Abhishek Mohata, Kolkata V. ITO, Ward - 22(2), Kolkata, Kolkata

ITA 122/KOL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54486 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-07-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 19-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K PRAMANIK
• Assessee Lawyers: S K TULSIYAN
• Keywords: Bogus purchase; Gift; Search and seizure; Question of law; Reassessment proceedings
• Section: 143(3); 153A; 133(6); 147; 131; 68

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , , , , , /AND , . !' . #$ ) [BEFORE HONBLE SRI MAHAVIR SINGH, JM & HONBLE SRI C. D. RAO, AM] % % % % / I.T.A NOS. 122 TO 124/KOL/2011 &' () &' () &' () &' ()/ // / ASSESSMENT YEARS: 2003-04 TO 2005-06 ABHISHEK MOHATA VS INCOME TAX OFFICER, WD-31(3 ), KOLKATA (PAN-AEKPM 9732 M) (+, /APPELLANT ) (-.+,/ RESPONDENT ) FOR THE APPELLANT: SRI S. K. TULSIYAN FOR THE RESPONDENT: SRI A. K. PRAMANIK #/ / ORDER PER MAHAVIR SINGH, JM ( , , , , ) THESE THREE APPEALS FILED BY ASSESSEE ARE ARISING O UT OF ORDERS OF CIT(A)-XIV, KOLKATA IN NOS. 463 TO 465/CIT(A)-XIX/08-09 VIDE DATED 14.1 2.2010. ASSESSMENTS WERE FRAMED BY ITO, WD-22(2), KOLKATA U/S 147 R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEARS 2003 -04 TO 2005-06 VIDE HIS ORDERS DATED 31.12.2008. SINCE FACTS ARE COMMON AND GROUNDS ARE IDENTICALLY WORDED, WE DISPOSE OF ALL THESE APPEALS BY THIS CONSOLIDATED ORDER FOR THE SA KE OF CONVENIENCE. 2. THE FIRST COMMON ISSUE I.E. GROUND NOS. 2, 3 AN D 4 OF THESE THREE APPEALS OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) IN UPHOLDIN G ACTION OF ASSESSING OFFICER ON LIMITATION ISSUE IN RESPECT TO ORDERS SERVED U/S. 143(3) R.W.S . 147 OF THE ACT. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE FAIRLY CONCEDED THAT HE HAS INSTRU CTIONS FROM ASSESSEE NOT TO PRESS THIS ISSUE AND ACCORDINGLY, THE SAME IS NOT PRESSED. AS THE ISSUE IS NOT PRESSED, WE DISMISS THE SAME AS NOT PRESSED. 3. THE NEXT COMMON ISSUE IN THESE THREE APPEALS OF THE ASSESSEE ON MERITS IS AGAINST THE ORDER OF CIT(A) CONFIRMING ADDITIONS MADE BY ASSESS ING OFFICER ON ACCOUNT OF GIFT RECEIVED FROM FOLLOWINGS IN RESPECTIVE ASSESSMENT YEARS: NAME ASSESSMENT YEAR AMOUNT (RS.) SRI DEEPAK KUMAR CHANGIA SHRI JAGDISH PRASAD SHRI ANIL GUPTA SHRI DEEPAK KUMAR GUPTA 2003-04 2004-05 3,00,000 3,00,000 2,00,000 5,00,000 ITA 122-124/K/2011 ABHISHEK MOHTA AY. 2003-04 05-06 2 SHRI RAJESH MAHESWARI SHRI BRIJESH KUMAR 2005-06 2002-2003 5,00,000 5,00,000 4. BRIEF FACTS RELATING TO ABOVE ISSUE ARE THAT ASS ESSING OFFICER RECEIVED INFORMATION FROM INVESTIGATION WING OF THE DEPARTMENT, NEW DELHI THA T ASSESSEE HAS BEEN A BENEFICIARY OF RACKET INVOLVING PERSONS PROVIDED BOGUS GIFT ENTRIES. ASS ESSING OFFICER NOTED THAT IT HAS RECEIVED CERTAIN INVESTIGATION FINDINGS AND IN THIS INVESTIG ATION IT WAS INFORMED THAT THESE PERSONS GIVEN GIFTS TO THE ASSESSEE, WHO ARE NOT TRACEABLE AS THE SUMMONS SENT TO THEM RETURNED UNSERVED BY POSTAL AUTHORITIES. ASSESSING OFFICER WAS OF THE P RIMA FACIE VIEW THAT THESE GIFTS WERE NOT GENUINE AND IN VIEW OF THIS REPORT, IN RESPECT OF T HESE THREE DONORS NAMELY, SHRI ANIL GUPTA, SHRI JAGDISH PRASAD AND SHRI DEEPAK KUMAR CHANGIA A DDED THESE GIFTS AS UNEXPLAINED. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A). CIT(A) CONFIRMED THE ADDITION BY STATING THAT THE SETTLED POSITION OF LAW IS THAT THE PRIMAR Y ONUS OF PROVING GENUINENESS OF CASH CREDIT U/S. 68 OF THE ACT LIES ON ASSESSEE AND IT IS REQUI RED TO EXPLAIN NATURE AND SOURCE OF ANY SUM CREDITED IN HIS BOOKS OF ACCOUNT AND FOR DOING THIS , THE ASSESSEE HAS TO PROVE THE FOLLOWING THREE CRITERION: I) IDENTITY OF THE CREDITOR/DONOR, II) THE GENUINENESS OF THE TRANSACTION AND III) CAPACITY OF CREDITOR/DONOR TO GIVE SUCH SUM. ACCORDING TO CIT(A) MAINLY FILING OF VARIOUS DOCUME NTS SUCH AS P&L ACCOUNT, BALANCE SHEET, I.T. ACKNOWLEDGMENT SHEET, PAN CARD ETC., THE ASSE SSEE MIGHT HAVE PROVED THE IDENTITY OF THE SO CALLED DONORS BUT FAILED TO PROVE THE GENUINENES S OF TRANSACTION AND CONFIRMED ADDITION BY HOLDING AS UNDER: AS DESCRIBED ABOVE IN THIS CASE ALSO IT IS FOUND T HAT THE PERSONS WHO ARE SHOWN TO HAVE GIVEN GIFT TO THE ASSESSEE ARE NOT EVEN DISTANTLY R ELATED TO THE ASSESSEE. HE EVEN DOES NOT KNOW WHERE DO THEY RESIDE. THUS THESE GIFTS ARE HI GHLY IMPROBABLE. OVER AND ABOVE THIS THESE PERSONS HAVE NOT RESPONDED TO THE SUMMONS ISS UED BY THE A.O. AND EVEN THE ASSESSEE HAS FAILED TO PRODUCE THEM DESPITE HAVING BEEN GIVEN OPPORTUNITY BY THE A.O. IN VIEW OF THE ABOVE DISCUSSION I HOLD THAT THE ASSESS EE HAS FAILED TO PROVE THAT THE AMOUNT OF RS.3,00,000/- EACH CLAIMED TO BE RECEIVED FROM S HRI DEEPAK KUMAR CHANGIA AND SHRI JAGDISH PRASAD ARE NOT GENUINE GIFTS FROM THESE PER SONS. THEREFORE, I UPHOLD THE ACTION OF THE A.O. IN ADDING THIS AMOUNT OF RS.6,00,000/- AS THE INCOME OF THE ASSESSEE U/S. 68 OF THE I. T. ACT. SIMILARLY, IN RESPECT OF ANIL GUPTA ALSO, CIT(A) CO NFIRMED THE ADDITION BY HOLDING AS UNDER: IN RESPECT OF SHRI ANIL GUPTA IT IS SEEN THAT HE A TTENDED IN RESPONSE TO THE SUMMONS ISSUED U/S. 131. INITIALLY IN HIS STATEMENT RECORD ED ON OATH ON 14.8.2008 HE CONFIRMED GIVING OF GIFT OF RS.2,00,000/- TO THE ASSESSEE BUT LATER ON 18.8.2008 ON HIS OWN HE RETRACTED HIS STATEMENT AND SUBMITTED THAT HE RECEI VED CASH OF RS.2,00,000/- FROM THE ASSESSEE OF SHRI ABHISHEK MOHATA AND DEPOSITED IN H IS BANK ACCOUNT AND THEN ISSUED HIM A CHEQUE OF RS.2,00,000, AS A GIFT. HE SUBMITTED T HAT THIS WAS BASICALLY AN ADJUSTMENT ITA 122-124/K/2011 ABHISHEK MOHTA AY. 2003-04 05-06 3 ENTRY FOR WHICH HE RECEIVED RS.5,000/- AS COMMISSIO N @ 2.5%. FROM THIS STATEMENT OF SHRI ANIL GUPTA IT IS CLEAR THAT THE GIFT OF RS.2,0 0,000/- CLAIMED TO BE RECEIVED BY THE ASSESSEE FROM HIM IS NOT GENUINE. SIMILAR ARE THE ADDITION IN RESPECT OF ASSESSMENT Y EAR 2004-05 IN ITA NO.123/K/2011 WHEREIN THE GIFT RECEIVED FROM DEEPAK KUMAR GUPTA AMOUNTING TO RS.5,00,000/-WAS ADDED EXACTLY ON SIMILAR CIRCUMSTANCES AND CONFIRMED BY CIT(A) BY HO LDING AS UNDER: AS DESCRIBED ABOVE IN THIS CASE ALSO IT IS FOUND T HAT THE PERSON WHO IS SHOWN TO HAVE GIVEN GIFT TO THE ASSESSEE IS NOT EVEN DISTANTLY RE LATED TO THE ASSESSEE. HE EVEN DOES NOT KNOW WHERE DOES THE DONOR RESIDE. THUS, THIS GIFT IS HIGHLY IMPROBABLE. OVER AND ABOVE THIS THE SO CALLED DONOR HAS NOT RESPONDED TO THE SUMMONS ISSUED BY THE A.O. AND EVEN THE ASSESSEE HAS FAILED TO PRODUCE HIM DESPITE HAVI NG BEEN GIVEN OPPORTUNITY BY THE A.O. IN VIEW OF THE ABOVE DISCUSSION I HOLD THAT THE ASS ESSEE HAS FAILED TO PROVE THAT THE AMOUNT OF RS.5,00,000/- CLAIMED TO BE RECEIVED FROM SHRI D EEPAK GUPTA IS GENUINE GIFT FROM THIS PERSON. THEREFORE, I UPHOLD THE ACTION OF THE A.O IN ADDING HIS AMOUNT OF RS.5,00,000/- AS THE INCOME OF THE ASSESSEE U/S. 68 OF THE I. T. ACT . SIMILARLY, IN ITA NO.124/K/2011 FOR ASSESSMENT YEAR 2005-06, GIFTS RECEIVED FROM SHRI RAJESH MAHESWARI AMOUNTING TO RS.5,00,000/- AND SHR I BRIJESH KUMAR AMOUNTING TO RS.5,00,000/- WERE ADDED BY A.O. EXACTLY ON IDENTIC AL FACTS AND CIRCUMSTANCES AND CIT(A) ALSO CONFIRMED BY HOLDING AS UNDER: AS DESCRIBED ABOVE IN THIS CASE ALSO IT IS FOUND T HAT THE PERSONS WHO ARE SHOWN TO HAVE GIVEN GIFT TO THE ASSESSEE ARE NOT EVEN DISTANTLY R ELATED TO THE ASSESSEE. HE EVEN DOES NOT KNOW WHERE DO THEY RESIDE. THUS THESE GIFTS ARE HIGHLY IMPROBABLE. OVER AND ABOVE THIS THESE PERSONS HAVE NOT RESPONDED TO THE SUMMON S ISSUED BY THE A.O. AND EVEN THE ASSESSEE HAS FAILED TO PRODUCE THEM DESPITE HAVING BEEN GIVEN OPPORTUNITY BY THE A.O. IN VIEW OF THE ABOVE DISCUSSION I HOLD THAT THE ASS ESSEE HAS FAILED TO PROVE THAT THE AMOUNT OF RS.5,00,000/- EACH CLAIMED TO BE RECEIVED FROM SHRI RAJESH MAHESWARI AND SHRI BRIJESH KUMAR ARE NOT GENUINE GIFTS FROM THESE PERSONS. THEREFORE, I UPHOLD THE ACTION TO THE A.O. IN ADDING THIS AMOUNT OF RS.10,0 0,000./- AS THE INCOME OF THE ASSESSEE U/S. 68 OF THE I. T. ACT. AGGRIEVED, ASSESSEE IS IN APPEALS BEFORE US. 5. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT IN ALL THESE THREE ASSESSMENT YEARS IN RESPECT OF SIX DONOR FACTS AND CIRCUMSTANCES ARE EXACTLY IDENTICAL. THE ASSESSEE FILED AFFIDAVI TS OF THE DONOR, INCOME-TAX AND WEALTH-TAX RETURN ACKNOWLEDGEMENT COPIES, BALANCE SHEETS, P&L ACCOUNTS, PAN CARDS, I.T. PROOF, BANK STATEMENTS FROM WHERE THESE GIFTS WERE MADE. WE FI ND FROM ASSESSMENT ORDERS THAT THE ASSESSING OFFICER HAS ISSUED SUMMONS TO SHRI ABHISH EK MOHTA, THE ASSESSEE, BUT HE FAILED TO APPEAR INSPITE OF NOTICE U/S. 131 OF THE ACT. HOWEV ER, SHRI ANIL GUPTA, THE DONOR ATTENDED IN RESPONSE TO SUMMONS, WHO ADMITTED IN HIS STATEMENT RECORDED ON OATH ON 14.8.2008 VIDE QUESTION AND ANSWER NO. 5 THAT HE HAD GIVEN RS.2,00 ,000/- AS GIFT TO SHRI ABHISHEK MOHTA IN THE RELEVANT FY 2002-03 RELEVANT TO ASSESSMENT YEAR 200 3-04. SUBSEQUENTLY, SHRI ANIL GUPTA ITA 122-124/K/2011 ABHISHEK MOHTA AY. 2003-04 05-06 4 FILED A LETTER DATED 18.8.2008 REVERTED BACK BY STA TING THAT THIS MONEY WAS RECEIVED FROM SHRI ABHISHEK MOHTA AND DEPOSITED IN HIS ACCOUNT AND BAS ICALLY THIS IS AN ENTRY FROM WHICH HE HAD EARNED 2.5% AS COMMISSION. SHRI DEEPAK KR. CHANGIA AND SHRI JAGDISH PRASAD COULD NOT BE PRODUCED BY THE ASSESSEE EVEN THOUGH HE WAS REQUEST ED BY ASSESSING OFFICER. IN VIEW OF THE ABOVE FACTS, THE FIRST QUESTION ARISES WHETHER THE ASSESSING OFFICER HAS EVER TRIED TO VERIFY THE INCOME TAX RECORDS OF THESE THREE DONORS AND IN CAS E, THE ASSESSING OFFICER HAS NOT VERIFIED THE INCOME-TAX AND WEALTH-TAX RECORD DESPITE HAVING I.T . AND W.T PARTICULARS AND ACKNOWLEDGMENT OF RETURNS BEFORE HIM, IT CANNOT BE SAID THAT SHRI DEEPAK KR. CHANGIA AND SHRI JAGDISH PRASAD HAVE NO CREDITWORTHINESS AS THE ASSESSEE IS ABLE TO PROVE FROM BANK STATEMENTS AND AFFIRMING BY AFFIDAVITS THE CREDITWORTHINESS OF THESE DONORS. I N RESPECT TO SHRI ANIL GUPTA, WHO FIRST ADMITTED ON OATH THAT HE HAD GIVEN RS.2,00,000/- TO SHRI ABHISHEK MOHTA VIDE STATEMENT DATED 14.8.2008 AND SUBSEQUENTLY RETRACTED BY STATING THA T THIS RS.2,00,000/- WAS RECEIVED FROM SHRI ABHISHEK MOHTA, THE ASSESSEE AND DEPOSITED IN HIS A CCOUNT AND BASICALLY THIS IS AN ENTRY TO EARN COMMISSION @ 2.5%. NOW, WE ARE GUIDED BY THE DECIS ION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. EASTERN COMMERCIAL ENTERPRISES (1994) 210 ITR 103 WHEREIN HONBLE HIGH COURT HAS OBSERVED THAT A MAN INDULGING IN DOUBLE SPEAKING CANNOT BE SAID B Y ANY MEANS A TRUTHFUL MEN AT ANY STAGE AND NO COURT CAN DECIDE ON WHICH OCCASION HE WAS TRUTHFUL. WE FIND THAT EXACTLY IN SIMILAR CIRCUMSTANCES, MUMB AI BENCH OF THIS TRIBUNAL IN THE CASE OF ACIT VS. MRS. UTTARA S. SHOREWALA, ITA NOS. 5506 & 5507/MUM/2009 FOR A.Y. 2001-02 AND 2002-03 AND C.O. NOS. 107&108/MUM/2010 DATED 25.05. 2011 VIDE PARA 21 TO 25 HAS TAKEN A VIEW AS UNDER: 21. IN THE VIEW WE HAVE TAKEN, IT IS NOT NECESSARY TO DISCUSS THE MERITS OF THE ADDITIONS CANVASSED IN THE APPEALS BY THE DEPARTMENT. HOWEVE R, SINCE THE MATTER WAS ARGUED BEFORE US EVEN ON MERITS, WE CONSIDER IT PROPER TO DECIDE THE DEPARTMENTS APPEALS ON MERITS. THE ONLY EVIDENCE RELIED UPON BY THE ASSES SING OFFICER IN THE ASSESSMENT ORDERS IS THE STATEMENT AND AFFIDAVIT OF SHRI MUKES H CHOKSI TAKEN IN THE COURSE OF THE PRESENT PROCEEDINGS. THIS EVIDENCE ONLY REITERATES THAT SHRI MUKESH CHOKSI STATED IN THE COURSE OF THE ORIGINAL ASSESSMENT PROCEEDINGS, AS CAN BE SEEN FROM PARAGRAPH 5.1 OF THE REASSESSMENT ORDERS PASSED ON 29.03.2006, WH ICH HAS BEEN REPRODUCED IN PARAGRAPH 7.1 OF THE ASSESSMENT ORDER FOR THE ASSES SMENT YEAR 2001-02. IN PARAGRAPH 5.1 OF THE REASSESSMENT ORDERS PASSED EARLIER, THE ASSESSING OFFICER HAS REFERRED TO THE SEARCH AND SEIZURE OPERATION ON SHRI MUKESH CHOKSI, WHO WAS THE DIRECTOR OF THE BROKER COMPANIES. IN THE COURSE OF THE EARLIER REAS SESSMENT PROCEEDINGS THE ASSESSEE WAS CONFRONTED WITH THE STATEMENT OF SHRI MUKESH CH OKSI. THE ASSESSEE ASKED FOR CROSS EXAMINATION OF SHRI MUKESH CHOKSI. BEFORE THE REQUE ST COULD BE CONSIDERED, THE ASSESSEE FILED AN AFFIDAVIT FROM SHRI MUKESH CHOKSI IN HIS CAPACITY AS MANAGING DIRECTOR OF M/S RICHMOND SECURITIES PVT. LTD., STAT ING THAT DURING THE YEAR UNDER CONSIDERATION THE COMPANY HAD DONE DEALINGS ON BEHA LF OF THE ASSESSEE AND THE TRANSACTIONS WERE DULY RECORDED IN THE BOOKS OF THE COMPANY. THE ASSESSING OFFICER REJECTED THE AFFIDAVIT ON THE GROUND THAT IT DID NO T CERTIFY THAT THE TRANSACTIONS IN QUESTION WERE EFFECTED THROUGH RECOGNIZED STOCK EXC HANGES. HE THEREFORE SENT NOTICES TO THE NATIONAL STOCK EXCHANGE OF INDIA LIMITED CAL LING FOR THE DETAILS OF THE ITA 122-124/K/2011 ABHISHEK MOHTA AY. 2003-04 05-06 5 TRANSACTIONS ENTERED INTO BY THE ASSESSEE THROUGH M /S RICHMOND SECURITIES PVT. LTD. AND M/S AIEMBIC SECURITIES PVT. LTD. NSE REPLIED TH AT M/S ALEMBIC SECURITIES PVT. LTD. WAS A DECLARED DEFAULTER WITH EFFECT FROM 16.06.199 9. WHEN THIS WAS BROUGHT TO THE NOTICE OF THE ASSESSEE, THE ASSESSEE SUBMITTED THAT SHE SHOULD BE ALLOWED TO CROSS EXAMINE THE BROKER AND ALSO STATED THAT THE BROKER HAD ALSO FILED AN AFFIDAVIT CONFIRMING THE TRANSACTIONS WITH THE ASSESSEE. THE ASSESSEES STAND WAS REJECTED BY THE ASSESSING OFFICER IN THE COURSE OF THE EARLIER REAS SESSMENT PROCEEDINGS ON THE GROUND THAT SINCE THE AFFIDAVIT FROM THE BROKER WAS OBTAIN ED BY THE ASSESSEE HERSELF; THERE WAS NO NEED TO ALLOW CROSS EXAMINATION. AS REGARDS M/S RICHMOND SECURITIES PVT. LTD., NSE WAS GIVEN THE RELEVANT DETAILS OF THE CONTRACT NOTE / BROKER BILLS, ETC. WITH A REQUEST TO VERIFY THE SAME WITH THEIR RECORDS AND I N RESPONSE THERETO NSE STATED THAT THE TRADE NUMBERS MENTIONED IN THE CONTRACT NOTES W ERE INCOMPLETE AND NOT IN CONFORMITY WITH NSES SYSTEM OF MAINTAINING THE TRA DE NUMBERS. FROM THIS THE ASSESSING OFFICER INFERRED THAT THE CONTRACT NOTES CONTAINED BOGUS NUMBERS. ON THESE FACTS THE ASSESSING OFFICER IN THE COURSE OF THE EA RLIER REASSESSMENT PROCEEDINGS HELD THAT THE ASSESSEE HAD DECLARED BOGUS PURCHASE AND S ALE OF SHARES AND SHOWN BOGUS CAPITAL GAINS IN ORDER TO INTRODUCE HER OWN UNACCOU NTED INCOME INTO THE BOOKS. 22. ALL THE ABOVE FACTS ARE SEEN MENTIONED IN PARAG RAPH 7.1 OF THE IMPUGNED ASSESSMENT ORDER AND STRONG RELIANCE HAS BEEN PLACE D THEREON IN ADDITION TO THE STATEMENT RECORDED FROM SHRI MUKESH CHOKSI IN THE C OURSE OF THE PRESENT PROCEEDINGS AND THE AFFIDAVIT FILED BY HIM ON 04/05.12.2008. 23. THE ASSESSEE HAS PLACED STRONG RELIANCE ON THE ORDER OF THE ITAT IN THE CASE OF SRNT VARUNADEVI SHOREWALA VS. ITO, IN ITA NO:1611/MUM/20 07 (ASSESSMENT YEAR 2001-02), DATED 07.05.2009; ITO VS. MR SANDEEP R SHOREWALA, H UF, IN ITA NOS:5722 & 5723/MUM12007 (ASSESSMENT YEARS 2001-02 & 2002-03), DATED 26.02.2009; AND MUKESH R MAROLIA (SUPRA). THESE THREE ORDERS HAVE B EEN FILED AT PAGES 183 TO 210 OF THE ASSESSEES PAPER BOOK. WE HAVE ALREADY SEEN THA T IN THE CASE MR SANDEEP R SHOREWALA, HUF AND SMT VARUNADEVI SHOREWALA THE TRI BUNAL HAS PLACED RELIANCE ON THE ORDER IN THE CASE OF MUKESH R MAROLIA (SUPRA) A ND DELETED THE ADDITION. A PERUSAL OF PARAGRAPH 9 OF THE TRIBUNALS ORDER DATED 26.02. 2009 IN THE CASE OF MR SANDEEP R SHOREWALA, HUF (SUPRA) SHOWS THAT EVEN IN THAT CASE HEAVY RELIANCE HAD BEEN PLACED BY THE ASSESSING OFFICER ON THE STATEMENTS GIVEN BY SHRI MUKESH CHOKSI DURING THE SEARCH AND SEIZURE OPERATIONS IN HIS CASE. THE TRIB UNAL ALSO NOTED THAT THE ASSESSING OFFICER HAD MADE ENQUIRIES WITH THE NSE BY NOTICES ISSUED UNDER SECTION 133(6) FOR VERIFYING THE TRANSACTIONS SHOWN BY THE ASSESSEE AN D BASED ON THE REPLIES SUBMITTED BY NSE, HAD COME TO A CONCLUSION THAT THE TRANSACTIONS WERE NOT VERIFIABLE. IN PARAGRAPH 9 THE TRIBUNAL HAS ALSO NOTED THE ASSESSEES CONTEN TION THAT THE SHARE TRANSACTIONS COULD NEVER BE TRACED THROUGH NSE SINCE THEY WERE A LL OFF MARKET DEALS AND SUCH OFF MARKET DEALS WERE NOT UNLAWFUL. THE TRIBUNAL HAS FU RTHER NOTED THE AFFIDAVIT OF SHRI MUKESH CHOKSI, IN WHICH HE CONFIRMED THE TRANSACTIO NS CARRIED OUT FOR THE ASSESSEE IN THAT CASE. THE TRIBUNAL FURTHER NOTED THAT THE CIT( A) HAD RELIED ON THE FINDINGS OF THE TRIBUNAL IN THE CASE OF MUKESH R MAROLIA (SUPRA) IN WHICH CASE OR OF THE BROKERS INVOLVED WAS M/S RICHMOMD SECURITIES PVT. LTD. AFTE R REPRODUCING THE RELEVANT PARAGRAPHS IN WHICH THE TRIBUNAL HAD HELD IN MUKES H R MAROLIAS CASE THAT OFF MARKET TRANSACTION WERE NOT ILLEGAL AND SUCH TRANSA CTIONS COULD NOT BE TRACED THROUGH NSE AND AFTER NOTING THE RIVAL CONTENTIONS THE TRIB UNAL HELD IN THE CASE OF MR. SANDEEP R SHOREWALA, HUF (SUPRA) THAT THE CASE OF MUKESH A MAROLIA WAS FACTUALLY OF THE SAME MATRIX EXCEPT FOR THE ASPECT RELATING TO THE A FFIDAVIT GIVEN BY SHRI MUKESH CHOKSI AND IN THIS VIEW OF THE MATTER IT WAS HELD BY THE T RIBUNAL THAT THERE WAS NO BASIS FOR THE ADDITION. 24. IN THE PRESENT PROCEEDINGS THE ONLY ADDITIONAL FEATURE IS THAT SHRI MUKESH CHOKSI HAD GIVEN A STATEMENT ON 27.11.2008 BEFORE THE ASSE SSING OFFICER AND ALSO CONFIRMED IT ITA 122-124/K/2011 ABHISHEK MOHTA AY. 2003-04 05-06 6 BY AN AFFIDAVIT DATED 04/05.12.2008. THIS ASPECT HA S BEEN TAKEN CARE OF BY THE CIT(A) BY RELYING ON THE JUDGMENT OF THE CALCUTTA HIGH COU RT IN THE CASE OF CIT VS. EASTERN COMMERCIAL ENTERPRISES (SUPRA) IN WHICH THE HIGH CO URT OBSERVED THAT A MAN INDULGING IN DOUBLE SPEAKING CANNOT BE SAID TO BE A TRUTHFUL MAN AT ANY STAGE AND NO COURT CAN DECIDE ON WHICH OCCASION HE WAS TRUTHFUL. APART FROM THIS, WHAT WE FIND IS THAT THE STATEMENT AND THE AFFIDAVIT RELIED UPON BY THE ASSESSING OFFICER IN THE PRESENT PROCEEDINGS MERELY REITERATE SHRI MUKESH CHOKSIS E ARLIER STATEMENT GIVEN IN THE COURSE OF THE SEARCH OPERATIONS IN HIS CASE. THEY D O NOT CARRY THE CASE OF THE DEPARTMENT MUCH AHEAD. THE EARLIER STATEMENT OF SHR I MUKESH CHOKSI HAS BEEN THE SUBJECT MATTER OF SCRUTINY BY THE TRIBUNAL IN THE C ASE OF MR. SANDEEP R SHOREWALA, HUF (SUPRA), WHICH WE HAVE NOTED IN THE PRECEDING P ARAGRAPH. THE DECISION OF THE TRIBUNAL IN THE CASE OF MR SANDEEP R SHOREWA, HUF ( SUPRA) HAS BEEN FOLLOWED BY THE TRIBUNAL IN THE CASE OF SMT VARUNADEVI SHOREWALA (S UPRA). BOTH THESE CASES ARE CNNECTED TO THE ASSESSEES CASE AND THE FACTS ARE A LSO SIMILAR EXCEPT THAT IN THE PRESENT CASE THE FURTHER DEVELOPMENT IS THAT THERE WAS A SE ARCH ON 28.06.2006 RESULTING IN ASSESSMENTS MADE UNDER SECTION 153A READ WITH SECTI ON 143(3), IN THE COURSE OF WHICH SHRI MUKESH CHOKSI MADE A STATEMENT ON 26.11.2008 A ND ALSO SUBMITTED AN AFFIDAVIT ON 04/05.12.2008 REITERATING WHAT HE STATED IN THE EARLIER SEARCH PROCEEDINGS ON HIM, WHICH STATEMENT HAD BEEN RELIED UPON BY THE ASSESSI NG OFFICER IN THE COURSE OF THE EARLIER REASSESSMENT PROCEEDINGS. WE HAVE ALREADY N OTED THAT THE EARLIER REASEESSMENT PROCEEDINGS WERE TAKEN IN APPEAL BY THE ASSESSEE TO THE CIT(A), WHO BY ORDER DATED 26.06.2007 DELETED THE ADDITIONS ARID THE DEPARTMEN T DID NOT FILE ANY FURTHER APPEAL TO THE TRIBUNAL. HAVING ACCEPTED THE ORDER OF THE CIT( A) DATED 26.06.2007, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REPEATING THE SAME ADD ITION IN THE PRESENT PROCEEDINGS BY MERELY SEEKING TO RELY ON THE STATEMENT OF SHRI MUK ESH CHOKSI AND HIS AFFIDAVIT WHICH ARE NOTHING BUT REITERATION OF THE STAND WHICH HE T OOK IN THE EARLIER PROCEEDINGS ALSO. 25. FOR THE ABOVE REASONS WE ARE OF THE VIEW THAT E VEN ON MERITS THE ADDITIONS ARE NOT JUSTIFIED. WE THEREFORE CONFIRM THE ORDERS OF THE C IT(A) FOR BOTH THE YEARS EVEN ON MERITS. 6. FURTHER, WE FIND THAT THE ASSESSEE HAS RECEIVED GIFTS FROM THE ABOVE STATED SIX PERSONS IN THREE PREVIOUS YEARS RELEVANT TO ASSESSMENT YEARS U NDER CONSIDERATION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FURNISHED GIFT CONFIRMATIONS GIVING FULL ADDRESSES, PERMANENT ACCOUNT NOS., BALANCE SHEETS FILED ALONG WITH RETURN OF INC OME OF THE RESPECTIVE DONORS, COPIES OF ACCOUNT. IT WAS ALSO EXPLAINED THAT THE ASSESSEE RE CEIVED THESE GIFTS BY ACCOUNT PAYEE CHEQUE. WE FIND THAT ONLY PREMISE OF THE REVENUE FOR TREATI NG THESE GIFTS AS UNEXPLAINED IS THAT THE CREDIT WORTHINESS OF CASH DEPOSITS BY THESE DONORS IN THEI R ACCOUNT BEFORE GIVING LOAN TO ASSESSEE IS NOT PROVED. THE ASSESSEE SUBMITTED EVERY DETAIL IN RESP ECT TO THESE DONORS AND REVENUE ISSUED NOTICES U/S. 131 OF THE ACT, WHICH REMAINED UNSERVE D. WE FIND THAT THE ASSESSEE HAS DISCHARGED THE INITIAL ONUS WHICH LAYS ON HIM IN TERMS OF SECT ION 68 BY PROVING THE IDENTITY OF DONORS BY GIVING THEIR COMPLETE ADDRESSES, PERMANENT ACCOUNT NOS., COPIES OF BALANCE SHEET AND P & L ACCOUNTS. IT HAS ALSO PROVED THE CAPACITY OF THE D ONORS BY SHOWING THAT THE AMOUNTS WERE RECEIVED BY ASSESSEE BY WAY OF ACCOUNT PAYEE CHEQUE S DRAWN FROM BANK ACCOUNTS OF DONORS AND THE ASSESSEE WAS NOT EXPECTED TO PROVE THE GENUINEN ESS OF CASH DEPOSITED IN BANK ACCOUNTS OF THOSE DONORS. WE ARE OF THE VIEW THAT REVENUE, APA RT FROM ISSUING NOTICES UNDER SECTION 131 OF ITA 122-124/K/2011 ABHISHEK MOHTA AY. 2003-04 05-06 7 THE ACT, DESPITE THE FACT THAT IT WAS HAVING COMPLE TE ADDRESSES SUBMITTED BY DONORS ITSELF, DID NOT PURSUE THE MATTER FURTHER. THE REVENUE DID NOT EXAMINE THE SOURCE OF INCOME OF THE SAID DONORS TO FIND OUT WHETHER THEY WERE CREDITWORTHY. THERE WAS NO EFFORT MADE TO PURSUE DONORS. IN THESE CIRCUMSTANCES, ASSESSEE COULD NOT DO ANYTH ING FURTHER. THIS VIEW OF OUR IS SUPPORTED BY THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE C ASE OF DCIT V ROHINI BUILDERS (2002) 256 ITR 360 (GUJ) WHEREIN IT HELD AS UNDER:- 3.14 I HAVE CONSIDERED THE FACTS OF THE CASE AND S UBMISSIONS OF THE AR OF THE APPELLANT CAREFULLY. I HAVE ALSO GONE THROUGH THE DETAILS FIL ED BEFORE ME BY THE AR AND DECISIONS RELIED UPON BY HIM. I HAVE ALSO GONE THROUGH THE OB SERVATIONS OF THE AO IN THE ASSESSMENT ORDER AND THEN IN THE REMAND REPORT. I F IND SUFFICIENT FORCE IN THE CONTENTIONS PUT FORTH BY THE AR OF THE APPELLANT. FURTHER, IT I S FOUND THAT THE APPELLANT HAS DISCHARGED ITS ONUS BY GIVING DETAILS LIKE CONFIRMATION LETTER S, ADDRESSES OF THE PARRIES FROM WHOM THE APPELLANT HAD TRANSACTED AND THE PA NO. AND DES IGNATION OF THE ASSESSING OFFICERS WHERE THEY ARE ASSESSED TO TAX. THE AO COULD HAVE C ARRIED OUT DETAILED INQUIRIES IN THE PERSONAL ASSESSMENTS OF THE PARTIES CONCERNED, WHIC H HE HAS NOT DONE THOUGH THEY ARE ASSESSED TO TAX REGULARLY BY OTHER ASSESSING OFFICE RS OF THE SAME RANGE. FURTHER, I FIND THAT THE AO HAS NOT BROUGHT ON RECORD ANY MATERIAL EVIDENCE FOR SUCH ADDITION. IN THE CASE OF DEPUTY CIT V ROHINI BUILDERS REPORTED IN 25 6 ITR 360, THE HON'BLE GUJARAT HIGH COURT HAS HELD THAT ONCE HE ASSESSEE HAS DISCHARGED THE INITIAL ONUS BY PROVING THE IDENTITY OF CREDITORS BY GIVING THEIR COMPLETE ADDR ESS, GIR /PA NOS AND THE COPIES OF ASSESSMENT ORDER WHEREVER READILY AVAILABLE AND AMO UNTS HAVE BEEN RECEIVED BY CHEQUES, THE ADDITIONS IS NOT JUSTIFIED. FURTHER, I N THE CASE OF ORISSA CORPORATION REPORTED IN 159 ITR 79, THE HON'BLE SUPREME COURT H AS HELD THAT WHEN THE ASSESSEE FURNISHED NAMES AND ADDRESSES OF THE ALLEGED CREDIT ORS AND THE GIR NUMBERS, THE BURDEN SHIFTS TO THE DEPARTMENT TO ESTABLISH THE REVENUES CASE AND IN ORDER TO SUSTAIN THE ADDITION THE REVENUE HAS TO PURSUE THE ENQUIRY AND TO ESTABLISH THE LACK OF CREDITWORTHINESS AND MERE NON-COMPLIANCE OF SUMMONS ISSUED BY THE AO U/S 131, BY THE ALLEGED CREDITORS WILL NOT BE SUFFICIENT TO DRAW AN ADVERSE INFERENCE AGAINST THE ASSESSEE. IN THE INSTANT CASE THE APPELLANT HAD DISCHARGED HI S ONUS BY GIVING NAMES, ADDRESSES, GIR/PA NOS., COPY OF ACKNOWLEDGEMENT OF RETURNS OF INCOME, AND BY FILING AFFIDAVIT. IT IS SEEN FROM THE RECORD THAT THE AO HAS NEITHER CALLED FOR THE PARTY CONCERNED DURING THE ASSESSMENT PROCEEDINGS NOR HAS ISSUED SUMMONS U/S 1 31 OF THE IT ACT. FURTHER, I AM OF THE VIEW THAT WHEN THE APPELLANT HAS AFFIRMED THE W HOLE FACTS OF THE CASE BY A DETAILED SPEAKING AFFIDAVIT, THE GENUINENESS OF THE TRANSACT IONS SHOULD NOT BE DOUBTED UNLESS ON EXAMINATION IT IS FOUND UNTRUE. FURTHER, THE AO IN THE REMAND REPORT HAS MENTIONED THAT RELEVANT RECORDS ARE NOT TRACEABLE AND THE CASH CRE DITS INTRODUCED IN THE AFORESAID TWO NAMES ARE NOT SUBJECT TO VERIFICATION AND CANNOT BE TREATED AS SATISFACTORILY EXPLAINED. THE APPELLANT HAS ALREADY SUBMITTED THE COPIES ACKN OWLEDGEMENTS OF RETURNS FILED BY THE CASH CREDITORS AND THUS DISCHARGED HIS ONUS AND IF AO IS NOT ABLE TO VERIFY IT BECAUSE RETURN RECEIPT REGISTER IS NOT TRACEABLE, IT IS NOT APPELLANTS FAULT AND, THE APPELLANT SHOULD NOT BE PENALIZED BY MAKING HUGE ADDITIONS. H AVING CONSIDERED THE FACTS OF THE CASE CAREFULLY, SUBMISSIONS OF THE AR, OBSERVATIONS OF THE AO IN THE ASSESSMENT ORDER AS WELL AS IN THE REMAND REPORT AND ALSO CONSIDERING T HE DECISIONS, REFERRED TO ABOVE, THE ADDITION MADE BY THE AO IS UNCALLED FOR AND NOT JUS TIFIABLE ON ACCOUNT OF UNSECURED LOANS RECEIVED BY THE APPELLANT. THE ADDITION MADE BY THE AO OF RS.1,92,18,600/- IS, THEREFORE, DELETED. FURTHER, WE FIND THAT THIS ISSUE IS COVERED BY THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF CIT, ORISSA VS.- ORISSA CORPORATION P. LTD. REP ORTED IN (1986) 159 ITR 78, WHEREIN ITA 122-124/K/2011 ABHISHEK MOHTA AY. 2003-04 05-06 8 HONBLE APEX COURT HELD THAT IN THIS CASE THE RESPONDENT HAD GIVEN THE NAMES AN D ADDRESSES OF THE ALLEGED CREDITORS. IT WAS IN THE KNOWLEDGE O F THE REVENUE THAT THE SAID CREDITORS WERE INCOME-TAX ASSESSEES. THEIR INDEX NUMBERS WERE IN T HE FILE OF THE REVENUE. THE REVENUE, APART FROM ISSUING NOTICES UNDER SECTION 131 AT THE INSTA NCE OF THE RESPONDENT, DID NOT PURSUE THE MATTER FURTHER. THE REVENUE DID NOT EXAMINE THE SOU RCE OF INCOME OF THE SAID ALLEGED CREDITORS TO FIND OUT WHETHER THEY WERE CREDITWORTHY. THERE W AS NO EFFORT MADE TO PURSUE THE SO-CALLED ALLEGED CREDITORS. IN THOSE CIRCUMSTANCES, THE RESP ONDENT COULD NOT DO ANYTHING FURTHER. IN THE PREMISES, IF THE TRIBUNAL CAME TO THE CONCLUSION TH AT THE RESPONDENT HAD DISCHARGED THE BURDEN THAT LAY ON IT, THEN IT COULD NOT BE SAID THAT SUCH A CONCLUSION WAS UNREASONABLE OR PERVERSE OR BASED ON NO EVIDENCE. IF THE CONCLUSION WAS BASED O N SOME EVIDENCE ON WHICH A CONCLUSION COULD BE ARRIVED AT, NO QUESTION OF LAW AS SUCH ARO SE. IN VIEW OF THE ABOVE FACTUAL AND LEGAL POSITION, WE ARE OF THE VIEW THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE R EVENUE. WE REVERSE THE ORDERS OF THE LOWER AUTHORITIES AND ALLOW APPEALS OF THE ASSESSEE. 7. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOW ED. 8. ORDER IS PRONOUNCED IN OPEN COURT ON 12.08.11 SD/- SD/- . !' . , #$ , (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( '$ '$ '$ '$) )) ) DATED 12 TH AUGUST, 2011 01 &23 4 JD.(SR.P.S.) #/ 5 -6 7#6(8- COPY OF THE ORDER FORWARDED TO: 1 . +, / APPELLANT SHRI ABHISHEK MOHATA, C/O MEC TUBES PVT . LTD., 14, NETAJI SUBHAS ROAD, KOLKATA-700 001. 2 -.+, / RESPONDENT, ITO, WARD-22(2), KOLKATA. 3 . /& / CIT, KOLKATA. 4. /& ( )/ CIT(A), KOLKATA. 5 . ?@ -& / DR, KOLKATA BENCHES, KOLKATA .6 -/ TRUE COPY, #/&A/ BY ORDER, 3 /ASSTT. REGISTRAR .