Shri Shankarlal Agarwalla, Kolkata V. ACIT, Central Circle - VI, Kolkata, Kolkata

ITA 1249/KOL/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7541 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2012
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 26-09-2011
• Court: TRIBUNAL
• Department Lawyers: A S MONDAL
• Assessee Lawyers: S K TULSIYAN
• Keywords: Accommodation entries

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH A, KOLKATA () BEFORE , ,, , , SHRI MAHAVIR SINGH, JUDICIAL MEMBER. /AND . .. . ! ! ! !. .. . , '# SHRI C.D.RAO, ACCOUNTANT MEMBER $ $ $ $ / ITA NO . 1249/KOL/2011 %& '(/ ASSESSMENT YEAR : 2007-08 (*+ / APPELLANT ) SHRI SHANKARLAL AGARWALLA, KOLKATA (PAN: AGAPA 5187 A) (,-*+/ RESPONDENT ) A.C.I.T., CENTRAL CIRCLE- VI, KOLKATA $ $ $ $ / ITA NO . 1250/KOL/2011 %& '(/ ASSESSMENT YEAR : 2007-08 (*+ / APPELLANT ) M/S SHANKARLAL AGARWALLA (HUF), KOLKATA (PAN: AAEHS 693 M) (,-*+/ RESPONDENT ) A.C.I.T., CENTRAL CIRCLE- VI, KOLKATA *+ . / '/ FOR THE APPELLANT: SHRI S.K.TULSIYAN ,-*+ . / '/ FOR THE RESPONDENT: SHRI A.S.MONDAL 0%1 . !# /DATE OF HEARING : 09.01.2012. 2' . !# /DATE OF PRONOUNCEMENT : 09.01.2012. '3 / ORDER ( (( ( . .. . ! ! ! !. .. . ) )) ), , , , '# PER SHRI C.D.RAO, AM THE ABOVE APPEALS ARE FILED BY ASSESSEES AGAINST OR DER DATED 01.07.2011 OF THE LD. CIT(A)-CENTRAL-I, KOLKATA PERTAINING TO A.YR. 2007-08. 2 2. SINCE THE FACTS OF THE CASE AND GROUNDS OF APPE AL IN BOTH THE APPEALS ARE IDENTICAL FOR THE SAKE OF CONVENIENCE THE GROUNDS O F APPEAL RAISED BY ASSESSEE AS WELL AS HUF ARE REPRODUCED AS UNDER :- 1. THE ORDERS PASSED BY THE LOWER AUTHORITIES ARE ARBITRARY, ERRONEOUS, WITHOUT PROPER REASONS, INVALID AND BAD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A), AFTER ADMITTING THAT THE SHARES IN QUESTION HAD BEEN DULY PURCHASED AND SOLD THROUGH REGISTERED STOCK BROKERS FROM THE CALCUTTA STOCK EX CHANGE AT THE PREVAILING MARKET RATES AND THAT THE PAYMENTS FOR PURCHASES AND RECEI PTS FOR SALES HAD BEEN MADE AND RECEIVED THROUGH CHEQUES AND FURTHER THAT THE SAID SHARES HAD BEEN CREDITED AND DEBITED TO THE D-MAT ACCOUNT OF THE APPELLANT; ERRE D IN HOLDING, TOTALLY ON SURMISE AND CONJECTURE, THAT THE APPELLANT HELD FAILED IN T HE TEST OF HUMAN PROBABILITIES AND HAD BEEN UNABLE TO PROVE THE GENUINENESS OF THE SHA RE TRANSACTIONS UNDER CONSIDERATION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN HOLDING, WITHOUT ANY EVIDENCE, THAT THE APPELLANT H AD PAID PRICE MORE AND ABOVE THE DISCLOSED CONSIDERATION. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTIONS OF THE A.O., BY FULLY RELYING ON THE ALLEGED CONFESSIONARY STATEMENTS OF THIRD PARTIES WITHOUT AFFORDING THE A PPELLANT PROPER OPPORTUNITY TO EXAMINE THEM AND IN CONCLUDING, SOLELY ON THAT BASI S, THAT THE APPELLANT HAD SHOWN BOGUS LONG-TERM CAPITAL GAINS OF RS.9,35,130/- IN T RANSACTIONS OF SHARES OF M/S SHREE NIDHI TRADING CO. BY TAKING ACCOMMODATION ENTRIES A ND, IN THAT VIEW, IN ADDING BACK THE AMOUNT OF RS.9,35,130/- AS UNDISCLOSED INCOME O F THE APPELLANT. 5. THE APPELLANT CRAVES LEAVE TO AMEND, ALTER, MODI FY, SUBSTITUTE, ADD TO, ABRIDGE AND! OR RESCIND ANY OR ALL OF THE ABOVE GROUNDS. 3. AT THE TIME OF HEARING BEFORE US THE LD. COU NSEL APPEARING ON BEHALF OF ASSESSEE HAS SUBMITTED THAT ON SIMILAR ISSUE IN THE CASE OF SMT.RITA DEVI AND OTHERS VS DCIT,CC-VI, KOLKATA FOR A.YRS. 2003-04 TO 2007-08 T HIS TRIBUNAL HAS ALLOWED ALL THE APPEALS IN FAVOUR OF THE ASSESSEE IN ITA NOS.22-26/ KOL/2011 ORDER DATED 14.07.2011. SINCE THE FACTS IN THIS CASE ARE IDENTICAL TO THAT OF THE DECISION OF THE TRIBUNAL FOR A.YRS. 2003-04 TO 2007-08 HE REQUESTED TO ALLOW BOT H THE APPEALS OF ASSESSEE. 4. ON THE OTHER HAND THE LD. DR APPEARING ON B EHALF OF THE REVENUE THOUGH RELIED ON THE ORDERS OF REVENUE AUTHORITIES COULD NOT CONT RADICT THE SAID REQUEST OF THE LD. COUNSEL FOR ASSESSEE. 5. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREFUL PERUSAL OF MATERIALS AVAILABLE ON RECORD, IT IS OBSERVED THAT THE ISSUE RAISED BY THE ASSESSEE IS COVERED BY EARLIER 3 ORDERS OF THIS TRIBUNAL IN THE CASE OF SMT.RITA DEV I AND OTHERS IN ITA NOS.22- 26/KOL/2011 DATED 14.07.2011. THE RELEVANT FINDINGS OF ORDER OF THIS TRIBUNAL IN PARA 6, 6.1. AND 7 ARE AS UNDER :- 6. ON COMPARISON OF THE ABOVE TABLE WITH THAT OF THE O NE WHICH WERE ANALYSED BY THE LD. CIT(A) AND THE SEBI REPORT WHICH WAS RECORDED IN TH E IMPUGNED ORDER BY THE LD. CIT(A), IT IS OBSERVED THAT THE SEBI HAS ANALYSED THE TRANS ACTIONS FOR THE PERIOD APRIL, 2005 TO NOVEMBER, 2005 IN RESPECT OF M/S. GL OBE STOCKS AND SECURITIES LTD. ONLY AND NOWHERE THEY HAVE MENTIONED IN RESPECT OF SHAR E TRANSACTIONS OF M/S.NIDHI TRADING CO. LTD. AND M/S. OFFSHORE FINVEST LTD.. BU T HOWEVER, IN THE CASE OF THE ASSESSES THE REVENUE HAS DISBELIEVED THE LONG TERM CAPITAL GAIN GAINED BY THE ASSESSEE AS WELL AS FAMILY MEMBERS OF THE ASSESSEE. IN RESPE CT OF M/S. NIDHI TRADING LTD. AND M/S. OFFSHORE FINVEST LTD ALONG WITH M/S.GLOBE STOC KS AND SECURITIES LTD. AS REGARDING M/S. GLOBE STOCKS AND SECURITIES LTD. ALS O THE PERIOD OF INVESTIGATION BY THE SEBI IS FOR THE PERIOD APRIL, 2005 TO NOVEMBER, 2005 WHEREAS THE ASSESSEE AND HER FAMILY MEMBERS HAS MADE THE TRANSACTIONS IN THE SHARES OF M/S. GLOBE STOCKS AND SECURITIES LTD. MUCH PRIOR TO APRIL, 2005 WHICH IS EVIDENT FROM THE ABOVE TABLE AS WELL AS THE LD. CIT(A)S ANALYSIS. FROM THIS FACT IT IS EVIDENT THAT THE OBSERVATIONS MADE BY THE LD. CIT(A) IN THE IMPUGNED ORDER AT PARA NOS. 4 .6 TO 4.10 ARE MISPLACED BY THE REVENUE. SINCE IN OUR CONSIDERED OPINION THE SEBI O N WHICH THE REVENUE PLACED RELIANCE IS NOT APPLICABLE TO THE FACTS OF THE PRES ENT CASE. ON THE OTHER HAND, THE UNDISPUTED FACTS WHICH WAS ADMITTED BY THE REVENUE ARE THAT THE ASSESSEE HAS SUBMITTED THE REQUISITE DETAILS AND EVIDENCES INCLU DING COPIES OF CONTRACT NOTES, DEMAT ACCOUNT, BANK STATEMENTS ETC. WHICH WAS FILED BEFORE THE AO TO SUBSTANTIATE THE GENUINENESS OF THE LONG TERM CAPITAL GAIN WHICH WAS DIS-REGARDED BY THE AO SIMPLY BASED ON THE STATEMENT OF SHRI ARUN KHEMKA AND SHRI SUBHASH CHANDRA AGARWALA (WHICH WERE SUBSEQUENTLY RETRACTED BY THEM) BY LINK ING WITH THE SEBIS REPORT (WHICH IS NOT RELEVANT IN OUR OPINION). IT IS FURTHER OBSE RVED THAT THE REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO THE EFFECT THAT NEITHER T HE ASSESSEE NOR THE FAMILY MEMBERS OF THE ASSESSEE ARE RESPONSIBLE FOR INFLATION/DEFLA TION OF THE SHARE MARKET WHICH IS EVIDENT FROM THE SHARE TRANSACTIONS RECORDED IN THE CALCUTTA STOCK EXCHANGE SUBMITTED BY THE ASSESSEE IN THE PAPER BOOK. IT IS FURTHER OBSERVED THAT THE AO HAS SIMPLY ADDED THE LONG TERM CAPITAL GAIN AND 2% ON A CCOUNT OF COMMISSION IGNORING THE EVIDENCES WHICH WAS ALREADY AVAILABLE WITH THE REVENUE AUTHORITIES. 6.1. KEEPING IN VIEW OF THE ABOVE FACTS WE ARE OF THE CONSIDERED VIEW THAT THE RATIO LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF SUMATI DAYAL VS CIT (SUPRA) ON WHICH THE REVENUE HAS RELIED IS NOT AT ALL APPLICAB LE TO THE PRESENT FACTS. THEREFORE WE SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES CON SIDERING THAT ALL THE TRANSACTIONS MADE BY THESE ASSESSES ARE GENUINE AND SUPPORTED BY DOCUMENTARY EVIDENCES. ON THE OTHER HAND, THE REVENUES PRESUMPTION IS BASED ON S USPICION, CAPRICIOUS AND PROBABILITIES AND WITHOUT ANY CONTRADICTORY MATERIA L AGAINST THE ONE SUBMITTED BY THE ASSESSEE IN RESPECT OF GENUINENESS OF THE TRANSACTI ONS. 7. IN THE RESULT THE APPEALS OF THE ASSESSES ARE AL LOWED. 5.1. RESPECTFULLY FOLLOWING THE SAME WE ALLOW BOTH THE APPEALS OF THE ASSESEE. 4 6. IN THE RESULT THE APPEALS OF THE ASSESSEE ARE ALLOWED. 4 5 %64 ' 7 89 :' 8' ;< ORDER PRONOUNCED IN THE OPEN COURT ON 09.01.2012. SD/- SD/- , ,, , MAHAVIR SINGH, JUDICIAL MEMBER . .. . ! ! ! !. .. . , , , , '# '# '# '# , C.D.RAO, ACCOUNTANT MEMBER. ( (( (!# !# !# !#) )) ) DATE: 09.01.2012. R.G.(P.S.) '3 . ,= >'='5- COPY OF THE ORDER FORWARDED TO: 1. SHRI SHANKARLAL AGARWALLA, F-3, CIRCULAR MANSION, 2 22, A.J.C.BOSE ROAD, KOLKATA-700017. 2 M/S.SHANKARLAL AGARWALLA (HUF), F-3, CIRCULAR MANSI ON, 222, A.J.C.BOSE ROAD, KOLKATA-700017. 3. THE A.C.I.T., CENTRAL CIRCLE-VI, KOLKATA. 4. CIT 5. THE CIT(A)-VI, KOLKATA. DR, KOLKATA BENCHES, KOLKATA -= ,/ TRUE COPY, '3%0/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES