DCIT, New Delhi V. M/s. Natraj Stationery Products Pvt. Ltd, New Delhi

ITA 1035/DEL/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3985 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 13-05-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 19-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRUJANI MOHANTY
• Keywords: Accommodation entries; Reassessment proceedings
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI SHAMIM YAHYA ITA NO. 1035/DEL/2009 ASSESSMENT YEAR: 2002-03 DEPUTY CIT, V S. M/S. NATRAJ ALBUM INDUSTRIES CIRCLE 13(1), PVT. LTD.(NOW NATRAJ STATIONARY NEW DELHI. PRODUCTS P. LTD.), B-109, GT KARNAL ROAD IND. AREA, NEW DELHI. (PAN AAACN0373Q) (APPELLANT) (RESPONDENT) APPELLANT BY: SMT. SRUJANI MOHA NTY, SR. DR RESPONDENT BY: SHRI ANIL S HARMA, ADV. ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LEARNED CIT(APPEALS) DATED 15.01.2009 PASSED FOR ASSESSMENT YEAR 2002-03. THE REVENUE HAS PLEADED THAT LEARNED CIT(APPEALS) HAS E RRED IN DELETING THE ADDITION OF RS.10,20,000 WHICH WAS ADDED BY THE ASS ESSING OFFICER ON THE GROUND THAT ASSESSEE HAS FAILED TO EXPLAIN SHARE AP PLICATION MONEY OF RS. 10 LACS AND IT MUST HAVE INCURRED A COMMISSION OF 2% F OR ARRANGING THIS ACCOMMODATION ENTRY OF RS.10 LACS. 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE HAS FILED ITS RETURN OF INCOME ON 30 TH SEPTEMBER 2002 DECLARING AN INCOME OF RS.10,68,170 . THIS RETURN WAS PROCESSED UNDER SEC. 143(1) ON 25.2.2003 . ASSESSING OFFICER HAD RECEIVED AN INFORMATION FROM THE INVESTIGATION WING EXHIBITING THE DETAILS OF ENTRY OPERATORS AND THE BENEFICIARIES. AS PER TH E INFORMATION, IT REVEALED THAT ASSESSEE HAD RECEIVED SUM OF RS.2,50,000 THROU GH ACCOUNT PAYEE CHEQUE BEARING NO.5078 DRAWN ON STATE BANK OF PATIALA, DAR YAGANJ, DELHI FROM ROYAL CREDITS (P) LTD. HE REOPENED THE ASSESSMENT B Y ISSUANCE OF A NOTICE UNDER SEC. 148. IN THE REASSESSMENT PROCEEDINGS, IT REVEALED TO THE ASSESSING OFFICER THAT ASSESSEE HAS RECEIVED SHARE APPLICATIO N MONEY OF RS.10 LACS FROM FOUR CONCERNS, NAMELY; S.NO. NAME AMOUNT CHEQUE NO. DATE 1. KUBERCO SALES P. LTD. 2,50,000 033922 02.12.2001 2. ROYAL CREDITS P LTD. 2,50,000 011381 04.12.2001 3. WOOD CRAFT FOOTWARE P.LTD. 2,50,000 022079 28.02.2002 3 4. SATYAM HI FAB P. LTD. 2,50,000 077619 15.03.2002 TOTAL 10,00,000 3. HE DIRECTED THE ASSESSEE TO PROVE IDENTITY OF TH E APPLICANTS, THEIR CREDITWORTHINESS AND ALSO PROVE THE GENUINENESS OF THE TRANSACTIONS. THE ASSESSEE HAS FILED CONFIRMATION, PAN, BANK STATEMEN TS ETC. ASSESSING OFFICER MADE A REFERENCE TO THE STATEMENT OF ONE SH RI MAHESH GARG RECORDED ON 10 TH SEPTEMBER 2003 WHO HAS DISCLOSED THAT HE WAS IN TH E BUSINESS OF ACCOMMODATION ENTRIES AND HE HAS FLOATED VARIOUS CO MPANIES IN HIS NAME AND IN THE NAMES OF HIS FAMILY MEMBERS. ON THE BASI S OF THIS STATEMENT, ASSESSING OFFICER OBSERVED THAT SIMPLY FURNISHING O F PAN, ASSESSMENT PARTICULARS AND CONFIRMATION BY THESE ENTITIES IS N OT ENOUGH. HE MADE THE ADDITION OF RS.10 LACS AND ESTIMATED AN EXPENDITURE OF RS.20,000 FOR ARRANGING SUCH ENTRIES. 4. DISSATISFIED WITH THE ADDITION, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(APPEALS). IT CHALLENGED REOP ENING OF THE ASSESSMENT AS WELL AS ADDITIONS ON THE MERIT. IN SUPPORT OF IT S CONTENTION, IT SUBMITTED THAT ASSESSEE HAS FILED DETAILS OF ITR, PAN, COPY O F THE BALANCE SHEET AND THE 4 DETAILS FILED WITH THE REGISTRAR OF COMPANIES TO SU BSTANTIATE THAT THE AMOUNT OF SHARE APPLICATION MONEY RECEIVED FROM THE APPLIC ANTS WERE GENUINE. IN SUPPORT OF ITS CONTENTIONS, ASSESSEE RELIED UPON TH E DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF DEVINE LEASING & FIN.CO. LTD. REPORTED IN 299 ITR 268. IT ALSO RELIED UPON THE JUDGMENT OF THE HO N'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. VALUE CAPITAL SERVICES (P) LTD. REPORTED IN 307 ITR 334. LEARNED FIRST APPELLATE AUTHORITY HAS EXAMINED THE FACTS AND CIRCUMSTANCES AND DELETED THE ADDITION. 5. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. ASSESSING OFFICER HAS BEEN D ISBELIEVING THAT THE DOCUMENTARY EVIDENCE IN THE SHAPE OF CONFIRMATION, ITR DETAILS, PAN AND BALANCE SHEET ETC. ON THE GROUND THAT SHRI MAHESH G ARG HAS DISCLOSED IN HIS STATEMENT THAT COMPANIES MANNED BY HIM ARE IN THE B USINESS OF PROVIDING ACCOMMODATION ENTRIES. IN OTHER WORDS, ASSESSING OF FICER HAS GIVEN MORE WEIGHTAGE TO THE STATEMENT OF SHRI MAHESH GARG THEN THE DOCUMENTARY EVIDENCE. HE BELIED THE DOCUMENTARY EVIDENCE ON THE BASIS OF THIS STATEMENT. THIS STATEMENT WAS NOT RECORDED IN THE ASSESSMENT P ROCEEDINGS OF THE ASSESSEE. HE IS NOT ASSOCIATED WITH THE ASSESSEE. H IS STATEMENT WAS RECORDED BY THE ADDL. DIRECTOR OF IT (INV.) HE WAS NOT SUBJE CTED TO CROSS-EXAMINATION 5 BY THE ASSESSEE, THEREFORE, HIS STATEMENT RECORDED SOMEWHERE IN 2003 WILL NOT BE SUFFICIENT TO DISCARD ALL THE DOCUMENTARY EV IDENCE WHICH OTHERWISE FULFILL THE CONDITIONS REQUIRED BY SEC. 68 OF THE I NCOME-TAX ACT, 1961. LEARNED FIRST APPELLATE AUTHORITY HAS EXAMINED ALL THESE FACTS AND DELETED THE ADDITION. WE DO NOT SEE ANY REASON TO INTERFERE IN THE ORDER OF THE LEARNED CIT(APPEALS). 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 20.05.20 11 SD/- SD/- ( SHAMIM YAHYA ) ( RAJPA L YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20/05/2011 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR