ACIT, Circle-20(3), V. Priyanka Gupta,

ITA 215/DEL/2006

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52968 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 26-09-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 20-01-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: ASHWANI TANEJA
• Keywords: Unexplained investment; Principle of natural justice
• Section: 69

Judgement Text

ITA NO. 215/DEL/2006 & CO NO. 132/DEL/2008 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 215/DEL/2006 A.Y. : 2002-03 ACIT, CIR. 20(1), F-308, VIKAS BHAVAN, NEW DELHI VS. MS. PRIYANKA GUPTA, 114C, SFS GULABI BAGH, DELHI AND CROSS OBJECTION NO. 132/DEL/2008 (IN ITA NO. 215/DEL/2006) A.Y. 2002-03 M S. PRIYANKA GUPTA, C/O M/S CORPORATE PROFESSIONALS, D-28, SOUTH EXTENSION, PART-I, NEW DELHI 110 049 VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 20(1), NEW DELHI ASSESSEE BY: SH. ASHWANI TANEJA, ADV. DEPARTMENT BY : SH. R.S. NEGI, SR. D.R. ORDER ORDER ORDER ORDER PER PER PER PER SHAMIM YAHYA : AM SHAMIM YAHYA : AM SHAMIM YAHYA : AM SHAMIM YAHYA : AM THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE EMANATE OUT OF ORDER OF THE LD. COMMISSIONER OF INCO ME TAX (APPEALS) DATED 27.10.2005 PERTAINING TO ASSESSMENT YEAR 2002 -03. REVENUES APPEAL (ITA NO. REVENUES APPEAL (ITA NO. REVENUES APPEAL (ITA NO. REVENUES APPEAL (ITA NO. 215 215 215 215) )) ) 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOM E TAX (APPEALS) HAS ERRED IN DELEING THE ADDITION MADE BY THE ASSESSING ITA NO. 215/DEL/2006 & CO NO. 132/DEL/2008 2 OFFICER OF ` 1437480/- ON ACCOUNT OF UNEXPLAINED I NVESTMENT IN PURCHASE OF FLAT. 3. IN THIS CASE THE ASSESSEE PURCHASED 12000 SHARES @ ` 2.70 PER SHARE FROM M/S GOYAL ACHAL SAMPTTI VNN LTD. AND THE S OURCE OF PURCHASE OF SUCH SHARES AMOUNTING TO ` 32800/- WER E STATED TO BE OUT OF THE CASH IN HAND AVAILABLE WITH THE ASSESSEE. TH E SHARES WERE PURCHASED THROUGH THE SHARES BROKER VIZ. M/S MITTAL FINVEST ON 271.2001 ON WHICH BROKERAGE OF ` 1200/- WAS PAID. T HE COPY OF ACCOUNTS OF THE ASSESSEE AS APPEARING IN THE BOOKS OF ACCOUNT OF M/S MITTAL FINVEST WAS FURNISHED ALONGWITH ACKNOWLEDGEMEN T COPY OF INCOME TAX RETURN FOR ASSESSMENT YEARS 2001-02 AND 2002-03 WHEREIN INCOME TAX PAN WAS ALSO MENTIONED, IN COMPLIANCE TO TH E SUMMON ISSUED BY THE ASSESSING OFFICER ON M/S MITTAL FINVES T. ASSESSEE SOLD THESE SHARES THROUGH M/S SJ CAPITAL LTD. ON 15.3.2 000 FOR A TOTAL CONSIDERATION OF ` 1437600/-. THE ASSESSING OFFIC ER ISSUED SUMMONS TO M/S SJ CAPITAL LTD. A DETAILED REPLY WAS FURNI SHED VIDE LETTER DATED 14.3.2005 WHEREIN THE COPY OF ACCOUNT OF THE ASSESS EE AS APPEARING IN THE BOOKS OF M/S SJ CAPITAL LTD. FOR F.Y. 2001-02 RE LEVANT TO ASSESSMENT YEAR 2002-03 ALONGWITH THE COPY OF ACKNOWLEDGEMENT OF INCOME TAX RETURN FOR A.Y. 2002-03 OF M/S SJ CAPITAL LTD. TH E ASSESSING OFFICER WAS NOT SATISFIED WITH THESE EVIDENCES AND CONDUC TED ENQUIRIES THROUGH THE INSPECTOR AT THE DECLARED ADDRESSES OF THE SHARE BROKERS AND THE COMPANY VIZ. M/S GOYAL ACHAL SAMPATTI LTD. AS REGARDS, M/S MITTAL FINVEST, THE INSPECTOR CAME ACROSS SHRI AJAY MI TTAL AT THE NEW ADDRESS AND HE EXPRESSED HIS IGNORANCE ABOUT ANY TR ANSACTION OF SALE / PURCHASE OF SHARES IN CONNECTION WITH THE ASSESSE E. SIMILARLY, THE ASSESSING OFFICER CONTACTED WITH ONE SHRI VINOD KU MAR STATED TO BE RESIDENT OF THE NEW ADDRESS OF M/S SJ CAPITAL LTD. AND HE INFORMED THAT ITA NO. 215/DEL/2006 & CO NO. 132/DEL/2008 3 HE WAS DOING BUSINESS OF SALE/PURCHASE OF PULSES AN D HE WAS NOT AWARE OF ANY COMPANY CALLED M/S SJ CAPITAL LTD.. FU RTHER, NO SIGNBOARD OF M/S SJ CAPITAL LTD. WAS DISPLAYED AT THE NEW ADDRESS. THE INSPECTOR ALSO VISITED THE DECLARED ADDRESS O F M/S GOYAL ACHAL SAMPATTI LTD. AND REPORTED THAT THERE WAS NO OFFICE IN THE NAME OF THIS COMPANY AT THE SAID ADDRESS. EVENTUALLY, THE INS PECTOR COULD SERVE THE SUMMON TO ONE SHRI RADHEY KANT TIWARI AVAILABLE AT THE SAID ADDRESS. THE ASSESSING OFFICER ISSUED SUMMONS TO ALL THESE ENTITIES FOR NECESSARY COMPLIANCE ON 28.3.2005 BUT ULTIMATELY THERE WAS NO COMPLIANCE TO SUCH SUMMONS ON THE APPOINTED DATE. FINALLY, ASSESSING OFFICER ISSUED SUMMONS TO THE ASSESSEE AN D HER FATHER, VIZ. SHRI KAMLESH KUMAR GUPTA. ASSESSEE AND HER FATHER W ERE REPRESENTED THROUGH THE COUNSEL WHO APPEARED ON 29.3.2005 AND F URNISHED THE DETAILED SUBMISSIONS AS REGARDS THE TRANSACTIONS OF SALE / PURCHASE OF SHARES. THE ASSESSING OFFICER HAS NOT DRAWN ANY I NFERENCE BASED ON SUCH SUBMISSIONS ABOUT THE GENUINENESS OF SALE /PURC HASE OF SUCH SHARES. THE ASSESSING OFFICER HAS HEAVILY RELIE D ON THE INSPECTORS REPORT AND CAME TO THE CONCLUSION THAT SINCE THE SH ARE BROKERS VIZ. M/S MITTAL FINVEST AND M/S SJ CAPITAL LTD. AND THE COMPANY VIZ. M/S GOYAL ACHAL SAMPATTI LTD. WERE NOT FOUND TO BE EXISTENT AT THE DECLARED ADDRESSES, THE ENTIRE SALE/ PURCHASE TRANSACTION OF SHARES SHOWN BY THE ASSESSEE WAS BOGUS AND ACCORDINGLY, TREATED TH E SUM OF ` 1437480/- AS UNEXPLAINED INVESTMENT U/S 69 OF THE I T ACT, 1961. 4. UPON ASSESSEES APPEAL IN THIS REGARD, LD. COMMIS SIONER OF INCOME TAX (APPEALS) OBSERVED THAT THE REQUISITIONS MADE BY THE ASSESSING OFFICER IN THE SUMMONS ISSUED TO THE SHAR E BROKERS VIZ. M/S MITTAL FINVEST AND M/S SJ CAPITAL LTD. WERE DULY COMPLI ED WITH BY THESE ITA NO. 215/DEL/2006 & CO NO. 132/DEL/2008 4 SHARE BROKERS VIDE LETTER DATED 14.3.2005. THE COP IES OF ACCOUNTS FURNISHED BY THESE SHARE BROKERS TALLY WITH THE TR ANSACTIONS DECLARED BY THE ASSESSEE. THE PURCHASE CONSIDERATION REC EIVED BY M/S MITTAL FINVEST TO THE TUNE OF ` 32800/- IN CASH IS DULY REF LECTED IN THE ACCOUNT OF THE ASSESSEE AS APPEARING IN THE BOOKS OF ACCOUN T OF M/S MITTAL FINVEST. SIMILARLY, THE SALE CONSIDERATION PAID BY ACCOUNT PAYEE CHEQUE BY M/S SJ CAPITAL LTD. IS DULY REFLECTED IN THE COPY OF ACCOUNT OF THE ASSESSEE AS APPEARING IN THE BOOKS OF ACCOUNT O F M/S SJ CAPITAL LTD. THE IDENTITIES OF BOTH THESE PARTIES HAVE BEEN ES TABLISHED BY FURNISHING THE COPIES OF ACKNOWLEDGEMENT OF IT RETU RNS FOR A.Y. 2002- 03. LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTH ER OBSERVED THAT AS REGARDS, M/S GOYAL ACHAL SAMPATTI LTD. THE COMPA NY WHOSE SHARES WERE TRANSACTED BY THE ASSESSEE, IT IS NOTICED THAT THE SUMMON WAS SERVED ON ONE SHRI RADHEY KANT TIWARI, WHOSE CONNE CTION WITH THE COMPANY WAS NOT AT ALL ESTABLISHED. AS A RESULT, T HE SUMMON REMAINED UNCOMPLIED. LD. COMMISSIONER OF INCOME TAX ( APPEALS) FURTHER OBSERVED THAT ASSESSING OFFICER COLLECTED INFORMATION AGAINST THE ASSESSEE THROUGH THE INSPECTORS REPORT AND THE SAID REPORT WAS NEVER CONFRONTED TO THE ASSESSEE FOR NECESSARY REBU TTAL. LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER OBSERVE D THAT THE COUNSEL OF THE ASSESSEE HAS SUBMITTED THAT THE ADDRE SS OF REGISTERED ITA NO. 215/DEL/2006 & CO NO. 132/DEL/2008 5 OFFICE OF THE COMPANY VIZ. GOYAL ACHAL SAMPATTI LTD. HAS GOT SHIFTED TO THE STATE OF GUJRAT AND THE ASSESSEE WAS NEVER ASKED ABOUT THE NEW ADDRESS OF THIS COMPANY. THE ASSESSING OFFICER W ITH DUE DILIGENCE, COULD HAVE PROCURED THE PRESENT ADDRESS OF THE COMPA NY BY CONDUCTING NECESSARY ENQUIRIES WITH THE REGISTRAR O F COMPANIES WHICH HAS NOT BEEN DONE. IN THE BACKGROUND OF THE AFOR ESAID DISCUSSION, LD. COMMISSIONER OF INCOME TAX (APPEALS) HELD AS UNDER:- HAVING REGARD TO THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT THE APPELLANT HAS DI SCHARGED ONUS BY FURNISHING THE RELEVANT DETAILS IN REGARD TO THE TRANSACTIONS OF SALE / PURCHASE OF SHARES RESULTING IN THE LONG TERM CAPITAL GAIN DECLARED BY THE APPELLANT. SINCE THE ASSESSING OFFICER HAS BASED HIS FINDING THAT SUCH TRANSACTIONS WERE BOGUS ON THE BASIS OF INSPECTOR S REPORT WHICH WAS NEVER CONFRONTED TO THE APPELLANT IGNORI NG THE PRINCIPLE OF NATURAL JUSTICE, I AM UNABLE TO SUSTAI N SUCH VIEW TAKEN BY THE ASSESSING OFFICER. SINCE ALL THE PA RTICULARS REGARDING THE TRANSACTIONS OF SALE/ PURCHASE OF SHA RES VIZ. THE COPIES OF ACCOUNT, THE MODE OF PAYMENTS AND THE PAN OF THE SHARE BROKERS ESTABLISHING THEIR IDENTITIES WERE DULY FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS, NO ADVERSE INFERENCE CAN BE DRAWN ABOUT THE GENUINEN ESS OF SUCH TRANSACTIONS UNLESS CLINCHING EVIDENCE IS COLL ECTED TO PROVE THE ABSURDITY OF SUCH TRANSACTIONS. IN VIEW OF THESE FACTS, THE ASSESSMENT OF THE ENTIRE SUM RECEIVED BY WAY OF SALE PROCEEDINGS OF SHARES AMOUNTING TO ` 14,37,48 0/- BY ITA NO. 215/DEL/2006 & CO NO. 132/DEL/2008 6 TREATING THE SAME AS UNEXPLAINED INVESTMENT U/S 6 9 OF THE IT ACT, 1961 IS NOT MAINTAINABLE AND ACCORDINGLY, I DELETE SUCH ADDITION. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THAT ALL THE PARTICULARS REGARDING THE TRANSACTION OF SALE/PURCHASE OF SHARE S, THE COPIES OF ACCOUNT, THE MODE OF PAYMENTS AND THE PAN OF THE SHAR E BROKERS ESTABLISHING THEIR IDENTITIES WERE DULY FURNISHED D URING THE COURSE OF ASSESSMENT PROCEEDINGS. HENCE, WE AGREE WITH THE L D. COMMISSIONER OF INCOME TAX (APPEALS) IN THIS REGARD, NO ADVERSE I NFERENCE CAN BE DRAWN ABOUT THE GENUINENESS OF SUCH TRANSACTIONS U NLESS CLINCHING EVIDENCE IS COLLECTED TO PROVE THE ABSURDITY OF SU CH TRANSACTIONS. ASSESSING OFFICER HAS BASED HIS FINDING THAT SUCH TRANSACTIONS WERE BOGUS ON THE BASIS OF INSPECTORS REPORT WHICH WAS NEVER CONFRONTED TO THE ASSESSEE IGNORING THE PRINCIPLE OF NATURAL JUSTICE. HENCE, WE FIND THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) IS CORRECT IN THIS REGARD IN HOLDING THAT THE ADDITION OF ` 14374 80/- BY TREATING THE SAME AS UNEXPLAINED INVESTMENT U/S 69 OF THE IT ACT IS NOT MAINTAINABLE. IN THE RESULT, WE UPHOLD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 7. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. ASSESSEES ASSESSEES ASSESSEES ASSESSEES CROSS OBJECTION CROSS OBJECTION CROSS OBJECTION CROSS OBJECTION NO. 132 NO. 132 NO. 132 NO. 132 8. IN THE CROSS OBJECTION ASSESSEE HAS SUBMITTED TH AT THE NOTICE U/S. 143(2) WAS NOT SERVED WITH IN THE STATUTORY TIME LIMIT. WE FIND ITA NO. 215/DEL/2006 & CO NO. 132/DEL/2008 7 THAT WE HAVE ALREADY DECIDED THE ISSUE ON MERITS IN FAVOUR OF THE ASSESSEE AND UPHELD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), HENCE, ADJUDICATION ON THIS ASPECT IS ON LY ACADEMIC AND HENCE, BECOMES INFRUCTUOUS. ACCORDINGLY, THE CO F ILED BY THE ASSESSEE IS DISMISSED AS INFRUCTUOUS. 9. IN THE RESULT, REVENUES APPEAL BEING ITA NO. 2 15/DEL/2006 IS DISMISSED AND THE ASSESSEES CROSS OBJECTION NO. 132 /DEL/2008 IS DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON 30/9/2011. SD/ SD/ SD/ SD/- -- - SD/ SD/ SD/ SD/- -- - [R [R[R [R.P. TOLANI .P. TOLANI .P. TOLANI .P. TOLANI] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 30/9/2011 SRB 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, DEPUTY REGISTRAR, ITAT, DELHI BENCHES