I.T.O.-4(3), Agra V. Smt. Renu Agrawal, Agra

ITA 198/AGR/2010

• Counselvise Citation: 19820314 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-08-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 24-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Keywords: Reason to believe

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA NO. 198/AGRA/2010 ASSTT. YEAR : 200102 INCOME-TAX OFFICER, VS. SMT. RENU AGARWAL, 4(3), AGRA. D-15, KAMLA NAGAR, AGRA (PAN : AAUPA 2815 P) (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI A.K. SHARMA, JR. DR FOR RESPONDENT : SHRI ANURAG SINHA, ADVOCATE. DATE OF HEARING : 19.08.2011 DATE OF PRONOUNCEMENT : 19.08.2011 ORDER PER BENCH : THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 09.03.2010 OF THE LD. CIT(A)-II, AGRA ON THE FOLLOWING EFFECTIVE GROUNDS : 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN QUASHING THE PROCEEDINGS INITIATED U/S. 147 WITHOUT PROPERLY APP RECIATING THE FACTS THAT SPECIFIC INFORMATION OF TAKING BOGUS ENTRIES WAS RECEIVED FR OM INVESTIGATION WING OF THE DEPARTMENT. 2. THAT THE LD. CIT(A)-II, AGRA HAS ERRED IN LAW AN D ON FACTS IN DELETING THE ADDITION OF RS.6,57,663/- MADE BY THE AO U/S. 68 OF THE IT ACT, 1961 WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE. 2. GROUND NO. 1 ASSAILS THE IMPUGNED ORDER IN REGAR D TO THE ISSUE OF INITIATION OF PROCEEDINGS U/S. 147 OF THE ACT. THE FACTS MENTIONE D IN THE IMPUGNED ORDER ARE THAT THE AO RECEIVED INFORMATION FROM THE INVESTIGATION WING, A GRA, THAT THE ASSESSEE RECEIVED A SUM OF RS.2,23,360/- BY WAY OF DEMAND DRAFT DRAWN ON CANAR A BANK, KAMLA NAGAR, AGRA. THE DETAILS OF THE ACCOUNT, IN WHICH THE AMOUNT WAS DEBITED, WE RE ALSO FURNISHED. IT WAS FURTHER INFORMED 2 THAT THE ENQUIRIES CONDUCTED BY THE ADDL. DIT SHOW THAT THE TRANSACTION IS NOT GENUINE AND IT IS IN THE NATURE OF ACCOMMODATION ENTRY. THE ENTRY WAS IN RESPECT OF CAPITAL GAINS ARRANGED THROUGH BROKER. ON THE BASIS OF INFORMATION, IT WAS RECORDE D THAT ADVERSE MATERIAL IS IN POSSESSION AND ON THAT BASIS, THERE IS REASON TO BELIEVE THAT INCOME OF RS.3,23,360/- HAS BEEN SHOWN AS BOGUS SALE PROCEEDS OF SHARES, LEADING TO ESCAPEMENT OF INCOME OF THE EQUIVALENT AMOUNT FOR THE ASSESSMENT YEAR 2001-02. THE LD. CIT(A) CONSIDERED VARIOUS CAS E LAWS IN THE MATTER AND CAME TO THE CONCLUSION THAT THE REASONS ARE VAGUE, IRRATIONAL A ND ARBITRARY, WHICH DO NOT CONSTITUTE SUFFICIENT GROUND FOR COMING TO THE CONCLUSION THAT THE INCOME HAS ESCAPED ASSESSMENT. 3. BEFORE US, THE LD. DR SUBMITTED THAT THE ASSESSI NG OFFICER HAD RECEIVED SPECIFIC INFORMATION FROM THE INVESTIGATION WING OF THE DEPA RTMENT REGARDING ACCOMMODATION ENTRY RECEIVED BY THE ASSESSEE. ALL PARTICULARS WERE FURN ISHED IN RESPECT OF DEMAND DRAFT AND THE RECIPIENT. THE ADDL. DIT IS A STATUTORY AUTHORITY U NDER THE ACT, WHICH HAS BEEN ENTRUSTED WITH THE WORK OF INVESTIGATION. THEREFORE, LOOKING TO THE DE TAILS OF INFORMATION AND ITS HAVING BEEN RECEIVED FROM THE STATUTORY AUTHORITY, IT CAN BE SA ID THAT THE SAME WAS BELIEVABLE. THE AO ALSO APPLIED HIS OWN INDEPENDENT MIND WHEN HE RECORDED T HAT HE HAS REASON TO BELIEVE THAT INCOME OF RS.3,23,360/- ESCAPED ASSESSMENT ON ACCOUNT OF CLAS SIFYING IT AS SALE PROCEEDS OF SHARES. THE INFORMATION SHOWED THAT IT WAS MERELY AN ACCOMMODAT ION ENTRY. THEREFORE, IT CANNOT BE SAID THAT THE INFORMATION WAS VAGUE OR THERE WAS NO APPLICATI ON OF MIND ON THE PART OF THE ASSESSING OFFICER. IN REPLY, THE LD. AR RELIED ON THE ORDER O F LD. CIT(A). 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUB MISSIONS MADE BEFORE US. THIS IS THE FIRST ASSESSMENT MADE IN THE CASE OF ASSESSEE AFTER SCRUT INY. THE NOTICE WAS ISSUED ON THE BASIS OF SPECIFIC INFORMATION, WHICH EXISTED ON RECORD WHEN THE REASONS FOR ISSUING THE NOTICE WERE 3 RECORDED. THE ASSESSING OFFICER HAS ALSO APPLIED HI S MIND SPECIFICALLY WHEN IT IS MENTIONED THAT THE INCOME ESCAPED ASSESSMENT, AS BOGUS SALE PROCEE DS ARE SHOWN WHILE THE TRANSACTION IS MERELY AN ACCOMMODATION ENTRY. IN THESE CIRCUMSTANCES, WE DO NOT AGREE WITH THE LD. CIT(A) THAT THE REASONS WERE VAGUE, IRRATIONAL OR ARBITRARY. IT MAY BE MENTIONED HERE THAT AT THIS STAGE, ONLY A TENTATIVE OPINION IS TO BE FORMED WHICH HAS BEEN SO DONE BY THE AO. HE DOES NOT HAVE TO PROVE CONCLUSIVELY THE FACTUM OF ESCAPEMENT OF INCOME. IN THIS VIEW OF THE MATTER, IT IS HELD THAT THE LD. CIT(A) ERRED IN QUASHING THE NOTICE U/S. 148. THUS, GROUND NO. 1 IS ALLOWED. 5. ADVERTING TO GROUND NO. 2, THE FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NOT DISPUTED BY BOTH THE PARTIES. THEREFORE, THERE IS NO NEED TO REPEAT THE SAME FOR THE SAKE OF REPETITION. 6. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSE SSEE STATED AT THE OUTSET THAT ISSUE INVOLVED IN GROUND NO. 2 HAS ALREADY BEEN ADJUDICATED BY THI S BENCH AND DECIDED IN FAVOUR OF THE ASSESSEE IN THE FOLLOWING CASES OF ASSESSEES FAMILY MEMBERS : (I). ITA NO. 192/AGRA/2010, DCIT VS. KANTI PRASAD AGARWAL, ORDER DT. 30.6.11 (II). ITA NO. 193/AGRA/2010, DCIT VS. KANTI PRASAD AGARWAL , ORDER DT. 15.07.11 (III). ITA NO. 157/AGRA/2010, DCIT VS. MUKESH KR. AGARWAL-HUF, ORDER DT.15.07.11 (IV) ITA NO. 220/AGRA/2010 , DCIT VS. MUKESH KUMAR AGARW AL, ORDER DT. 30.06.11 (V) ITA NO. 290/AGRA/2010, DCIT VS. SANJAY KR. AGARWAL- HUF, ORDER DT. 15.07.11 (VI) ITA NO. 216/AGRA/2010, DCIT VS. SHEELA DEVI AGARWAL , ORDER DT. 30.06.2011. HE REQUESTED THAT KEEPING IN VIEW THESE RECENT DEC ISIONS OF THIS BENCH, GROUND NO. 2 RAISED BY THE REVENUE MAY BE DISMISSED. 7. ON THE CONTRARY, LD. DR RELIED ON THE ORDER PASS ED BY THE ASSESSING OFFICER. 8. WE HAVE HEARD THE BOTH PARTIES ON THE ISSUES INV OLVED IN GROUND NO. 2. WE HAVE ALSO THOROUGHLY GONE THROUGH THE ORDERS PASSED BY THIS B ENCH IN THE CASES OF ASSESSEES FAMILY 4 MEMBERS AS MENTIONED ABOVE AND WE ARE OF THE CONSID ERED OPINION THAT ITAT, AGRA BENCH HAS ADJUDICATED THE ISSUE INVOLVED IN GROUND NO. 2 AND DECIDED THE SAME IN FAVOUR OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE SAME, GROUND NO. 2 OF RE VENUES APPEAL IS DISMISSED. 9. IN RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED. SD/- SD/- (K.G. BANSAL) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19 TH AUGUST, 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