MADHULIKA OSWAL, MUMBAI V. DCIT 8(3), MUMBAI

ITA 1095/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1276 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-06-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 17-02-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S S RANA; AMOL KAMAT
• Assessee Lawyers: BEHARILAL
• Keywords: Gift; Accommodation entries; Revised return; Capital Gains
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, B, MUMBAI BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 1094 AND 1095/MUM/2009 (ASSESSMENT YEARS: 2003-04 AND 2005-06) MADHULIKA OSWAL 81/82,SOLITAIRE CENTRAL AVENUE, SANTACRUZ(W), MUMBAI-400054 .APPELLANT PAN: AABPO93241 V/S DCIT CIRCLE 8(3), MUMBAI RESPONDENT REVENUE BY : S/SHRI AMOL KAMAT AND S S RANA ASSESSEE BY : SHRI BEHARILAL O R D E R PER VIJAY PAL RAO,JM THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE TWO DIFFERENT ORDERS OF CIT(A) BOTH DATED 22.12.20 08 FOR THE ASSESSMENT YEARS 2003-04 AND 2005-06. SINCE THESE TWO APPEALS PERTAIN TO THE SAME ASSESSEE, FOR THE SAKE OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DECIDED BY THIS CONSOLIDATED ORDER. 2. THE ASSESSEE HAS RAISED FOLLOWING COMMON EFFECTI VE GROUNDS : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW THE LD. CIT(A) HAS ERRED IN UPHOLDING TREATMENT OF LONG TERM CAPITAL GAINS ON SALES OF SHARES AS INCOME FROM OTHER SOURCES. ITA NO. 1094 AND 1095/MUM/2009 (ASSESSMENT YEARS: 2003-04 AND 2005-06) 2 REASONS ASSIGNED BY HIM FOR DOING THE SAME ARE WRONG AND INSUFFICIENT; 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW THE LEARNED CIT(A) HAS FURTHER ERRED IN UPHOLDING THAT GIFTS RECEIVED ARE TAXABL E AS INCOME FROM OTHER SOURCES. REASONS ASSIGNED BY HIM FOR DOING THE SAME ARE WRONG AND INSUFFICIENT; 3. THE FACTS LEADING TO THESE APPEALS ARE THAT A S URVEY U/S 133A OF THE INCOME TAX ACT, 1961 WAS CONDUCED ON 28 .6.2006 AT THE OFFICE PREMISES OF M/S MAHASAGAR SECURITIE S PVT.LTD. DURING THE COURSE OF SURVEY ACTION IT WAS NOTICED THAT ITS DIRECTOR SHRI MUKESH M CHOKSHI WAS GIVING ACCOMMODA TION ENTRIES OF LONG TERM CAPITAL GAIN, BUSINESS LOSS ET C AS PER THE REQUIREMENTS OF HIS CLIENTS AGAINST RECEIPT OF CASH AND COMMISSION. ON FURTHER ENQUIRIES, TO TRACE OUT THE ACTUAL BENEFICIARIES WHO HAVE TAKEN THE ACCOMMODATION ENTR IES FROM MUKESH M CHOKSI, THE NAMES OF SHRI RATANCHAND OSWA L, SHRI RISHI R OSWAL AND THEIR FAMILY MEMBERS AMONG VARIOU S BENEFICIARIES WERE FOUND WHO HAVE OBTAINED SUCH ACCOMMODATION ENTRIES. ACCORDINGLY, A SURVEY ACTION WAS CONDUCTED ON 28.12.2006 AT THE BUSINESS PREMISES OF M/S HILDEN PACKAGING MACHINES PVT LTD IN WHICH OSWAL FA MILY MEMBERS ARE THE DIRECTORS AND SHAREHOLDERS.DURING T HE COURSE OF THE SURVEY, IT WAS FOUND THAT THE MEMBERS OF OSW AL FAMILY CLAIMED LONG TERM CAPITAL GAIN ON PURCHASE AND S ALE OF SHARES OF M/S TALENT INFOWAY LTD, M/S BUNIYAD CHEM ICALS LTD, AND OTHER COMPANIES. AS PER THE AO MS MADHULIKA R ITA NO. 1094 AND 1095/MUM/2009 (ASSESSMENT YEARS: 2003-04 AND 2005-06) 3 OSWAL, THE ASSESSEE HAS ALSO PROVIDED WITH ACCOMMOD ATION ENTRIES FOR THE YEARS UNDER CONSIDERATION. DURING THE COURSE OF SURVEY, THE ASSESSEE HAD ACCEPTED THE SAID LONG TERM CAPITAL GAIN AS ACCOMMODATION ENTRIES GIVEN BY SHRI MUKESH M CHOKSI AND THE SAME WERE OFFERED FOR TAXATION AS AD DITIONAL INCOME. THE TOTAL DISCLOSURE WAS RS.32,63,019/- AN D RS.46,48,842/- FOR THE ASSESSMENT YEAR 2003-04 AND 2005-06 RESPECTIVELY. THE AO FURTHER FOUND THAT THE ASSESS EE HAS ALSO RECEIVED GIFT FROM VARIOUS PERSONS RS.12,00,000/- A ND RS.20,00,000/- FOR THE ASSESSMENT YEARS 2003-04 AND 2005-06 RESPECTIVELY. AT THE TIME OF SURVEY, THE ASSESSEE D ISCLOSED AN AMOUNT OF RS.4,50,000/- AND RS.7,00,000/- AS ADDIT IONAL INCOME FOR TAXATION ON ACCOUNT OF GIFT FOR THE ASS ESSMENT YEARS 2003-04 AND 2005-06 RESPECTIVELY. THE ASSES SMENT WAS REOPENED FOR THE ASSESSMENT YEAR 2003-04. ACCO RDINGLY, THE ASSESSMENTS WERE FRAMED FOR BOTH THE ASSESSMENT YEARS AS PER THE ADDITIONAL INCOME DISCLOSED BY THE ASSES SEE. THE ASSESSEE CHALLENGED THE ASSESSMENT OF THE ADDITIONA L INCOME BEING THE INCOME FROM OTHERS SOURCES BEFORE THE CIT(A). 4. THE CIT(A) DISMISSED THE APPEALS OF THE ASSESSEE AND CONFIRMED THE ACTION OF THE AO ON THE GROUND THAT T HE INCOME WAS OFFERED AND SURRENDERED BY THE ASSESSEE, THEREF ORE, THERE WAS NO MERIT IN THE SUBMISSIONS OF THE ASSESSEE. ITA NO. 1094 AND 1095/MUM/2009 (ASSESSMENT YEARS: 2003-04 AND 2005-06) 4 5. BEFORE US, THE LEARNED AR OF THE ASSESSEE HAS SU BMITTED THAT THE ASSESSEE OFFERED THE INCOME BY WAY OF GIFT RECEIVED AND THE ADDITIONAL INCOME TO AVOID LITIGATION AND H ARDSHIP. HE HAS POINTED OUT THAT ALL THE DONORS ARE ASSESSED T O INCOME TAX HAVING PAN AND ADDRESS WHICH CAN BE VERIFIED FR OM THE GIFT DEED. THE LEARNED AR SUBMITTED THAT THE ADDITI ONAL INCOME WAS OFFERED TO TAX ONLY TO AVOID LITIGATION AND BUY PEACE ON THE CONDITION THAT NO PENALTY WOULD BE LEV IED. THE LEARNED AR ALSO SUBMITTED THAT SINCE THE STATEMENT MADE DURING THE COURSE OF SURVEY HAS NO EVIDENTIARY VALU E AND THE REVENUE HAS ALSO INITIATED PENALTY PROCEEDINGS, THE REFORE, THE ASSESSEE HAS CHALLENGED THE ADDITION. HE HAS FURTHE R CONTENDED THAT MERE SURRENDERING OF INCOME DURING T HE COURSE OF SURVEY CANNOT LEAD TO THE CONCLUSION THAT THERE WAS A CONCEALMENT OF INCOME. HE HAS FORCIBLY CONTENDED T HAT INCREMENTING DOCUMENTS OR OTHER MATERIAL WHATSOEVER FOUND DURING THE SURVEY PROCEEDINGS CANNOT BE A CONCLUSIV E PROOF FOR ESTABLISHING THAT THE LONG TERM CAPITAL GAIN ON SALE OF SHARES SHOWN IN THE HANDS OF VARIOUS FAMILY MEMBER S OF OSWAL FAMILY WERE IN THE NATURE OF ACCOMMODATION E NTRIES OBTAINED FROM THE BROKERS. SIMILARLY, THERE WAS N O EVIDENCE OR MATERIAL GATHERED IN RESPECT OF VARIOUS GIFTS RE CEIVED BY THE ASSESSEE AND FAMILY MEMBERS SO AS TO ESTABLISH THAT THE SAID GIFTS WERE NOT GENUINE. THE INCOME WAS OFFERED BY THE ASSESSEE TO AVOID LITIGATION WITH THE DEPARTMENT WI TH THE ITA NO. 1094 AND 1095/MUM/2009 (ASSESSMENT YEARS: 2003-04 AND 2005-06) 5 UNDERSTANDING THAT NO PENALTY PROCEEDINGS WOULD BE INITIATED AGAINST THE PARTIES. 