Smt. Reshu Singhal, Agra V. I.T.O.-4(3), Agra

CO 23/AGR/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7914 (ITAT-AGRA)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 30-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KM ANURADHA
• Keywords: Reopening of assessment; Opportunity of being heard; Accommodation entries
• Section: 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.368/AGR/2011 ASSESSMENT YEAR: 2003-04 INCOME TAX OFFICER 4(3), VS. SMT. RESHU SINGHAL , AGRA. 9/109, JATI KATRA, MOTI KATRA, AGRA. (PAN: NOT MENTIONED). C.O. NO.23/AGR/2012 (IN ITA NO.368/AGR/2011) ASSESSMENT YEAR: 2003-04 SMT. RESHU SINGHAL, VS. INCOME TAX OFFICER 4( 3), 9/109, JATI KATRA, AGRA. MOTIA KATRA, AGRA. (PAN: NOT MENTIONED). (APPELLANT) (RESPONDENT) REVENUE BY : KM. ANURADHA, JR. D.R. ASSESSEE BY : SHRI RAJENDRA SHARMA, ADVOCATE DATE OF HEARING : 10.10.2012 DATE OF PRONOUNCEMENT OF ORDER : 10.10.2012 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION B Y THE ASSESSEE HAVE BEEN FILED AGAINST THE ORDER DATED 16.06.2011 PASSE D BY THE LD. CIT(A)-II, AGRA FOR THE ASSESSMENT YEAR 2003-04. ITA NO.368/AGR/2011 & CO-23/AGR/2012 - A.Y. 2003-04. 2 2. THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL ARE AS UNDER:- 1. THAT THE LD COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.10, 25,090/- WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES UNDER WHIC H THE ADDITION WAS MADE U/S 68 OF THE IT ACT, 1961 ON ACCOUNT OF U NEXPLAINED INCOME SHOWN AS SALE CONSIDERATION OF SHARES. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 10,25,090/- IGNORING THE FACT THAT THE ASSESSEE COULD NOT PROVE THE GENU INENESS OF SHARE TRANSACTION THROUGH ANY DOCUMENTARY EVIDENCE. 3. THAT THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), AGRA BEING ERRONEOUS IN LAW AND ON FACTS DESERVES T O BE QUASHED AND THAT OF THE ASSESSING OFFICER DESERVES TO BE RESTOR ED. 4. 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. 3. THE GROUNDS RAISED BY THE ASSESSEE IN ITS CROSS OBJECTION ARE AS UNDER:- 1. THAT THE NOTICE ISSUED U/S 147 OF INCOME TAX AC T FOR RE-OPENING OF THE CLOSED ASSESSMENT IS ILLEGAL, RESULTANT TO A SSESSMENT COMPLETED U/S 148/143 IS LIABLE TO BE ANNULLED BEING IN THE O RIGINAL RETURN FILED, THE ASSESSEE HAS DISCLOSED FULLY AND TRULY ALL THE MATERIAL FACTS, NECESSARY FOR HER ASSESSMENT, IN THE REASON RECORDE D U/S 147, NO ANY SPECIFIC MATERIAL RELATED TO THE INCOME ESCAPED ASS ESSMENT WAS AVAILABLE WITH THE AO FOR RE-OPENING OF THE CLOSED ASSESSMENT, ASSESSMENT RE-OPENED U./S 147 IS HIGHLY UNJUSTIFIED AND ILLEGAL. NOTICE ISSUED U/S 148 OF INCOME TAX ACT IS LIABLE TO BE AN NULLED. 2. WHILE RE-OPENING OF THE ASSESSMENT U/S 147, THE AUTHORITIES BELOW HAVE COMPLETELY IGNORED THE FACTS, THAT THE R EASONS RECORDED FOR RE-OPENING OF THE ASSESSMENT WERE IN RESPECT OF RS. 70,000/- RECEIVED FROM AYUSHI BROKER (PART OF THE SHORT TEM CAPITAL G AIN DULY SHOWN IN THE RETURN OF INCOME FILED) WHILE IN THE RE-ASSESSM ENT THE ADDITION WAS ITA NO.368/AGR/2011 & CO-23/AGR/2012 - A.Y. 2003-04. 3 MADE AT RS.1025090/- IN RESPECT OF OTHER TRANSACTIO NS IN RESPECT OF THE AMOUNT RECEIVED FROM DEEPAK SECURITY, THUS THE REAS ONS RECORDED FOR RE-OPENING OF THE ASSESSMENT WERE NOT RELIABLE, SPE CIFIC, RELATED WITH THE INCOME ALLEGED TO BE ESCAPED, NOTICE ISSUED U/S 148 ON THE ABOVE REASONS IS NOT AS PER LAW, LIABLE TO BE CANCELLED. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE CASE OF THE ASSESSEE WAS REOPENED UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) BY ISSUING NOTICE UNDER SECTION 148 DATED 29.03.2008. THE REA SONS FOR REOPENING RECORDED BY THE A.O. ARE REPRODUCED FROM ASSESSEES PAPER BOOK PAGE NOS.3 & 4 AS UNDER :- INFORMATION RECEIVED FROM THE INVESTIGATION WING, AGRA THAT THE FOLLOWING TRANSACTION MADE DURING THE FINANCIAL YEAR 2002-2003 BY AAYUSHI STOCK BROKERS (P) LTD., SANJAY PLACE, AG RA WHICH HAVE BEEN FOUND TO HAVE RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE, AND IS PRIMA FACIE UNEXPLAINED. SL. NAME OF THE PARTY DD DATE/ DD NO. A/C NO. AND A MOUNT NO. CLEARING DATE BANK NAME 1. RESHU SINGHAL 07.12.2002 61238 42/8535 70000/- JATI KATRA, SBI, SEO KA MOTI KATRA, BAZAR, AGRA AGRA. IN VIEW OF THE ABOVE FACTS, I HAVE REASONS TO BELIE VE THAT INCOME CHARGEABLE TO TAX AMOUNTING TO RS.70,000/- HAS ESCA PED ASSESSMENT FOR ASSESSMENT YEAR 2003-2004. 5. THE ASSESSEE OBJECTED REOPENING OF ASSESSMENT UN DER SECTION 147 OF THE ACT WHICH WAS REJECTED BY THE A.O. VIDE SEPARATE SPEAKI NG ORDER DATED 14.10.2008. THE A.O. MADE ADDITION OF RS.10,25,090/- ON THE GRO UND THAT THE ASSESSEE COULD NOT EXPLAIN AND PROVE THE SALE OF SHARES AND GENUIN ENESS OF RECEIPT OF MONEY FROM SALE OF SHARES. THE DEPARTMENT HAS PROVED THAT NO SALE OF SHARES WAS TAKEN PLACE. ITA NO.368/AGR/2011 & CO-23/AGR/2012 - A.Y. 2003-04. 4 THE A.O. MADE THE ENTIRE AMOUNT OF RS.10,25,090/- A LLEGEDLY RECEIVED FROM SALE OF SHARES TREATING IT AS UNDISCLOSED AND UNEXPLAINED I NCOME FROM OTHER SOURCES AND ADDED THE SAID AMOUNT UNDER SECTION 68 OF THE ACT. THE AMOUNT OF ADDITION RS.10,25,090/- CALCULATED BY THE A.O. IS AS UNDER : - (PAGE NO.4) THE CIRCUMSTANCES CLEARLY INDICATE THAT ASSESSEE H AS NO EVIDENCE IN HER POSSESSION TO PROVE THE TRANSACTION OF PURCHASE AND SALE OF SHARES. THUS, IT IS APPARENT THAT THE SALE CONSIDERATION OF RS.10,25,090/- SHOWN BY THE ASSESSEE AS RECEIVED FR OM M/S DEEPAK SECURITIES, 4280/3C, ANSARI ROAD, DARYA GANJ, NEW D ELHI 110 002 AND DEPOSITED IN THE BANK ACCOUNT NO.01190/008535, STATE BANK OF INDIA, SEO KA BAZAR, AGRA ON 05.09.2002 RS.3,00,000 /-, RS.3,00,000/- , RS.3,00,000/- AND RS.1,25,090/- TOTALING RS.10,25 ,090/- ARE NOTHING BUT INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES ROUTED THROUGH M/S DEEPAK SECURITIES, 4280/3C, ANSARI ROAD, DARYA GANJ, NEW DELHI. 6. THE CIT(A) DISMISSED THE LEGAL GROUND CHALLENGIN G THE ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT FOLLOWING THE DECISION IN TH E CASE OF SHRI BRIJ MOHAN AGARWAL. HOWEVER, THE CIT(A), ON MERIT, ALLOWED TH E GROUNDS OF THE ASSESSEE AS UNDER :- (PAGE 19) AS THE FACTS OF THE APPELLANTS CASE ARE SIMILAR T O ABOVE CASE (SUPRA), THEREFORE, RESPECTFULLY FOLLOWING THE ORDE R OF HONBLE ITAT, AGRA, THE ADDITION MADE BY THE AO IS HEREBY DELETED . IT WILL NOT BE OUT OF PLACE TO MENTION HERE THAT THE HONBLE ITAT, AGRA BENCH IN A HOST OF OTHER CASES HAVING SIMILAR FACTS HAS DELETE D THE SIMILAR ADDITIONS MADE BY THE AOS. ALSO, ON SIMILAR FACTS HONBLE ALLAHABAD HIGH COURT IN THE CASES OF CIT VS. NAITIN GUPTA IN ITA NO.84 OF 2010 ORDER DATED 3.12.2010 AND CIT VS. SHU BHAM GUPTA IN ITA NO.260 OF 2009 ORDER DATED 18.11.2010 DISMISSED THE APPEALS FILED BY THE DEPARTMENT. FOLLOWING THESE DECISIONS THE GROUNDS ARE ALLOWED. ITA NO.368/AGR/2011 & CO-23/AGR/2012 - A.Y. 2003-04. 5 7. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED TH AT ON IDENTICAL SET OF FACTS THE I.T.A.T., AGRA BENCH HAS SENT BACK THE MATTER T O THE FILE OF CIT(A) IN THE CASE OF SHRI RAM PRAKASH GARG IN ITA NO.258/AGR/2011 & C .O. NO.53/AGR/2011 VIDE ORDER DATED 20.07.2012. THE RELEVANT FINDING OF TH AT CASE IS REPRODUCED AS UNDER :- (PARAGRAPH NO.5) 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND TH E FINDINGS OF THE AUTHORITIES BELOW. ACCORDING TO SECTION 250(6) OF THE ACT, THE LD. CIT(A) SHALL HAVE TO NOTE THE POINTS OF DETERMINATI ON IN THE APPELLATE ORDER AND THE REASONS FOR DECISION. THE LD. CIT(A) MERELY NOTED BRIEF FACTS AND INCORPORATED THE WRITTEN SUBMISSION OF TH E ASSESSEE IN THE APPELLATE ORDER AND WITHOUT POINTING OUT AS TO HOW THE FACTS OF THE CASE OF THE ASSESSEE ARE SIMILAR TO THE CASE OF RAJ ESH KUMAR GARG, DELETED THE ADDITION. THE DEPARTMENT CONTENDED THAT THE FACTS IN THE CASE OF RAJESH KUMAR GARG ARE ALTOGETHER DIFFERENT. THUS, NO FINDING OF FACT HAS BEEN GIVEN IN THIS CASE AND EVEN NOTHIN G IS POINTED OUT AS TO HOW THE FACTS OF BOTH THE CASES ARE SIMILAR. FUR THER, NO FINDING AND REASON FOR ORDER HAVE BEEN GIVEN FOR DISMISSING THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S. 54EC OF THE IT ACT. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT ALL THE MATERIAL WAS BEFORE THE LD. CIT(A) AND THE AO ON THIS ISSUE WHICH HAS BEEN IGNORED BY THE LD. CIT(A). THUS, NO FINDING OF FACT HAS BEEN GIVEN EVEN ON THE ISSUE RAISED IN THE CROSS OBJECTION BY THE ASSESSEE. THE LD. CIT(A) MERELY GO ING THROUGH THE WRITTEN SUBMISSIONS, DISMISSED THIS GROUND OF APPEA L OF THE ASSESSEE. THUS, THE ORDER OF THE LD. CIT(A) SUFFERS FROM LEGA L INFIRMITY AND CANNOT BE SUSTAINED IN LAW. THE LD. CIT(A) SHALL HA VE TO RECORD REASONS FOR DECISION WHILE ALLOWING OR DISMISSING T HE APPEAL. THE LD. CIT(A), HOWEVER, DID NOT RECORD ANY REASONS FOR DEC ISION EITHER FOR ALLOWING OF THE APPEAL OF ASSESSEE PARTLY OR DISMIS SING THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. WE, THEREFORE, SET ASIDE THE ORDER OF THE LD. CIT(A) ON BOTH THE ISSUES AND RESTORE BOTH THE ISSUES TO HIS FILE WITH THE DIRECTION TO RE-DECIDE THE SAME AFRESH BY GIVING REASONABLE AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE AS SESSEE. THE LD. CIT(A) SHALL PASS THE ORDER ON MERITS BY GIVING REA SONS FOR DECISION IN THE APPELLATE ORDER. ITA NO.368/AGR/2011 & CO-23/AGR/2012 - A.Y. 2003-04. 6 8. THE LD. AUTHORISED REPRESENTATIVE WHILE ARGUING CROSS OBJECTION SUBMITTED THAT THE LEGAL ISSUE RAISED IN THE CROSS OBJECTION IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF I.T.A.T., AGRA BENCH I N THE CASE OF SMT. URMILA SINGHAL IN ITA NO.286/AGR/2011, ORDER DATED 20.07.2 012. THE RELEVANT FINDING OF I.T.A.T. POINTED OUT BY THE LEARNED AUTHORISED REPR ESENTATIVE IS REPRODUCED AS BELOW :- (P.B. PAGE NOS.31, 32 & 33) 8. IN THE LIGHT OF ABOVE DISCUSSIONS, IF WE CONSID ER THE FACTS OF THE CASE UNDER CONSIDERATION THAT THE REASONS FOR RE-OP ENING THE COMPLETED ASSESSMENT THAT THE A.O. HAS REASON TO BE LIEVE THAT THE ASSESSEE HAS OBTAINED ACCOMMODATION ENTRIES RECEIVE D FOR RS.70,000/- ON ACCOUNT OF SHARES FROM AYUSHI STOCK BROKERS PVT. LTD. BUT WHILE MAKING ADDITION THE A.O. MADE ADDITION OF RS.10,29,566/- ON DIFFERENT TRANSACTION THAT THE ASSESSEE PURCHASE D 9000 SHARES OF G.L. COMMERCIAL LIMITED AND WERE SOLD THROUGH BROKE R DEEPAK SECURITIES. THE ASSESSEE HAS DECLARED SHORT TERM C APITAL GAIN IN RESPECT OF TRANSACTION PERTAINING TO RS.70,000/- FO R WHICH THE A.O. RECORDED REASONS FOR REOPENING. THE A.O. DID NOT R ECORD REASON FOR REOPENING OF ASSESSMENT IN RESPECT OF 9000 SHARES F OR WHICH ADDITION WAS MADE. THE LD. AUTHORISED REPRESENTATIVE DEMONS TRATED THIS FACT BY REFERRING PAGE NOS.4 TO 8 OF ASSESSEES PAPER BO OK WHERE COPY OF ACCOUNT OF ASSESSEE IN BOOKS OF ACCOUNT OF M/S. AYU SHI STOCK BROKERS (P) LTD. (PAGE NO.4 OF PAPER BOOK) AND IN THE BOOKS OF ACCOUNT OF DEEPAK SECURITIES (PAGE NO.8 OF PB). PAGE NO.2 OF PAPER BOOK WHERE A COPY OF COMPUTATION OF TOTAL INCOME FOR A.Y. 2003 -04 HAS BEEN PLACED. THUS, ADMITTEDLY THE REASONS RECORDED AND ADDITIONS MADE ARE DIFFERENT TRANSACTIONS. IT IS ALSO ADMITTED FA CT THAT THE A.O. DID NOT MAKE ANY ADDITION IN RESPECT OF TRANSACTION FOR WHI CH REASONS WERE RECORDED. WE ARE AWARE THAT THE A.O. HAD JURISDICT ION TO REASSESS INCOME OTHER THAN INCOME IN RESPECT OF WHICH PROCEE DINGS UNDER SECTION 147 WERE INITIATED BUT HE HAS NO JURISDICTI ON IN DOING SO WHEN THE VERY REASON FOR INITIATION FOR THOSE PROCEEDING S CEASE TO SURVIVE. THE LEGISLATURE CAN NOT BE PRESUMED TO HAVE INTENDE D TO GIVE BLANKET POWERS TO THE A.O. THAT ON ASSUMING JURISDICTION UN DER SECTION 147 REGARDING ASSESSMENT OR REASSESSMENT OF ESCAPED INC OME, HE WOULD ITA NO.368/AGR/2011 & CO-23/AGR/2012 - A.Y. 2003-04. 7 GO ON MAKING SCRUTINY ENQUIRY AND THEREBY INCLUDING DIFFERENT ITEMS OF INCOME NOT CONNECTED OR RELATED WITH THE REASONS TO BELIEVE ON THE BASIS OF WHICH HE ASSUMED JURISDICTION. WE, THEREF ORE, FIND THAT THE JURISDICTION ACQUIRED BY THE A.O. UNDER SECTION 147 IS NOT IN ACCORDANCE WITH LAW. THEREFORE, THE ORDER OF THE A .O. IS LIABLE TO BE QUASHED. WE DO ACCORDINGLY. SINCE THE ORDER OF TH E A.O. HAS BEEN QUASHED ON LEGAL ISSUE, THEREFORE, WE DO NOT WANT T O GO INTO THE MERIT OF THE CASE AND ACCORDINGLY WE DO NOT EXPRESS ANY O PINION ON THE MERIT OF THE CASE. 9. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. WE FIND THAT ON MERIT, ON IDENTICAL SET OF FACTS, W E HAVE SENT BACK THE ISSUE TO THE FILE OF CIT(A) IN THE CASE OF SHRI RAM PRAKASH GARG IN ITA NO.258/AGR/2011 & C.O. NO.53/AGR/2011 VIDE ORDER DATED 20.07.2012. S INCE THE FACTS OF THE CASE UNDER CONSIDERATION AND THE FACTS OF THE CASE DECID ED BY US IN THE CASE OF SHRI RAM PRAKASH GARG (SUPRA) ARE IDENTICAL OF WHICH RELEVAN T FINDING IS REPRODUCED AS ABOVE, WE THEREFORE, FOLLOW THE ABOVE ORDER OF I.T. A.T., AGRA BENCH AND IN THE LIGHT OF THAT, THIS APPEAL OF THE REVENUE IS ALSO B EING SENT BACK TO THE FILE OF CIT(A) WITH IDENTICAL DIRECTION. 10. SINCE, ON MERIT, WE ARE SENDING BACK THE MATTER TO THE FILE OF CIT(A), THE LEGAL ISSUE RAISED BY THE ASSESSEE IN HER CROSS OBJ ECTION IS ALSO REQUIRED TO BE SENT BACK TO THE FILE OF CIT(A) AS THE ORDER OF CIT(A) I S DATED 16.06.2011 WHEREAS, THE AFORESAID ORDER OF I.T.A.T., AGRA BENCH IS DATED 20 .07.2012. THE REVENUE DID NOT GET OCCASION TO CONSIDER THE SAID ORDER OF THE I.T. A.T., AGRA BENCH. IN THE LIGHT OF ITA NO.368/AGR/2011 & CO-23/AGR/2012 - A.Y. 2003-04. 8 THE FACTS OF THE CASE UNDER CONSIDERATION, WE ARE S ENDING BACK THE LEGAL ISSUE ALSO TO THE FILE OF CIT(A) WITH THE DIRECTION TO DECIDE THE SAME CONSIDERING THE ABOVE ORDER OF I.T.A.T., AGRA BENCH IN THE CASE OF SHRI R AM PRAKASH GARG IN ITA NO.258/AGR/2011 & C.O. NO.53/AGR/2011 AFTER PROVIDI NG REASONABLE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. 11. IN THE RESULT, APPEAL OF THE REVENUE AND CROSS OBJECTION OF THE ASSESSEE BOTH ARE ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY