Jitendra Agarwal , Siliguri V. ITO, Ward - 1(4), Siliguri , Siliguri

ITA 1040/KOL/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4400 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 17-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C J SINGH
• Keywords: Unexplained cash credit
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA BEFORE SHRI S.S, GODARA, JUDICIAL MEMBER ITA NO.1040-1041/KOL/2018 ASSESSMENT YEAR:2014-15 JITENDRA AGARWAL C/O NORTH BENGAL AGENCY, 55, MANGTURAM ROAD, M.R. ROAD, SILIGURI- 734005 [ PAN NO.ACCPA3050A ] JITENDRA AGARWALA & OTHERS C/O NORTH BENGAL AGENCY, 55, MANGTURAM ROAD, M.R. ROAD, SILIGURI- 734005 [ PAN NO.AAAHJ 9992 C ] / V/S . / V/S . INCOME TAX OFFICER WARD-1(4), AAYAKAR BHAWAN, MATIGARA, SILIGURI /APPELLANT .. /RESPONDENT /BY ASSESSEE SHRI SUBASH AGARWAL, ADVOCATE /BY REVENUE SHRI C.J. SINGH, ADDL. CIT-DR ITA NO. 1347/KOL/2018 ASSESSMENT YEAR: 2014-15 SAURABH AGARWAL 1E, BURMAN STREET, 4THFLOOR KOLKATA-007 [ PAN NO.ACVPA 5593 P ] / V/S . INCOME TAX OFFICER WARD-36(3), AAYAKAR BHAWAN, PORVA, 110, SHANTI PALLY, KOLKATA- 107 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI S.S. GUPTA, FCA /BY RESPONDENT SHRI P. MAJUMDER, ADDL. CIT-SR-DR ITA NO.1040, 1041,1347, 1525, 1527/KOL/2018 A.Y 2 014-15 PAG E 2 ITA NO. 1525 & 1527/KOL/2018 ASSESSMENT YEAR: 2014-15 M/S UTKARSH AGRAWAL FAMILY TRUST C/O VINOD KUMAR AGARWAL, 41, B.B. GANGULY STREET, 3 RD FLOOR, SUITE-C-11, CENTRAL PLAZA, BOWBAZAR KOLKATA-12 [ PAN NO.AAATU 0893R ] SMT. RASHMI CHANDAK 230 A, AJC BOSE ROAD, CHITRAKOOT BUILDING FLAT NO. 4A, KOLKATA-20 [ PAN NO.AEEPC 6621 F ] / V/S . / V/S . INCOME TAX OFFICER WARD-36(4), AAYAKAR BHAWAN, POORVA, 110, SHANTIPALLY, KOLKATA-107 INCOME TAX OFFICER WARD-36(1), AAYAKAR BHAWAN, POORVA, 110, SHANTIPALLY, KOLKATA-107 /APPELLANT .. /RESPONDENT /BY APPELLANT 1) NONE 2) SHRI PRABHAT KR. SINGH, FCA /BY RESPONDENT SHRI P. MAJUMDER, ADDL. CIT-SR-DR /DATE OF HEARING 25-10-2018 /DATE OF PRONOUNCEMENT 31-10-2018 /O R D E R THESE FIVE ASSESSEES HAVE FILED THEIR RESPECTIVE A PPEALS FOR ASSESSMENT YEAR 2014-14AGAINST THE COMMISSIONER OF INCOME-TAX (APPE ALS)S SEPARATE ORDERS IN AS MANY CASES AFFIRMING THE ASSESSING OFFICERS IDENTI CAL ACTION TREATING THEIR LONG TERM CAPITAL GAINS ARISING FROM SALE OF EQUITY SHARES IN VARIOUS ENTITIES TO BE BOGUS THEREBY TREATING THE SAID INCOME AS UNEXPLAINED CASH CREDIT S U/S. 68 INVOLVING PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE A CT. HEARD LEARNED REPRESENTATIVES PUTTING IN APPEARANCE ON BEHALF OF ALL THESE ASSESSEES. CASE FILE(S) PERUSED. ITA NO.1040, 1041,1347, 1525, 1527/KOL/2018 A.Y 2 014-15 PAG E 3 2. I FIND THAT THE PARTIES THAT THE IDENTICAL SOLE SUBSTANTIVE GRIEVANCE RAISED IN THESE FIVE APPEALS IS THAT OF CORRECTNESS OF BOTH T HE LOWER AUTHORITIES ACTION TREATING THE CORRESPONDING LTCG OF 14,89,502/-, 14,84,340/-, 15,68,590/-, 5,96,250/- & 10,32,055/- (APPEAL-WISE IN SERIATIM); RESPECTIVELY . LEARNED DEPARTMENTAL REPRESENTATIVES CASE AS PER BOTH THE LOWER AUTHORI TIES STAND IS THAT ALL THESE ASSESSEES HAVE ACTED IN COLL8SION WITH THE RESPECTIVE BROKERS IN ARTIFICIALLY JACKING UP STOCK PRICES IN ISSUE. HIS CASE THEREFORE IS THAT ALL THE ENTITIES WHOSE SHARES HAVE BEEN PURCHASED BY THESE ASSESSEES HAVE SEEN ASTRONOMICAL RISE IN THE RELEVANT HOLDING PERIOD WITHIN A SHORT SPAN OF TIME. IT IS FURTHER S UBMITTED THAT THE DIT (INV) & VARIOUS SEARCHES HAVE UNEARTHED MANY SUCH ENTRY OPERATORS F ACILITATING SUCH LTCG IN QUESTION. CASE LAW SUMATI DAYAL VS. CIT 214 ITR 801 (SC) AND CIT VS. DURGA PRASAD MORE (1971) 82 ITR (SC) IS QUOTED IN SUPPORT THAT T HE IMPUGNED LTCG HAVE BEEN RIGHTLY TREATED AS UNEXPLAINED CASH CREDITS IN BOTH THE LOWER PROCEEDINGS. 3. I HAVE GIVEN THOUGHTFUL CONSIDERATION TO RIVAL C ONTENTIONS. I FIND THAT THIS TRIBUNALS CO-ORDINATE BENCHS DECISION IN NEERAJ GUPTA VS. ITO ITA NO.863/KOL/2018 DECIDED ON 05.10.2018 HAS ACCEPTED THE VERY POINT O F ADJUDICATION IN ASSESSEES FAVOUR AS FOLLOWS:- 2. THE SOLE ISSUE THAT ARISES FOR MY ADJUDICATION IS WHETHER THE ASSESSING OFFICER WAS RIGHT IN REJECTING THE CLAIM OF THE ASS ESSEE THAT HE HAD EARNED LONG TERM CAPITAL GAINS ON PURCHASE AN SALE OF THE SHARE S OF M/S UNNO INDUSTRIES LIMITED AND M/S NCL RESEARCH & FINANCIAL SERVICES L TD. THE AO BASED ON A GENERAL REPORT AND MODUS OPEANDI ADOPTED GENERALLY IN THESE CASES AND ON GENERAL OBSERVATIONS HAS CONCLUDED THAT THE ASSESSE E HAS CLAIMED BOGUS LONG TERM CAPITAL GAIN. HE MADE AN ADDITION OF THE ENTIR E ALE PROCEEDS OF THE SHARES AS INCOME AND REJECTED THE CLAIM OF EXEMPTION MADE U/S. 10(38) OF THE ACT. THE EVIDENCE PRODUCED BY THE ASSESSEE IN SUPPORT OF THE GENUINENESS OF THE TRANSACTION WAS REJECTED. 3. THE ASSESSEE CARRIED THE MATTE IN APPEAL AND THE LD. CIT(A), HAD UPHELD THE ADDITION. THE LD. CIT(A) HAS IN HIS ORDER RELIED UP ON CIRCUMSTANTIAL EVIDENCE AND HUMAN PROBABILITIES TO UPHOLD THE FINDINGS OF THE AO. HE ALSO RELIED ON THE SO CALLED RULES OF SUSPICIOUS TRANSACTIONS . NO DIRECT MATERIAL WAS FOUND TO CONTROVERT THE EVIDENCE FLED BY THE ASSESSEE, IN SUPPORT OF THE GENUINENESS OF THE TRANSACTIONS. IN OTHER WO RDS, THE OVERWHELMING EVIDENCE FILED BY THE ASSESSEE REMAINS UNCHALLENGED AND UNCONTOVERTED. THE ENTIRE CONCLUSIONS DRAWN BY THE REVENUE AUTHORITIES , ARE BASED ON A COMMON REPORT OF THE DIRECTOR OF INVESTIGATION, KOLKATA, W HICH WAS GENERAL IN NATURE AND NOT SPECIFIC TO ANY ASSESSEE. THE ASSESSEE WAS NOT CONFRONTED WITH ANY STATEMENT OR MATERIAL ALLEGED TO BE THE BASIS OF T HE REPORT OF THE INVESTIGATION ITA NO.1040, 1041,1347, 1525, 1527/KOL/2018 A.Y 2 014-15 PAG E 4 WING OF THE DEPARTMENT AND WHICH WERE THE BASIS ON WHICH CONCLUSION WERE DRAWN AGAINST THE ASSESSEE. COPY OF THE REPORT WAS ALSO NOT GIVEN. 4. UNDER THE CIRCUMSTANCES, IN A NUMBER OF CASES TH IS BENCH OF THE TRIBUNAL HAS CONSISTENTLY HELD THAT DECISION IN ALL SUCH CAS ES SHOULD BE BASED ON EVIDENCE AND NOT ON GENERALISTAION, HUMAN PROBABILI TIES, SUSPICION, CONJECTURES AND SURMISES. WE HAVE IN ALL CASES DELE TED SUCH ADDITIONS. SOME OF THE CASES WERE DETAILED FINDING WHICH ARE LISTED BE LOW:- SL.NO. ITA NOS. NAME OF THE ASSESSEE DATE OF ORDER/JUDGMENT 1 1236- 1237/K/17 ITAT-KOLKATA MANISH KUMAR BAID & OTHERS VS ACIT 18.08.2017 2 443/KOL/2017 KIRAN KOTHARI (HUF) VS ITO 15.11.201 7 3 22 OF 2009 CALCUTTA HIGH COURT CIT KOLKATA-III VS BHAGWATI PRASAD AGARWAL 29.04.2009 4 456 IF 2007 BOMBAY HIGH COURT CIT VS. SHRI MUKHESH RATILAL MAROLIA 07.09.2011 5 18 OF 2017 PUNJAB AND HARYANA HIGH COURT PR. CIT (CENTRAL) LUDHIANA VS SH. HITESH GANDHI 16.02.2017 6 95 OF 2017 PUNJAB AND HARYANA HIGH COURT PR. C.I.T. VS PREM PAL GANDHI 18.01.2018 7 2281/KOL/2017 ITAT KOLKATA NAVNEET AGARWAL, LEGAL HEIR OF LATE KIRANI AGARWAL VS ITO, WARD-35(3), CALCUTTA 20.07.2018 5. I AM BOUND BY THE PROPOSITION OF LAW LAID DOWN T HE CASE LAW. THEY ARE SQUARELY APPLICABLE TO THE FACT OF THE CASE. THE LD . DEPARTMENTAL REPRESENTATIVE, THOUGH NOT LEAVING HIS GROUND, COUL D NOT CONTROVERT THE CLAIM OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ISSUE IN QUESTION IS COVERED BY THE ABOVE CITED DECISIONS OF THE HON'BLE HIGH COURTS AN D THE ITAT. 6. THE LD. DEPARTMENTAL REPRESENTATIVE FILED DETAIL ED WRITTEN SUBMISSIONS AND RELIED ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF SECURITIES AND EXCHANGE BOARD OF INDIA VS RAKHI TRADING PRIVAT E LTD IN CIVIL APPEAL NO.1969 OF 2011 WITH CIVIL APPEAL NOS. 3174-3177 OF 2001 AND CIVIL APPEAL NO.3180 OF 2011. THE LD. COUNSEL FOR THE ASSESSEE S UBMITS THAT THERE IS NO SURVIVING ORDER OF SEBI AGAINST THE ASSESSEE OR THE COMPANY, THE SCRIPT OF WHICH WAS PURCHASED AND SOLD BY THE ASSESSEE. WHEN THERE IS NO SURVIVING ADVERSE ORDER OF SEBI, AGAINST THE CLAIM OF THE ASS ESSEE, THE JUDGMENT OF THE HON'BLE SUPREME COURT CANNOT BE APPLIED TO THE FACT OF THIS CASE. ITA NO.1040, 1041,1347, 1525, 1527/KOL/2018 A.Y 2 014-15 PAG E 5 4. NO EXCEPTION OR DISTINCTION HAS BEEN POINTED OUT AT THE REVENUES BEHEST IN THE FACTS AND CIRCUMSTANCES INVOLVED IN ALL THESE APPEA LS. I THEREFORE ADOPT THE ABOVE REASONING MUTATIS MUTANDIS AND DELETE IDENTICAL ADDITION OF LTCG TREATED AS UNEXPLAINED CASH CREDITS IN ALL THESE CASES. 5. THESE FIVE APPEALS OF SEPARATE ASSESSEE ARE ALLO WED. ORDER PRONOUNCED IN OPEN COURT ON 31/10/2018 SD/- (S.S. GODARA) JUDICIAL MEMBER KOLKATA, *DKP/SR.PS ' - 31/10/2018 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-JITENDRA AGARWAL/JIDENDRA AGARWALA & OTH ERS C/O NORTH BENGAL AGEN CY, 55, MANGTURAM ROAD, M.R. RD. SILIGURI-734005 SAURABH AGA RWAL, 1E, BURMAN ST. 4 TH FL, KOLKTA-007 M/S UTKARSH AGRAWAL FAMILY TRUT C/O VINOD KR. AGARWAL, 41, B.B. GANGUL Y ST, 3 RD FL, SUITE-C-11, CENTRAL PLAZA, BOWBAAR KOL-12 SMT. RASHMI CHANDAK 230 AJC BOSE ROAD, CHITRAKOOT BUILDING FLAT NO., 4 A, KOLKATA-20 2. /RESPONDENT-ITO WARD-1(4), AAYAKAR BHAWAN, MATIGSAR A, SILIGURI ITO,WD-36(3), AAYAKAR BHAWAN POORVA,110 SHANTIPALLY,KOL ITO WD-36(4)/3 6(1), AAYAKAR BHAWAN, POORVA, 110, SHANTIPALLY, K OLKATA-107 3. % ' / CONCERNED CIT 4. ' - / CIT (A) 5. ( ++% , % / DR, ITAT, KOLKATA 6. - / GUARD FILE. BY ORDER/ , /TRUE COPY/ / %,