6. ON THE OTHER HAND, THE LEARNED DR HAS SUBMITTED THAT THE ASSESSEE OFFERED THE ADDITIONAL INCOME TOWARDS LONG TERM CAPITAL GAIN BEING ACCOMMODATION ENTRIES AS W ELL AS GIFTS RECEIVED BY THE ASSESSEE. HE HAS FURTHER PO INTED OUT THAT THE AO HAS FRAMED THE ASSESSMENT OF THESE YEA RS ONLY ON THE BASIS OF THE REVISED RETURN FILED BY THE AS SESSEE FOR BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION AND N O ADDITION HAS BEEN MADE BY THE AO. THEREFORE, THE A SSESSEE CANNOT CHALLENGE THE ASSESSMENT MADE AS PER THE RET URN OF INCOME OF THE ASSESSEE. HE HAS RELIED UPON THE ORDE RS OF THE LOWER AUTHORITIES. 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND REL EVANT RECORDS. IT IS UNDISPUTED FACT THAT DURING THE COU RSE OF SURVEY, THE ASSESSEE ADMITTED AND OFFERED THE RESPECTIVE AM OUNT TOWARDS THE LONG TERM CAPITAL GAIN AND GIFTS. TH OUGH THE STATEMENT MADE DURING THE COURSE OF SURVEY U/S 133A HAS NO EVIDENTIARY VALUE, IF THE SAME IS NOT CORROBORATED BY DOCUMENTARY EVIDENCE, HOWEVER, IN THE CASE IN HAND NO ADDITION IS MADE ON THE BASIS OF STATEMENT RECORDED DURING THE SURVEY PROCEEDINGS. ON THE CONTRARY, WE FIND THAT THE ASSESSEE HERSELF HAS OFFERED THE SAID INCOME IN THE REVISED ITA NO. 1094 AND 1095/MUM/2009 (ASSESSMENT YEARS: 2003-04 AND 2005-06) 6 RETURN OF INCOME AND THE ASSESSMENTS WERE FRAMED ON THE BASIS OF REVISED RETURN OF INCOME FILED BY THE ASSE SSEE. THEREFORE, IT IS NOT A CASE OF MERELY ADMITTING OR OFFERING THE INCOME DURING THE COURSE OF SURVEY BUT THE ASSESSE E HAS OFFERED THE INCOME IN THE REVISED RETURN OF INCOME AND NO OBJECTION WAS RAISED IN THIS RESPECT DURING THE ASS ESSMENT PROCEEDINGS. THUS, WHEN NO ADDITION WAS MADE BY TH E AO WHILE MAKING THE ASSESSMENT FOR THE YEARS UNDER CONSIDERATION THEN THE ASSESSEE CANNOT QUESTION THE ASSESSMENT MADE ON THE BASIS OF THE RETURN OF INC OME FILED BY THE ASSESSEE. ACCORDINGLY, WE DO NOT FIND ANY ER ROR OR ILLEGALITY IN THE ORDERS OF THE LOWER AUTHORITIES. THE SAME ARE UPHELD. 8. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 25.06.2010 SD SD (P.M.JAGTAP) ( VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 25 TH JUNE 2010 SRL:23610 ITA NO. 1094 AND 1095/MUM/2009 (ASSESSMENT YEARS: 2003-04 AND 2005-06) 7 COPY TO: 1. MADHULIKA OSWAL 81/82,SOLITAIRE CENTRAL AVENUE, SANTACRUZ(W), MUMBAI-400054 2.DCIT CIRCLE 8(3), MUMBAI 3.CIT-8, MUMBAI 4 ADDL.CIT, RANGE 8(3), 5.CIT(A)-XXIX, MUMBAI 6. DR B BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI