ITO, New Delhi V. Sh. Harpinder Singh Ratra, New Delhi

ITA 112/DEL/2014

• Counselvise Citation: 11220114 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 02-06-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 06-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Keywords: Unexplained cash credit; Accommodation entries
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH SMC SMC SMC SMC : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA, VICE , VICE , VICE , VICE PRESIDENT PRESIDENT PRESIDENT PRESIDENT ITA NO ITA NO ITA NO ITA NO . .. . 112/DEL/2014 112/DEL/2014 112/DEL/2014 112/DEL/2014 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2004 2004 2004 2004 - -- - 05 0505 05 INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -25(4), 25(4), 25(4), 25(4), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. SHRI HARPINDER SINGH RATRA, SHRI HARPINDER SINGH RATRA, SHRI HARPINDER SINGH RATRA, SHRI HARPINDER SINGH RATRA, B BB B- -- -5/96, PASCHIM VIHAR 5/96, PASCHIM VIHAR 5/96, PASCHIM VIHAR 5/96, PASCHIM VIHAR, ,, , NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN : PAN : PAN : PAN : AAFPR0207F. AAFPR0207F. AAFPR0207F. AAFPR0207F. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.K. JAISWAL, SR.DR. RESPONDENT BY : NONE. DATE OF HEARING : 02.06.2015 02.06.2015 02.06.2015 02.06.2015 DATE OF PRONOUNCEMENT : ORDER ORDER ORDER ORDER THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 200 4-05 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XXIV, N EW DELHI DATED 4 TH OCTOBER, 2013. 2. AT THE TIME OF HEARING BEFORE ME, NONE APPEARED ON BEHALF OF THE ASSESSEE-RESPONDENT. ACCORDINGLY, THE APPEAL OF THE REV ENUE IS BEING DECIDED EX PARTE QUA THE ASSESSEE-RESPONDENT ON MERITS AFTER HEARING THE ARGUMENTS OF LEARNED DR. 3. THE GROUNDS OF APPEAL OF THE REVENUE ARE AS UNDER: - ON THE FACTS OF CIRCUMSTANCES OF THE CASE AND IN LAW T HE CIT(A) HAS ERRED IN :- 1. DELETING THE ADDITION OF RS.12,00,000/- MADE BY A O ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE I .T. ACT. ITA-112/DEL/2014 2 2. DELETING THE ADDITION OF RS.24,000/- MADE BY AO O N ACCOUNT OF COMMISSION PAID ON ACCOMMODATION ENTRY. 4. LEARNED DR SUBMITTED THAT THERE IS A VIOLATION OF THE PROVISION OF RULE 46A IN THIS CASE AS LEARNED CIT(A) HAS ADMITTED C ERTAIN EVIDENCES/DETAILS DURING THE COURSE OF APPELLATE PROCE EDINGS BEFORE HIM. HE SUBMITTED THAT A SEARCH WAS CONDUCTED ON THE PREMISES OF M/S MKM SECURITIES PVT.LTD. AND THE DIT (INVESTIGATION WING), NEW DELHI HAS INFORMED THE ASSESSING OFFICER OF THE ASSESSEE TH AT THE ASSESSEE HAS INTRODUCED HIS OWN MONEY BY TAKING BOGUS ACCOMMODATION ENTRIES AMOUNTING TO `12 LAKHS FROM M/S MKM SECURITIES PVT.LTD. AND, THEREFORE, THE ASSESSING OFFICE R WAS JUSTIFIED IN MAKING THE ADDITION OF `12 LAKHS AND ALSO THE COMMISSIO N OF `24,000/- ON THE SAME AT THE RATE OF 2% OF THE AMOUNT OF ACCOM MODATION ENTRIES. HE RELIED ON THE ORDER OF THE ASSESSING OFFICE R. 5. I HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED DR A ND HAVE PERUSED THE ORDER OF THE ASSESSING OFFICER AND THE LEARN ED CIT(A). I FIND THAT THE LEARNED CIT(A) HAS PASSED A DETAILED SPE AKING ORDER ON THE ISSUE WHILE DELETING THE ADDITION MADE BY THE ASSES SING OFFICER. THE CIT(A) HAS GIVEN A FINDING THAT ASSESSEE HAS SUBMITTED AMPLE EVIDENCE TO CONTEND THAT THE SHARE TRANSACTION ENTERE D INTO BY IT WITH M/S MKM FINSEC PVT.LTD. WAS A GENUINE TRANSACTION. THE SHARES IN QUESTION WHICH WERE SUBJECTED TO SALE WERE STANDING IN THE BALANCE SHEET OF THE ASSESSEE. THE CIT(A) HAS FURTHER RECORDED THAT THE PARTY TO WHOM THE SALES HAVE BEEN MADE HAVE CONFIRMED THE T RANSACTIONS AND THE TRANSACTIONS WERE SUPPORTED BY DOCUMENTARY EVI DENCE. THE CIT(A) HAS CITED THE CASE OF ITO VS. VISHAL HOLDING AN D CAPITAL PVT.LTD., WHEREIN, IN RESPECT OF THE SAME VERY PARTY, THE ADDIT ION WAS MADE, WHICH WAS DELETED IN APPEAL BY THE CIT(A), AND THE T RIBUNAL, IN ITA NO.1788/DEL/2009, ORDER DATED 17 TH JULY, 2009, HAS UPHELD THE ORDER OF THE CIT(A) AND THE REVENUES APPEAL WAS DISMISSED. THE CIT(A) HAS ITA-112/DEL/2014 3 FURTHER RECORDED THAT THE AFOREMENTIONED ORDER OF T HE TRIBUNAL HAS BEEN CONSIDERED BY THE HON'BLE JURISDICTIONAL HIGH CO URT IN CIT VS. VISHAL HOLDING AND CAPITAL PVT.LTD. 200 TAXMAN 186 AND THE ORDER OF THE TRIBUNAL WAS UPHELD WITH THE FOLLOWING OBSERVATIO NS:- 6. WE ARE OF THE VIEW THAT THE ASSESSEE HAD PRODUCED COPIES OF ACCOUNTS, BILLS AND CONTRACT NOTES ISSUED BY M/ S MKM FINSEC PVT.LTD. AND HAD BEEN MAINTAINING BOOKS OF ACCOUNT AS PER COMPANIES ACT. THE ASSESSEE HAD ALSO DEMONSTRATED THE PURCHASE AND SALE OF SHARES OVER A PERIOD OF TIME AS SEEN FROM THE BALANCE SHEET/S. IN O UR OPINION; THE AO HAS SIMPLY ACTED ON THE INFORMATION RECEIVED FROM THE INVESTIGATION WING WITHOUT VERIFYI NG THE DETAILS FURNISHED BY THE ASSESSEE. THE ASSESSEE HAS ALSO PRODUCED BEST POSSIBLE EVIDENCE TO SUPPORT ITS CLAIM. CONSEQUENTLY THE ADDITION MADE BY THE AO CANNOT BE SUSTAINED. IN ANY EVENT, THE FACTUAL FINDING OF THE FINAL FACT FINDING AUTHORITY ARE NEITHER PERVERSE NOR CONTRARY TO RECORD. ACCORDINGLY, WE FIND THAT NO SUBSTANTIAL QU ESTION OF LAW ARISES IN THE PRESENT APPEAL WHICH, BEING BENEFIT OF MERIT, IS DISMISSED IN LIMINE BUT WITH NO ORDER AS TO CO STS. 6. LEARNED CIT(A) CONCLUDED THAT, ON MERITS, THE CASE OF THE ASSESSEE IS COVERED BY THE AFOREMENTIONED DECISION OF THE TRIBUNAL WHICH HAS BEEN CONFIRMED BY HONBLE HIGH COURT OF DE LHI. I FIND THAT THERE IS NO MISTAKE IN THE ORDER OF THE CIT(A) IN DEL ETING THE ADDITION MADE ON THIS ISSUE. THE REVENUE COULD NOT POINT OUT A NY SPECIFIC DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE IN VIOLATION OF RULE 46A AT THE BACK OF THE ASSESSING OFFICER. MERELY ON THE BASIS OF SOME INFORMATION RECEIVED BY THE ASSESSING OFFICER FROM THE INVESTIGATION WING, THE ADDITION COULD NOT BE MADE WITHOUT ANY CO RROBORATIVE EVIDENCE PLACED ON RECORD BY THE REVENUE TO JUSTIFY SUCH ADDITION. THE ASSESSEE HAS FILED IN THIS CASE DOCUMENTARY EVIDENCE I N SUPPORT OF ITS CLAIM OF HAVING ENTERED IN A GENUINE TRANSACTION WITH M/S MKM FINSEC PVT.LTD. THE ADDITION HAS BEEN MADE WITHOUT VERIFYING THE DETAILS FURNISHED BY THE ASSESSEE IN THIS CASE. THE TRIBU NAL, IN SIMILAR ITA-112/DEL/2014 4 FACTS, HAS UPHELD THE ORDER OF THE CIT(A) DELETING T HE ADDITION IN ITO VS. VISHAL HOLDING AND CAPITAL PVT.LTD. (SUPRA). THE ORD ER OF THE TRIBUNAL HAS BEEN CONFIRMED BY HON'BLE JURISDICTIONAL HIGH COU RT IN CIT VS. VISHAL HOLDING AND CAPITAL PVT.LTD. (SUPRA). ACCORDI NGLY, I HOLD THAT NO INTERFERENCE IN THE ORDER OF LEARNED CIT(A) IS CALLE D FOR, WHICH IS ACCORDINGLY CONFIRMED, AND THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED . DECISION PRONOUNCED IN THE OPEN COURT ON 3 RD JULY, 2015. SD/- (G. (G. (G. (G. C. GUPTA C. GUPTA C. GUPTA C. GUPTA ) )) ) VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -25(4), NEW DELHI. 25(4), NEW DELHI. 25(4), NEW DELHI. 25(4), NEW DELHI. 2. RESPONDENT : SHRI HARPINDER SINGH RATRA, SHRI HARPINDER SINGH RATRA, SHRI HARPINDER SINGH RATRA, SHRI HARPINDER SINGH RATRA, B BB B- -- -5/96, PASCHIM VIHAR, NEW DELHI. 5/96, PASCHIM VIHAR, NEW DELHI. 5/96, PASCHIM VIHAR, NEW DELHI. 5/96, PASCHIM VIHAR, NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR