ACIT, New Delhi V. Mr Shri Ram Goel, New Delhi

ITA 1464/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77655 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 01-04-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 28-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Share purchase agreement; Additional evidence; Cost of acquisition; Accommodation entries; Reassessment proceedings
• Section: 131; 68; 148

Judgement Text

ITA NO. 1464/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL NEW NEW NEW NEW DELHI BENCH DELHI BENCH DELHI BENCH DELHI BENCHES ESES ES G GG G , , , , NEW DELHI NEW DELHI NEW DELHI NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI S.V. MEHROTRA, S.V. MEHROTRA, S.V. MEHROTRA, S.V. MEHROTRA, ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER AND AND AND AND SHRI SHRI SHRI SHRI JOGINDER SINGH, JUDICIAL JOGINDER SINGH, JUDICIAL JOGINDER SINGH, JUDICIAL JOGINDER SINGH, JUDICIAL MEMBER MEMBER MEMBER MEMBER I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO. 1464 1464 1464 1464/DEL/20 /DEL/20 /DEL/20 /DEL/2012 1212 12 A.Y. : A.Y. : A.Y. : A.Y. : 2003 2003 2003 2003- -- -04 0404 04 ACIT, CENTRAL ACIT, CENTRAL ACIT, CENTRAL ACIT, CENTRAL CIRCLE CIRCLE CIRCLE CIRCLE- -- -I, I, I, I, ROOM NO. 322, ROOM NO. 322, ROOM NO. 322, ROOM NO. 322, 3 33 3 RD RDRD RD FLOOR, ARA FLOOR, ARA FLOOR, ARA FLOOR, ARA CENTRE, CENTRE, CENTRE, CENTRE, JHANDEWALAN, JHANDEWALAN, JHANDEWALAN, JHANDEWALAN, EXTN., EXTN., EXTN., EXTN., NEW DELHI NEW DELHI NEW DELHI NEW DELHI VS. VS. VS. VS. MR. SHRI RAM GOEL, MR. SHRI RAM GOEL, MR. SHRI RAM GOEL, MR. SHRI RAM GOEL, PP PPPP PP- -- -1, MAURYA 1, MAURYA 1, MAURYA 1, MAURYA ENCLAVE, ENCLAVE, ENCLAVE, ENCLAVE, PITAMPURA, PITAMPURA, PITAMPURA, PITAMPURA, NEW DELHI NEW DELHI NEW DELHI NEW DELHI (PAN: AAEPG7983Q) (PAN: AAEPG7983Q) (PAN: AAEPG7983Q) (PAN: AAEPG7983Q) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT BY BYBY BY : :: : SMT. RENUKA JAIN GUPTA, SMT. RENUKA JAIN GUPTA, SMT. RENUKA JAIN GUPTA, SMT. RENUKA JAIN GUPTA, CIT(DR) CIT(DR) CIT(DR) CIT(DR) ASSESSEE ASSESSEE ASSESSEE ASSESSEE BY BYBY BY : : : : SH. ARUN NARESH, CA SH. ARUN NARESH, CA SH. ARUN NARESH, CA SH. ARUN NARESH, CA DATE OF HEARING : 01-4-2014 DATE OF PRONOUNCEMENT : 11-4-2014 ORDER ORDER ORDER ORDER PER PER PER PER JOGINDER SINGH : J JOGINDER SINGH : J JOGINDER SINGH : J JOGINDER SINGH : JM MM M THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS-III, NEW DELHI DATED 06.1.2012 PERTAINING TO ASSESSMENT YEAR 2003- 04. 2. THE FIRST GROUND RAISED BY THE REVENUE PERTAINS TO HOLDING THE INITIATION OF PROCEEDINGS U/S. 147/148 OF THE A CT AS INVALID IN EYES OF LAW. THE CRUX OF ARGUMENTS ON BEHALF OF TH E REVENUE ADVANCED BY SMT. RENUKA JAIN GUPTA, CIT(DR) IS THAT REASONS ITA NO. 1464/DEL/2012 2 WERE SUPPLIED BY THE ITO CONSEQUENTLY, ONUS WAS DIS CHARGED. RELIANCE WAS PLACED UPON THE DECISION IN ACIT VS. RAJESH JHAVERI ACIT VS. RAJESH JHAVERI ACIT VS. RAJESH JHAVERI ACIT VS. RAJESH JHAVERI STOCK BROKERS P LTD. STOCK BROKERS P LTD. STOCK BROKERS P LTD. STOCK BROKERS P LTD. ( (( (291 ITR 500 291 ITR 500 291 ITR 500 291 ITR 500) )) ) [ [[ [SC SCSC SC] ]] ]. .. . IT WAS PLEADED THAT NO OPPORTUNITY WAS GRANTED TO THE ASSESSEE, THEREFORE, THERE IS NO REASON TO DECIDE THIS ISSUE AGAINST THE REVENUE. 2.1 ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE SH. ARUN NARESH DEFENDED THE STAND OF THE LD. CIT(A). OUR A TTENTION WAS INVITED TO PAGE 66 OF THE PB AND REPLY OF THE A SSESSEE ANNEXED AT PAGES 71 TO 85. IT WAS ALSO SUBMITTED T HAT THE AMOUNT IS NOT APPEARING IN THE PASS BOOK AND THE HO NBLE DELHI HIGH COURT IN THE CASE OF M/S VISHAL HOLDINGS AND C APITAL PVT. LTD. (ITA 1031/2010 ORDER DATED 9.8.2010) HAS HELD THAT TRANSACTION OF MKM FINANCE PVT. LTD. ARE GENUINE. IT WAS ALSO PLEADED THAT THE COMPANY IS A MEMBER OF DELHI STOCK EXCHANGE. RELIANCE WAS PLACED UPON THE DECISION IN ITO VS. M/S MKM FINSEC PVT. LTD. (ITA NO. 4021/DELL/2009), CIT VS. M/S VISHAL HOLDINGS AND CAPITAL PVT. LTD. (SUPRA). IN REPLY, IT WAS ASSERTED BY THE LD. CIT(DR) THAT THE ASSESSEE IS CO LORING THE SAME AS SALE TRANSACTION AND ONUS IS STILL ON THE A SSESSEE. IT WAS FURTHER PLEADED THAT BEFORE ARRIVING TO A DECI SION THE LD. CIT(A) SHOULD HAVE CONDUCTED ENQUIRIES AND ONCE THE LD. CIT(A) STEP IN TO THE SHOES OF THE AO, THEN HE SHOULD HAVE MADE INDEPENDENT ENQUIRY/ INVESTIGATION. RELIANCE WAS P LACED UPON THE DECISION IN SRI KRISHNA PVT LTD. ETC. VS. ITO ( 221 ITR 538) [SC], RAJAT EXPORTS IMPORTS INDIA P LTD. VS. ITO (2 012) 341 ITR 135 (DEL.) AND KALYAN MAVJI & CO. VS. CIT (102 ITR 287) [SC]. 2.2 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIE F ARE THAT THE ITA NO. 1464/DEL/2012 3 ASSESSEE FILED ORIGINAL RETURN ON 12.12.2003 DECLA RING NET TAXABLE INCOME OF RS. 2,30,075/-. SUBSEQUENTLY, IT WAS CAME TO THE NOTICE OF THE DEPARTMENT THAT ASSESSEE HAS RECE IVED A SUM OF RS. 7,50,500/- FROM M/S MKM FINSEC P LTD. THE INVESTIGATION WING OF THE DEPARTMENT CONDUCTED INVESTIGATION AND FOUND THAT M/S MKM FINSEC P LTD. IS INVOLVED IN PROVIDING ACCO MMODATION ENTRIES. AS PER THE REVENUE THE COMPANY WAS FOUND INVOLVED IN GIVING ACCOMMODATION ENTRIES UNDER THE GARB OF P ROFIT FROM SALE TRANSACTION IN LIEU OF CASH FROM BENEFICIARIES . ON RECEIPT OF THIS INFORMATION THE ASSESSMENT WAS RE-OPENED. AFTE R RECORDING THE REASONS A NOTICE U/S. 148 WAS SERVED UPON THE A SSESSEE ON 28.3.2010 AS PER WHICH THE ASSESSEE WAS ASKED TO F ILE RETURN OF INCOME WITHIN 30 DAYS. HOWEVER, THE ASSESSEE DID NOT FILE THE SAME WITHIN THE STIPULATED PERIOD BUT ON 26.4.2 010 PREFERRED WRITTEN SUBMISSIONS CLAIMING THAT THE RET URN ALREADY FILED U/S 139(1) OF THE ACT MAY BE TREATED TO BE FI LED IN RESPONSE TO NOTICE ISSUED U/S. 148 WITH A FURTHER REQUEST TO PROVIDE THE COPY OF REASONS SO RECORDED. AFTER PR OVIDING REASONS PROCEEDINGS WERE INITIATED AND THUS NOTICE U/S. 143(2)/142(1) WAS SERVED UPON THE ASSESSEE. IN THE SAID NOTICES THE ASSESSEE WAS SPECIFICALLY ASKED TO SUBS TANTIATE HIS CLAIM FOR RECEIPT OF MONEY FROM M/S MKM FINSEC PVT . LTD. AND ALSO DIRECTED TO PRODUCE THE DIRECTOR OF THE SAID FIRM. IN REPLY, THE ASSESSEE CLAIMED THAT 1,29,000 SHARES OF KASTUR I FINLEASE AND INVESTMENT WERE SOLD THROUGH BROKER M/S MKM FIN SEC P LTD. FOR RS. 17,39,105/- RESULTING INTO LOSS OF RS. 2,45 ,644/- WHICH HAS BEEN CLAIMED TO BE DULY DECLARED IN THE RETURN. THE ASSESSEE ALSO FURNISHED CERTAIN DOCUMENTS LIKE COP Y OF ITA NO. 1464/DEL/2012 4 CONTRACT NOTE ALONGWITH COPY OF BILLS, COPY OF BANK STATEMENT OF THE RELEVANT PERIOD SHOWING RECEIPTS AND SALE PROCE EDS AND COPY OF ASSESSEES ACCOUNT IN THE BOOKS OF M/S MKM FINSEC PVT. LTD. FOR THE RELEVANT PERIOD IN SUPPORT OF SALE OF SUCH SHARES. THE ASSESSEE AGAIN FILED REPLY ON 22.9.2010. THE C RUX OF THE REPLY ON BEHALF OF THE ASSESSEE WAS THAT HE SOLD TH E SHARES AND IN LIEU THEREOF RECEIVED CHEQUE FROM M/S MKM FINSEC P LTD. THE DEPARTMENT WAS OF THE VIEW THAT THE ASSESSEE DID N OT FURNISH ANY DOCUMENT FROM WHICH OWNERSHIP OF THE SHARES IT S ACTUAL TRADING CAN BE VERIFIED AND SINCE THE DIRECTOR OF M /S MKM FINSEC PVT. LTD. WAS NOT PRODUCED, THERE WAS OBLIGATION U/ S 68 OF THE ACT UPON THE ASSESSEE TO EXPLAIN THE AMOUNT. THE AM OUNT OF RS. 17,49,105/- WAS TREATED AS INCOME FROM UNDISCLO SED SOURCES. 2.3 WE HAVE PERUSED THE REASONS RECORDED BY THE OFF ICER. WE HAVE ALSO NOTED THE FACTUAL FINDING RECORDED BY TH E LD. CIT(A) ALONGWITH THE EXPLANATION OFFERED BY THE ASSESSEE B EFORE HIM AS WELL AS BEFORE US. BEFORE US, IT HAS BEEN CLAIM ED THAT THE AMOUNT OF RS. 7,50,500/- AS CLAIMED TO BE RECEIVED FROM M/S MKM FINSEC PVT. LTD. IS FACTUALLY INCORRECT. THUS, WE ARE IN AGREEMENT WITH THE FACTUAL FINDING RECORDED BY THE LD. CIT(A) THAT NO SUCH AMOUNT HAS BEEN RECEIVED, EITHER FROM M/S MKM FINSEC P LTD. OR FROM ANY OTHER PERSON IN BANK ACC OUNT NO. 11176 MAINTAINED WITH OBC ON OR AFTER 11.3.2003 AND TILL 31.3.2003. IN VIEW OF THIS FACT, THERE WAS NO MA TERIAL ON RECORD TO COME TO THE BELIEF THAT ASSESSEE IN FACT RECEIVED MONEY FROM M/S MKM FINSEC. PVT. LTD. WHICH WAS NOT FOUND TO BE GENUINE. IT SEEMS THAT SUCH BELIEF WAS ARRIVED A T ON ITA NO. 1464/DEL/2012 5 UNFOUNDED PRESUMPTION THAT LARGE SCALE TRANSACTIONS WERE DONE BY M/S MKM FINSEC PVT. LTD. AND THUS EVEN IT CANNOT BE SAID THAT EVEN PRIMA FACIE MATERIAL WAS AVAILABLE WITH THE AO ON THE BASIS OF WHICH HE COULD REASONABLY BELIEVE THA T INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT. IN SUCH A SITU ATION, WE ARE OF THE VIEW THAT WHERE EVEN THE BASIC INFORMATI ON WAS FOUND TO BE NON EXISTENT OR NATURE OF TRANSACTION I S NOT SPECIFIED IN THE NOTICE ISSUED UNDER SECTION 148 EV EN THE DAYS FOR ISSUANCE OF NOTICE U/S. 148 CANNOT BE STAND ON ITS LEGS. OUR VIEW FIND SUPPORT FROM THE DECISION OF THE TRIBUNAL IN ITO VS. LAKSHAYA EXIM PVT. LTD. (ITA 2328/DEL/2008); 40 DTR (DELHI) ITAT 396 (2010). HONBLE BOMBAY HIGH COURT IN HIND USTAN LIVER LIMITED 268 ITR 332 CONCLUDED THAT THE REASON S TO BELIEVE SHOULD BE ASSUMED TO BE FINAL AND THE AO SHOULD NO T GO BEYOND THAT. IT APPEARS THAT NO INDEPENDENT ENQUIR Y WAS MADE BY THE ITO, WARD 6(1), DELHI FROM THE ASSESSING OF FICER HAVING JURISDICTION WORK OF M/S MKM FINSEC P LTD. BEFORE I SSUANCE OF NOTICE U/S. 148 OF THE ACT. WE FURTHER NOTE THAT A SSESSMENT OF M/S MKM FINSEC WAS OPENED FOR ASSTT. YEAR 2000-01 U/S. 147/148 OF THE ACT WHERE THE AO OF THE FIRM RECORDE D THE STATEMENT ON OATH OF SH. PREM CHAND BATRA, PRINCIP AL OFFICER,/ DIRECTOR U/S. 131 ON 26.11.2007, DURING COURSE OF R EASSESSMENT PROCEEDINGS. THE RELEVANT EXTRACTS HAVE BEEN REDUCE D AT PAGE 11 ONWARDS OF THE IMPUGNED ORDER. WE FURTHER NOTE THAT NO MATERIAL HAS BEEN REFERRED IN THE NOTES SHEET OF TH E REASONS RECORDED. WE ARE OF THE VIEW THAT THERE SHOULD BE R ELATIONSHIP BETWEEN THE REASONS RECORDED AND TO ARRIVE AT BELIE F. ITA NO. 1464/DEL/2012 6 3. FOR ARRIVING AT A CONCLUSION FOR ISSUANCE OF NOT ICE U/S. 147/148 THERE SHOULD BE A REASON AND NOT REASON TO SUSPECT AND THUS THE BELIEF ENTERTAINED BY THE ASSESSING OF FICER MUST NOT BE ARBITRARY OR IRRATIONAL RATHER IT MUST BE REASONABLE SUBSTANTIATED BY REASON. IT MUST BE ON GOOD FAITH AND NOTE MERE BY PRETENCE AND THERE MUST BE RATIONAL AND LIV E CONNECTION WHILE FORMATION OF BELIEF. OUR VIEW IS FURTHER SUPPORTED BY THE DECISION FROM HONBLE JURISDICTION AL HIGH COURT TAKEN IN CIT VS. GULATI INDUSTRIAL FABRICATIO N LTD. (217 CTR 494 DELHI) AND UNITED ELECTRICAL CO. PVT. LTD. VS. CIT (258 ITR 317) [DEL] AND ALSO GKN DRIVE SHAFTS INDIA LTD. VS. ITO (259 ITR 19) [SC]. IN VIEW OF THE CLEAR FACTS AND THE JUDIC IAL PRONOUNCEMENT HEREINABOVE WE FIND NO MERIT IN THIS GROUND OF THE REVENUE AND UPHELD THE STAND OF THE LD. CIT( A). 4. THE NEXT GROUND PERTAINS TO DELETING THE ADDITIO N OF RS. 17,49,105/- MADE U/S. 68 OF THE ACT ON ACCOUNT OF A LLEGED UNEXPLAINED CASH CREDIT RECEIVED BY THE ASSESSEE. 5. ON PERUSAL OF RECORD, AND MORE SPECIFICALLY THE ASSESSMENT ORDER WE NOTE THAT THE ADDITION OF RS. 1 7,49,105/- WAS MADE BY THE LD. AO THAT THE ASSESSEE RECEIVED C HEQUE FROM M/S MKM FINSECT P LTD. IN LIEU OF CASH UNDER T HE GARB OF SHARE PROFIT AND FURTHER THE ASSESSEE FAILED TO FUR NISH THE COPY OF SHARE CERTIFICATE AND DID NOT SUBSTANTIATE THE V ALUE OF SHARES ON THE DATE OF SALE OF SUCH SHARES. ANOTHER REASON FOR MAKING THE ADDITION BY THE AO IS THAT THE DIRECTOR OF M/S MKM FINSEC PVT LTD. WAS NOT PRODUCED BEFORE HIM AND THUS THE OBLIGATION CAST UNDER SECTION 68 OF THE ACT WAS NOT DISCHARGED . WE FIND THAT VIDE LETTER DATED 7.9.2010 THE ASSESSEE FILED A REPLY ITA NO. 1464/DEL/2012 7 ANNEXING THE COPY OF THE CONTRACT NOTE AND BILLS, I SSUED BY M/S MKM FINSEC PVT. LTD., IN RESPECT OF 1,29,000/- EQUI TY SHARES OF M/S KASTURI FINLEASE AND INVESTMENT LTD., SOLD THRO UGH THE BROKER FOR WHICH THE PAYMENT OF RS. 17,39,105/- WAS RECEIVED. THERE IS NO DISPUTE TO THE FACT THAT THESE SHARES W ERE PURCHASED IN THE F.Y. 1994-95 AND WERE DULY REFLECT ED IN THE BALANCE SHEET OF THE ASSESSEE. THE COMPLETE DETAIL S OF CAPITAL GAIN / LOSS WAS ALSO DECLARED IN COMPUTATION OF IN COME BY THE ASSESSEE FOR ASSTT. YEAR 2003-04 ALONGWITH COMPLETE DETAIL OF COST OF ACQUISITION, YEAR OF ACQUISITION, INDEX COS T OF ACQUISITION AND SALE CONSIDERATION DULY SUPPORTED BY COPY OF BA NK STATEMENT. THE AMOUNT AND DATE ON WHICH THE ASSESS EE RECEIVED HAS BEEN DULY DETAILED AT PAGE 24 OF THE I MPUGNED ORDER. 5.1 IT IS NOT WORTHY, THAT DURING ASSESSMENT PROCEE DINGS THE ASSESSEE FILED FOLLOWING DOCUMENTS TO EXPLAIN THE N ATURE AND GENUINENESS OF THE TRANSACTION ALONGWITH THE IDENTI TY AND CREDITWORTHINESS OF M/S MKM FINSEC P LTD. : A) COPY OF CONTRACT NOTE AND BILLS ISSUED BY MKM FINANCE PVT. LTD. B) COPY OF ACKNOWLEDGEMENT ALONG WITH BALANCE SHEET OF THE ASSESSEE FOR THE FINANCIAL YEAR 1999-2000. C) COPY OF BANK STATEMENT OF ASSESSEE FOR THE FINAN CIAL YEAR 2002-03. D) COPY OF LEDGER ACCOUNT OF THE ASSESSEE FOR THE RELEVANT ASSTT. YEAR IN THE BOOKS OF ACCOUNT OF M/ S MKM FINANCE PVT. LTD. (SHARE BROKER). E) COPY OF ACKNOWLEDGEMENT OF INCOME TAX RETURN O F M/S MKM FINANCE PVT LTD. FOR THE A.Y. 2002-03 ALON G ITA NO. 1464/DEL/2012 8 WITH COPY OF AUDITED ANNUAL ACCOUNTS (BALANCE SHEET, PROFIT AND LOSS ACCOUNT WITH AUDITOR REPORT) . F) COPY OF ACKNOWLEDGEMENT OF INCOME TAX RETURN OF M/S MKM FINSEC PVT. LTD. FOR THE YEAR 2007-08 ALONGWITH COPY OF AUDITED ANNUAL ACCOUNTS (BALANCE SHEED, PROFIT AND LOSS ACCOUNT WITH AUDITOR REPORT. ) G) COPY OF STATEMENT DATED 26.11.2007 OF PREM CHAND BATRA, DIRECTOR AND PRINCIPAL OFFICER OF M/S MKM FINSEC P LTD. RECORDED U/S. 131 BY ITO, WARD 6(1), NEW DELHI. H) COPY OF ORDER DATED 31.7.2009 OF CIT(A)-IX IN TH E CASE OF M/S MKM FINANCE PVT. LTD., DELETING THE ADDITION MADE BY THE ITO FOR THE A.Y. 2000/01 U/S. 143(3)/147 OF I.T. ACT. 5.2 IN ADDITION TO ABOVE, ADDITIONAL DOCUMENTS WERE FILED DURING COURSE OF REASSESSMENT PROCEEDINGS AS HAS B EEN DISCUSSED AT PAGE 27 ONWARDS OF THE IMPUGNED ORDER, THEREFORE, ARE NOT BEING REPEATED HERE FOR THE SAKE OF BREVITY. 5.3 WE ARE IN FULL AGREEMENT WITH THE ARGUMENT OF T HE LD. CIT(DR) TO THE EXTENT THAT TO PROTECT THE SKIN FROM THE JAW OF SECTION 68, THE ASSESSEE HAS TO PROVE THE TH REE CONDITIONS LIKE IDENTITY OF THE CREDITORS, CREDIT W ORTHINESS AND GENUINENESS OF THE TRANSACTIONS. SO FAR AS THE IDENTITY OF THE CREDITOR IS CONCERNED, THE SAME HAS BEEN FOUND IN ORDER BY HONBLE DELHI HIGH COURT IN THE C ASE OF CIT VS. VISHAL HOLDINGS AND CAPITAL PVT LTD. (PAGE 197-199 OF THE PAPER BOOK). THE RELEVANT PORTION AS CONTAI NED IN PARA 4 OF THE ORDER IS REPRODUCED HEREUNDER:- THE REVENUE APPEALED AGAINST THE ORDER OF THE CIT(A). BY THE IMPUGNED ITA NO. 1464/DEL/2012 9 ORDER, ITAT DISMISSED THE REVENUES APPEAL BY OBSERVING THAT ASSESSEE HAD PRODUCED ALL DETAILS IN RESPECT OF ITS TRANSACTIONS INCLUDING COPIES OF BILLS AND CONTRACT NOTES ISSUED BY M/S MKM FINSEC PVT. LTD. ITAT FURTHER OBSERVED THAT THE AO HAD NOT VERIFIED THESE DETAILS AND IN RESPECT OF THE MATERIAL, WHICH HAD BEEN RELIED UPON BY HIM, HE HAD NOT PROVIDED ANY FINDING OF THE INVESTIGATIONS. HENCE, ITAT HELD THAT THE ADDITION MADE BY THE AO COULD NOT BE SAID TO BE ON THE BASIS OF SOME EVIDENCE. ACCORDINGLY, ITAT CONFIRMED THE DELETION MADE BY CIT(A). 5.4 THE ASSESSEE ALSO PRODUCED CERTAIN DOCUMENTS AS MENTIONED AT PAGE 29 OF THE CIT(A)S ORDER. THERE FORE, WE ARE SATISFIED THAT THE IDENTITY OF THE SHARE BROKER IS NOT IN DISPUTE. SO FAR AS CREDITWORTHINESS OF MKM FINSEC PVT. LTD. IS CONCERNED, ON THE REASONING AND OTHER ATTENDANT CIRCUMSTANCES NARRATED BEFORE US AND ALSO ON THE BASIS OF RECORD AND MORE SPECIFICALLY THE BALANCE SHEET OF THE COMPANY IS I NDICATIVE OF THE FACT THAT IT WAS HAVING SHARE HOLDERS FUND OF MORE THAN 76 LACS WHICH IS SUFFICIENT TO PAY THE AMOUNT OF RS. 1 7,49,105/-. THUS, THE CREDITWORTHINESS IS ESTABLISHED. SO FAR AS THE GENUINENESS OF THE TRANSACTION IS CONCERNED, SINC E THE CONTRACT NOTE AND BILLS ISSUED BY M/S MKM FINSEC PVT LTD. FOR SALE OF SHARES AND THE SAME IS INCURRED, PROCEEDS F OR SALE OF SHARES WERE RECEIVED BY CHEQUE AND CREDITED IN THE BANK ACCOUNT, COPY OF THE BANK STATEMENT OF THE ASSESSEE COMPANY WAS FILED ESTABLISHING THAT THE AMOUNT WAS RECEIVED THROUGH BANKING CHANNEL, THE TRANSACTION IS ALSO GENUINE. M ORE ITA NO. 1464/DEL/2012 10 SPECIFICALLY WHEN EVEN THE AO HAS NOT DISPUTED THA T THE SHARES OF THE ASSESSEE WERE SOLD BY THE BROKER WHIC H WERE PURCHASED IN FINANCIAL YEAR 1994-95, DULY REFLECTED IN THE INCOME TAX RECORD AND THE BALANCE SHEET OF THE REL EVANT PERIOD. THE ASSESSEE ALSO FURNISHED CERTIFICATE FRO M AJANTA SOYA LTD. (FORMERLY KNOWN AS KASTURI FINLEASE AND INVEST MENT LTD.) WHOSE SHARES HAVE BEEN SOLD BY THE ASSESSEE COMPANY THROUGH M/S MKM FINSEC PVT. LTD. AND FURTHER IT WA S CONFIRMED REGARDING HOLDING OF SHARES ALONGWITH TRANSFER. TH US, THE TRANSACTION IS GENUINE. IT IS NOT THE CASE THAT M/ S MKM FINSEC PVT. LTD. IS MERELY EXISTING ON PAPERS RATHER THE ITO, WARD 6(1), RECORDED THE STATEMENT OF SH. PREM BATRA, ITS DIRECTOR ON OATH U/S. 131 DURING THE COURSE OF ASSESSMENT PROC EEDINGS OF M/S MKM FINSEC PVT. LTD ON 26.11.2007. THEREFORE, IT CANNOT BE SAID THAT IT IS A DUMMY COMPANY. THE STATEMENT S O RECORDED ON 26.11.2007 THE EXTRACT THEREOF HAS BEEN REPRODUCED BY THE LD. CIT(A) AT PAGE 36 ONWARDS OF HIS ORDER, WHICH HAVE NOT BEEN CONTROVERTED BY THE REVENUE. IN VIEW OF THIS FACT, WE UPHELD THE STAND OF THE LD. CIT(A) ON THIS ISSUE. 6. SO FAR AS ADMITTING ADDITIONAL EVIDENCES AND VI OLATION OF RULE 46A OF THE IT RULES IS CONCERNED, SINCE THE A O HAS PASSED A DETAILED AND SPEAKING ORDER AND IS SATISFIED THAT THE ASSESSEE HAS FULFILLED ALL THE INGREDIENTS OF SECTION 68 THA T TOO AFTER CONSIDERING RELEVANT RECORDS AND EVEN OTHERWISE I F THE ASSESSING OFFICER WAS APPREHENSIVE OF THE EXISTENCE OF M/S MKM FINSEC PVT. LTD. OR WANTED TO EXAMINE THE DIREC TOR, NOTHING PREVENTED HIM TO ISSUE SUMMONS U/S. 131 OF THE ACT AS REQUESTED BY THE ASSESSEE. MORE SPECIFICALLY WHEN HIS ADDRESS ITA NO. 1464/DEL/2012 11 WAS PROVIDED BY THE ASSESSEE TO THE AO AND NO SUCH SUMMONS WERE ISSUED, THEREFORE, THE ASSESSEE CANNOT BE HELD TO BE LIABLE FOR DEFAULT. THE LD. CIT(A) HAS ALSO PERUSED THE CO PY OF THE APPEAL ORDER OF M/S MKM FINSEC PVT. LTD. AS MENTION ED AT PAGE NO. 43 OF THE IMPUGNED ORDER, THEREFORE, THERE IS N O VIOLATION OF RULE 46A AS HAS BEEN ALLEGED. SO FAR AS RELIANCE UP ON VARIOUS JUDICIAL PRONOUNCEMENT FORM BOTH SIDES IS CONCERNED , WE HAVE PERUSED THE SAME AND FOUND THE ORDER OF THE LD. CIT (A) IN ORDER. IN VIEW OF THIS FACT, WE FIND NO INFIRMITY I N THE CONCLUSION DRAWN BY THE LD. CIT(A), HENCE, WE UPHELD THE SAME. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/4/2014. SD/- SD/- [ [[ [S.V. MEHROTRA S.V. MEHROTRA S.V. MEHROTRA S.V. MEHROTRA] ]] ] [ [[ [JOGINDER SINGH JOGINDER SINGH JOGINDER SINGH JOGINDER SINGH] ]] ] ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 11/4/2014 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 1464/DEL/2012 12