOUNTED MON EY WHICH WAS ROUTED THROUGH THE DEPOSITOR, THE DEPOSIT IN REFERE NCE CANNOT BE BROUGHT TO TAX U/S 68 OF THE I.T. ACT,1 1961. THIS VIEW FINDS SUPPORT FROM THE GAUHATI HIGH COURT DECISION IN THE CASE OF NEMI CHAND KOTHARI VS. CIT 264 ITR 254 (GAUHATI). REFERENCE I S ALSO MADE TO THE GAUHATI HIGH COURT DECISION IN THE CASE OF DCIT VS. ROHINI BUILDERS (2003) 127 TAXMAN 523 (GIJ) AGAINST WHICH THE SLP O F THE DEPARTMENT HAS BEEN DISMISSED (254 ITR (ST.) 275). UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITION MADE BY THE ASSESSING OFFICER U/S 68 AND CORRESPONDING DISALLOWANCE OF IN TEREST IN RESPECT OF THIS CASH CREDIT CANNOT BE SUSTAINED. THE ADDIT IONS MADE BY THE ASSESSING OFFICER ARE DIRECTED TO BE DELETED. IT IS FURTHER NOTED THAT THE APPEAL FILED BY THE DE PARTMENT IN THE ABOVE CASE (SUPRA) WAS DISMISSED BY THE HONBLE ITA T, AGRA BENCH, AGRA VIDE ORDER IN ITA NO.262/AGR/2006 DATE 25.2.07 . APPEAL TO THE HIGH COURT OF THE DEPARTMENT HAS BEEN DISMISSED BY THE HONBLE HIGH COURT, ALLAHABAD VIDE APPEAL NO.524 OF 2007 DATED 4 .8.10. AS THE FACTS ARE SIMILAR IN THE APPELLANTS CASE, THEREFOR E, FOLLOWING THE ORDERS AS REFERRED ABOVE, I DELETE THE ADDITION MAD E BY THE ASSESSING OFFICER. 6. WE ARE OF THE CONSIDERED OPINION THAT THE ISSUES IN DISPUTE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THIS BENCH IN ITA NO.134/AGR/2006 & ITA NO.453/AGR/2010 & C.O. NO.18/AGR/2011 A.Y. 2001-02 7 206/AGR/2006 IN THE CASE OF AGRA CHEMICALS AND IN I TA NO.262/AGR/2006 IN THE CASE OF ADITYA AGARWAL AND THE APPEAL FILED BY THE REVENUE AGAINST ITAT ORDER HAS ALSO BEEN DISMISSED BY THE HONBLE JURISDICTION HIGH COURT AS MENTIONED BY THE LD. FIRST APPELLATE AUTHORITY IN THE AFORESAID PARAGRAPHS. THEREFORE, RESPECTFULLY FOLLOWING THE ORDER DATED 04.08.2010 O F HONBLE JURISDICTIONAL HIGH COURT IN CASE NO.524 OF 2007 IN THE CASE OF CIT VS. ADITYA AGARWAL, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 7. IN THE CROSS OBJECTION FILED BY THE ASSESSEE, TH E LD. COUNSEL FOR THE ASSESSEE STATED THAT HE IS NOT PRESSING THE CROSS OBJECTION. HE HAS ALSO ENDORSED THE SAME ON THE GROUNDS OF THE CROSS OBJECTION. THEREFORE, THE CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. 8. IN THE RESULT, APPEAL FILED BY THE REVENUE AS WE LL AS THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 21.10.2011). SD/- SD/- (B.C. MEENA) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 14 TH NOVEMBER, 2011 PBN/* ITA NO.453/AGR/2010 & C.O. NO.18/AGR/2011 A.Y. 2001-02 8 COPY OF THE ORDER FORWARDED TO: APPELLANT/RESPONDENT/CIT CONCERNED/CIT(APPEALS) CO NCERNED/D.R., ITAT, AGRA BENCH, AGRA/GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY