Mrs. Parul Goyal, Agra V. I.T.O.-1(3), Agra

ITA 128/AGR/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7014 (ITAT-AGRA)
• Duration Of Justice: 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 20-05-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 05-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Assessee Lawyers: P K SEHGAL
• Keywords: Income from undisclosed sources; Principle of natural justice
• Section: 142(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA(SMC) BENCH, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 128/AGRA/2011 ASSTT. YEAR : 2001-02 MRS. PARUL GOYAL, VS. INCOME-TAX OFFICER, 54, GANDHI NAGAR, AGRA. 1(3), AGRA. (PAN ABPPG 1159 E) (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI P.K. SEHGAL, ADVOCATE FOR RESPONDENT : SHRI A.K. SHARMA, JR. D.R. ORDER THE ASSESSEE HAS FILED THIS APPEAL AGAINST THE OR DER DATED 10.01.2011 OF THE LEARNED CIT(A)-I, AGRA RELATING TO THE ASSESSMENT Y EAR 2001-02. 2. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE STATED THAT HE IS NOT PRESSING GROUNDS NOS. 1 TO 5 AND THE SAME MAY B E DISMISSED. HE HAS ALSO ENDORSED THE SAME ON THE ORIGINAL GROUNDS OF APPEAL . ON THE CONTRARY, THE LEARNED DR HAS NOT RAISED ANY OBJECTION ON THE REQUEST OF T HE LD. COUNSEL FOR THE ASSESSEE. KEEPING IN VIEW THE STATEMENT MADE BY THE LD. COUNS EL FOR THE ASSESSEE FOR NOT PRESSING THE ISSUE INVOLVED IN GROUNDS NOS. 1 TO 5, I.E., LEGAL ISSUE, I AM NOT ADJUDICATING THE LEGAL ISSUE RAISED BY THE ASSESSEE IN GROUNDS NOS. 1 TO 5. HENCE, THE SAME ARE DISMISSED. 2 3. THE REMAINING GROUNDS RAISED BY ASSESSEE READ AS UNDER : 6. THAT THE LEARNED CIT(A)-I, AGRA HAS BEEN ARBITR ARY AND UNJUST IN SUSTAINING THE ADDITION OF RS.2,77,764/- MADE BY THE AO TOWARDS ALLEGED FICTITIOUS SALE OF SHARE TRANSACTIO NS TREATED AS UNEXPLAINED INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES, THOUGH NO SALE OF SHARES WERE AT ALL MADE BY THE ASSESSEE DURING THE YEAR UNDER APPEAL. 7. THAT AS THE ASSESSEE DOES NOT MAINTAIN ANY BOOK S OF ACCOUNT THUS PROVISIONS OF SECTION 68 OF IT ACT, 19 61 HAVE BEEN MISAPPLIED OVER HER CASE. 8. THAT THE AUTHORITIES BELOW HAVE FURTHER ERRED B OTH IN LAW AND ON FACTS IN ADDING RS.2,777/- TOWARDS UNEXPLAIN ED COMMISSION AND EXPENSES ON SALE OF SHARES WITHOUT ANY MATERIAL AND BASIS IN SUPPORT THEREOF. 9. THAT THE AUTHORITIES BELOW HAVE FURTHER ERRED B OTH IN LAW AND ON FACTS IN SUBSTITUTING THE INCOME OF RS.1,50, 000 IN PLACE OF RETURNED INCOME OF RS.1,30,041/-. 10. THAT THE ASSESSEE WAS DENIED PROPER OPPORTUNIT Y TO DEFEND HER CASE PROPERLY AND JUDICIOUSLY. 11. THAT THE ORDER (S) PASSED BY THE AUTHORITIES B ELOW ARE BAD IN LAW, AS THESE ARE BASED ON CONJECTURES, SURM ISES AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 12. THAT THE APPELLATE ORDER DATED 10 TH JANUARY, 20011 PASSED BY THE LEARNED CIT(A)-I, AGRA IS AGAINST THE LAW AND FACTS OF THE CASE. 4. AS REGARDS TO THE THREE ADDITIONS INVOLVED IN GR OUNDS NOS. 6 TO 9, THE BRIEF FACTS ARE THAT THE ASSESSING OFFICER REOPENED THE C ASE OF THE ASSESSEE BY ISSUING 3 NOTICE U/S. 148 OF THE INCOME-TAX ACT (HEREINAFTER REFERRED TO AS THE ACT). THE ASSESSING OFFICER FOUND DURING THE COURSE OF ASSESS MENT THAT M/S. FRIENDS PORTFOLIO, NEW DELHI (SHARE BROKER) HAS PROVIDED BO GUS ENTRIES OF THE SALE PROCEEDS OF THE SHARES THROUGH BANK ACCOUNT. HE ALSO FOUND T HAT ACTUALLY NOT GENUINE TRANSACTIONS OF PURCHASE AND SALE OF SHARES HAVE TA KEN PLACE AND THE ASSESSEE HAS SHOWN THE RECEIPT UNDER THE HEAD CAPITAL GAIN ON FICTITIOUS SALE OF SHARES WHICH WAS ACTUALLY HER ESCAPED INCOME FROM UNDISCLOSED SO URCES WHICH RESULTED INTO ESCAPING ASSESSMENT IN THE HANDS OF THE ASSESSEE. H E ISSUED NOTICE U/S. 148 DATED 20.02.2006 AND NOTICE U/S. 142(1) AND 131 TO THE AS SESSEE BUT NO COMPLIANCE WAS MADE BY THE ASSESSEE. ACCORDING TO THE ASSESSING OF FICER, WHEN THE ASSESSEE DID NOT GIVE ANY INFORMATION OR RETURN OF INCOME REQUIR ED FOR THE ASSESSMENT YEAR IN DISPUTE, HE ALLOWED THE LAST OPPORTUNITY TO THE ASS ESSEE BY ISSUING A NOTICE U/S. 142(1) DATED 16.11.2006 SENT ALONG WITH SHOW CAUSE NOTICE U/S. 143(2) READ WITH SECTION 142(1) DATED 16.11.2006 REQUIRING THE ASSES SEE AS TO WHY THE ABOVE RECEIPT MAY NOT BE TAKEN TO BE THE UNEXPLAINED INCOME FROM UNDISCLOSED SOURCES IN ABSENCE OF ANY DETAILS AND EVIDENCE. LASTLY, THE AS SESSING OFFICER COMPLETED THE ASSESSMENT EXPARTE U/S. 144 AS THE CASE WAS GETTING TIME BARRED AND ESTIMATED THE INCOME OF ASSESSEE FROM UNDISCLOSED SOURCES AT RS.1 ,50,000/-. THE ASSESSING OFFICER ALSO ADDED RS.2,77,764/- ON ACCOUNT OF FICT ITIOUS SALE OF SHARES TRANSACTION TREATED AS UNEXPLAINED INCOME OF ASSESSEE FROM UNDI SCLOSED SOURCES AND 1% AS 4 COMMISSIONER AND EXPENSES OF RS.2777/- ON RS.2,77, 764/- AND COMPLETED THE ASSESSMENT ON THE TOTAL INCOME OF RS.4,30,540/- VID E ORDER DATED 07.12.2006 U/S. 144/147 OF THE ACT. AGGRIEVED BY THE SAME, THE ASSE SSEE FILED APPEAL BEFORE THE LEARNED FIRST APPELLATE AUTHORITY WHO VIDE IMPUGNED ORDER DATED 10.01.2011 DISMISSED THE APPEAL OF THE ASSESSEE BY UPHOLDING T HE ORDER DATED 07.12.200 PASSED BY THE ASSESSING OFFICER. NOW, THE ASSESSEE IS AGGR IEVED BY THE IMPUGNED AND HAS FILED THIS APPEAL BEFORE ME. 5. AS REGARDS TO THE ADDITION OF RS.2,77,764/- AND COMMISSION AND EXPENSES THEREON @ 1%, THE LD. COUNSEL FOR THE ASSESSEE ARGU ED THAT THE ASSESSING OFFICER AS WELL AS THE FIRST APPELLATE AUTHORITY HAS NOT GIVEN FULL OPPORTUNITY TO THE ASSESSEE FOR SUBSTANTIATING THE CLAIM OF THE ASSESSEE AND TH EY DECIDED THE ISSUE IN DISPUTE AGAINST THE ASSESSEE WITHOUT PERUSING THE EVIDENCE PRODUCED BY THE ASSESSEE BEFORE THEM. HE STATED THAT THE LEARNED FIRST APPELLATE AU THORITY ALSO UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER WITHOUT EVEN PERUSING THE EVIDENCE PRODUCED BEFORE HIM, WHICH IS CONTRARY TO THE LAW AND FACTS ON THE FILE AND THE SAME DESERVES TO BE CANCELLED. HE FURTHER STATED THAT THE ASSESSE E HAS FILED VARIOUS DOCUMENTARY EVIDENCE BEFORE THE REVENUE AUTHORITIES AND THE SAM E HE HAS FILED BEFORE ME IN THE SHAPE OF PAPER BOOK WHICH CONTAINED PAGE NOS. 1 TO 16 IN WHICH HE HAS ATTACHED COPY OF COMPUTATION OF TOTAL INCOME RELEVA NT TO A.Y. 2000-01 AND 2001- 02, COPY OF BILL AND CONTRACT NOTE OF M/S. FRIENDS PORTFOLIO PVT. LTD., MEMBER OF 5 DELHI STOCK EXCHANGE ASSOCIATION LTD. REGARDING SAL E OF 10000 SHARES OF B.S. HOLDING & CREDIT LTD. ON BEHALF OF THE ASSESSEE ON 24.01.2000, DETAILS REGARDING SALE OF SHARES OF B.S. HOLDING & CREDIT LTD., COPY OF BILL AND CONTRACT NOTE OF M/S. JRD STOCK BROKERS PVT. LTD REGARDING SALE OF 10000 SHARES OF B.S. HOLDING & CREDIT LTD. ON BEHALF OF THE ASSESSEE ON 20/28.01.2 000, DETAILS REGARDING SHALE OF SHARES OF B.S. HOLDING & CREDIT LTD., COPY OF INTIM ATION U/S. 143(1)(A) OF THE ACT RELEVANT TO A.Y. 1999-2000 AND COPY OF ASSESSEES S B A/C NO. 3680 WITH BANK OF MAHARASTHRA, AGRA WHICH WAS FILED ALONG WITH THE RE TURN OF INCOME FOR A.Y. 1999- 2000, 2000-01 AND 2001-02. THE ASSESSEE HAS ALSO CE RTIFIED THAT THE AFORESAID DOCUMENTS LISTED AT SL. NO. 1 TO 16 ARE AVAILABLE O N RECORDS WITH THE ASSESSING OFFICER AND HAVE BEEN COMPILED THEREFROM. HE DREW M Y ATTENTION TOWARDS EACH AND EVERY DOCUMENT TO PROVE THAT THE ASSESSEE HAS SHOWN LONG-TERM CAPITAL GAIN ON ACCOUNT OF SALE OF SHARES IN DISPUTE IN THE RETURN FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2000-01 AND ALSO PAID TAX ON THE SA ME. HE HAS ALSO FILED A COPY OF ACKNOWLEDGEMENT REGARDING RECEIPTS OF SHARES BY FRI ENDS PORTFOLIO PVT. LTD., WHICH IS AT PAGE NO. 5 TO 7 OF THE PAPER BOOKS HE A LSO ARGUED THAT 10000 SHARES WERE SOLD THROUGH M/S. FRIENDS PORTFOLIO PVT. LTD. (BROKER), THE MEMBER OF DELHI STOCK EXCHANGE ASSOCIATION ON 24.01.2000 FOR RS.7,7 8,400/-, BUT THE PAYMENT OF THE SAME THE ASSESSEE HAS RECEIVED ON 08.04.2000 AM OUNTING TO RS.2,99,400/- BY ACCOUNT PAYEE DRAFT OF SB A/C NO. 3680 WITH BANK OF MAHARASHTRA, ON 08.04.200 6 AMOUNTING TO RS.1,99,600/- AND ON 04.07.2000 AMOUNT ING TO RS.2,77,764/-. THE ASSESSEE HAS RECEIVED THESE PAYMENTS BY ACCOUNT PAY EE DRAFTS IN THE ACCOUNT OF THE ASSESSEE. THE TOTAL AMOUNT IS RS.7,76,764/-. THE LD . COUNSEL ALSO SUBMITTED THAT KEEPING IN VIEW ALL THESE DOCUMENTARY EVIDENCE, THE ASSESSEE HAD NOT DONE ANY DEALING IN THE SALE OF SHARES DURING THE ASSESSMENT YEAR IN DISPUTE. THEREFORE, TREATING THE AMOUNT OF RS.2,77,764/- AS A PART OF S ALE OF A.Y. 2001-02 ON WHICH TAX HAS ALREADY BEEN PAID ON ACCOUNT OF CAPITAL GAIN IN THE ASSESSMENT YEAR 2000-01, IS CONTRARY TO THE RELEVANT RECORD AVAILABLE WITH THE REVENUE AUTHORITIES. HE FURTHER STATED THAT THE ASSESSEE HAS NOT DONE ANY DEALING O F PURCHASE AND SALE IN THE ASSESSMENT YEAR IN DISPUTE. THEREFORE, THERE WAS NO LONG TERM CAPITAL GAIN ARISEN BECAUSE THE SALE PROCEEDS OF 10,000/- SHARES HAS AL READY BEEN DECLARED BY THE ASSESSEE IN THE FINANCIAL YEAR 1999-2000 RELEVANT T O THE A.Y. 2000-01. 6. AS REGARDS TO THE ADDITION OF RS.1,50,000/- IN P LACE OF RETURNED INCOME OF RS.1,30,041/-, MADE BY THE ASSESSING OFFICER AND CO NFIRMED BY THE FIRST APPELLATE AUTHORITY, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT INSPITE OF NECESSARY EVIDENCE AVAILABLE WITH THE ASSESSING OFFICER AS WELL AS THE LEARNED FIRST APPELLATE AUTHORITY, THE DIFFERENCE OF INCOME BETWEEN THE DECLARED BY TH E ASSESSEE AMOUNTING TO RS.1,30,041/- AND ASSESSED BY THE ASSESSING OFFICER AMOUNTING TO RS.1,50,000/- IS CONTRARY TO THE RECORD. HE REQUESTED THAT THE RETUR NED INCOME DECLARED BY THE ASSESSEE OF RS.1,30,041/- MAY BE SUSTAINED AND THE REMAINING MAY BE DELETED. 7 7. ON THE CONTRARY, THE LEARNED DR RELIED ON THE OR DER PASSED BY THE LEARNED FIRST APPELLATE AUTHORITY AND STATED THAT THE ASSES SEE REMAINED NON-COOPERATIVE BEFORE THE ASSESSING OFFICER AS WELL AS LEARNED FIR ST APPELLATE AUTHORITY. THEREFORE, THE IMPUGNED ORDER MAY BE UPHELD. 8. I HAVE HEARD THE BOTH PARTIES AND PERUSED THE RE LEVANT RECORD AVAILABLE WITH ME AND I AM OF THE CONSIDERED OPINION THAT THE ASSE SSEE HAS FILED ALL DOCUMENTARY EVIDENCE WHICH SHE HAD FILED IN THE SHAPE OF PAPER BOOK CONTAINING PAGES NOS. 1 TO 16 CERTIFYING THAT THE DOCUMENTS LISTED THEREIN ARE AVAILABLE ON RECORD WITH THE ASSESSING OFFICER. AS FAR AS THESE DOCUMENTARY EVID ENCES ARE CONCERNED, THE ASSESSEE HAS FILED COMPUTATION OF INCOME FOR THE AS SESSMENT YEAR 2001-02 AT PAGE 1 OF THE PAPER BOOK IN WHICH THE ASSESSEE HAS SHOWN INCOME FROM OTHER SOURCES AND DECLARED TOTAL INCOME OF RS.1,30,040/- FOR THE ASSESSMENT YEAR IN DISPUTE. BUT THE ASSESSING OFFICER HAS MADE ADDITION ON ESTIMATI ON BASIS AND ENHANCED THE SAME TO RS.1,50,000/- BECAUSE THE ASSESSEE HAS NOT FILED ANY EVIDENCE SUPPORTING THE CLAIM SHOWN IN THE RETURN OF INCOME. THE ASSESS ING OFFICER MADE THE ADDITION OF RS.19,960/- (RS. 1,50,000 RS.1,30,040/-. IT IS ADMITTED FACT THAT THE ASSESSING OFFICER HAS GIVEN VARIOUS OPPORTUNITIES TO THE ASSE SSEE TO ESTABLISH THE CLAIM MADE IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR IN DISPUTE. BUT THE ASSESSEE HAS NOT AVAILED THE SAME. THEREFORE, THE ADDITION OF RS.19, 960/- HAS BEEN MADE ON 8 ESTIMATION BASIS. IT IS ALSO ADMITTED FACT THAT THE ASSESSEE HAS FILED DOCUMENTARY EVIDENCE ALONGWITH RETURN SUPPORTING HER CLAIM BUT SHE DID NOT APPEAR BEFORE THE ASSESSING OFFICER. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE SHORT TIME GIVEN BY THE ASSESSING OFFICER TO TH E ASSESSEE, I AM OF THE CONSIDERED OPINION THAT IT WOULD BE VERY MUCH FAR I F THE ADDITION OF RS.10,000/- IS MADE IN THE INCOME OF RS.1,30,040/- DECLARED BY THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO ASSESS THE INCOME OF ASSESSEE AT RS.1,40,000/- AND TAX ACCORDINGLY. 9. AS REGARDS TO THE NEXT ADDITION OF RS.2,77,764/- AND RS.27,776/- ON ACCOUNT OF 1% OF COMMISSION AND EXPENSES ON THE FICTITIOUS SALE OF SHARE TRANSACTIONS TREATED AS UNEXPLAINED INCOME OF ASSESSEE FROM UNDI SCLOSED SOURCE, I AM OF THE CONSIDERED OPINION THAT AS PER RECORD AVAILABLE WIT H ME, THE AMOUNT OF RS.2,77,764/- REPRESENTS PART SALE PROCEEDS OF 10,0 00 SHARES RECEIVED FROM FRIENDS PORTFOLIO PVT. LTD. IN ASSESSEES SB A/C NO. 3680 W ITH BANK OF MAHARASHTRA, WHICH WERE SOLD ON 24.01.2000, I.E., DURING THE FINANCIAL YEAR 1999-2000 RELEVANT TO ASSESSMENT YEAR 2000-01. IT IS ALSO THE MATTER OF R ECORD THAT THE AMOUNT OF RS.7,76,764/- WERE CREDITED IN ASSESSEES BANK ACCO UNT DURING THE FINANCIAL YEAR 2000-01 RELEVANT TO A.Y. 2001-02, THE DETAILS OF TH E SAME ARE AS UNDER : DATE MODE AMOUNT REMARK 08.04.2000 A/C PAYEE BANK DRAFT 2,99,400 S.B. A/C N O.3680 WITH 9 BANK OF MAHARASHTRA 08.04.2000 A/C PAYEE BANK DRAFT 1,99,600 S.B. A/C N O.3680 WITH BANK OF MAHARASHTRA 04.07.2000 A/C PAYEE BANK DRAFT 2,77,764 S.B. A/C N O.3680 WITH BANK OF MAHARASHTRA ------------ 7,76,764 ------------ AS PER PAGE 2 TO 4 OF ASSESSEES PAPER BOOK IN WHIC H THE ASSESSEE HAS SHOWN INCOME TAX COMPUTATION WHEREIN THE SALE OF 1000 SHA RES AND LONG-TERM CAPITAL GAINS THEREON WAS DECLARED AND EVEN INCLUDED BY THE ASSESSEE IN HER RETURN OF INCOME RELEVANT TO ASSESSMENT YEAR 2000-01 AND THE ASSESSEE HAS PAID TAX ON THE SAID LONG-TERM CAPITAL GAIN OF RS.17,34,276/-. THE ASSESSEE DID NOT SELL ANY SHARE DURING THE ASSESSMENT YEAR IN DISPUTE THROUGH THE B ROKER M/S. FRIENDS PORTFOLIO PVT. LTD. OR THROUGH ANYONE ELSE FOR RS.2,77,764/- OR ANY LONG-TERM CAPITAL GAIN THEREON. AS DISCUSSED ABOVE, THEE IS NO DOUBT THAT THE ASSESSEE HAS RECEIVED SALE PROCEEDS OF RS.7,76,764/- ON 08.04.2000 AND 04.07.2 000 BY ACCOUNT PAYEE DRAFTS CREDITED IN HER SB ACCOUNT WITH BANK OF MAHARASHTRA . IT IS VERY CLEAR THAT NO LONG TERM CAPITAL GAIN HAS ARISEN IN THE ASSESSMENT YEAR 2001-02 BECAUSE RS.2,77,764/- BEING PART OF THE SALE PROCEEDS OF THE SHARES SOLD IN A.Y. 2000-01 AND THE CAPITAL GAIN ARISEN ON WHICH WAS DULY DECLARED IN THE RETUR N FOR THE ASSESSMENT YEAR 2000- 01 AND PAYMENT OF TAX THEREON WAS ALSO MADE BY ASSE SSEE. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES EXPLAINED ABOVE WITH THE HE LP OF DOCUMENTARY EVIDENCE 10 FILED BY THE ASSESSEE, I AM OF THE CONSIDERED OPINI ON THAT ADDITION OF RS.2,77,764/- AND COMMISSION @ 1% THEREON DESERVES TO BE CANCELLE D AND I CANCEL THE SAME BY DELETING THE ADDITION OF RS.2,77,764/- AND RS.27,77 6/-. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.05.2011. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED: 31 ST MAY, 2011 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY