DCIT, New Delhi V. M/s Century Finvest Pvt. Ltd., New Delhi

ITA 2281/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3626 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 06-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y S KAKKAR
• Keywords: Deemed to accrue or arise in india; Accommodation entries
• Section: 133(6); 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B NEW DELHI) BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER I.T.A. NO.2281/D/2011 ASSESSMENT YEAR: 2002-03 D.C.I.T., VS. M/S CENTURY FINVEST (P) LTD., CIRCLE 3(1), 72, 2 ND FLOOR, VIJAY BLOCK, NEW DELHI VIKAS MARG, NEW DELHI PAN/GIR NO.AAACC 3253 A (APPELLANT) (RESPONDENT) APPELLANT BY : MS. Y.S. KAKKAR, SR. DR RESPONDENT BY : SHRI ANIL KUMAR GUPTA, CA ORDER PER RAJPAL YADAV: JM: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDER O F CIT(A) DATED 09.03.2011 PASSED FOR ASSESSMENT YEAR 2002-03. IN THE SOLITARY GROUND OF APPEAL, REVENUE HAS PLEADED THAT LEARNED C IT(A) HAS ERRED IN DELETING THE ADDITION OF `9,71,265/-, WHICH WAS ADDE D BY THE ASSESSING OFFICER WITH THE AID OF SECTION 68 OF THE INCOME-TAX ACT, 1961. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE-COMPANY HAS FILED ITS RETURN OF INCOME ON 31 ST OCTOBER, 2002 VIDE ACKNOWLEDGEMENT NO.00509. THE ASSESSING OFFICER HAD ISSUED A NOTICE U/S 1 48 ON 31.03.2009 ON THE GROUND THAT HE HAS RECEIVED INFORM ATION FROM THE OFFICE OF CIT-I, NEW DELHI VIDE, WHICH HE WAS INFORM ED THAT CERTAIN DETAILS WERE CAME TO THE NOTICE OF THE DEPARTMENT WH ILE CARRYING OUT SURVEY IN THE CASE OF GURCHARAN JEWELLERS THAT ITS PROP RIETOR SHRI ASHOK KUMAR CHAUHAN WAS INVOLVED IN PROVIDING ENTRIES. THE ASSESSING OFFICER FURTHER OBSERVED THAT DEPARTMENT HAS MADE EXT ENSIVE INQUIRIES INTO NUMEROUS BANK ACCOUNTS. IT REVEALED TO THE REVE NUE THAT 2281-2011-CF 2 ASSESSEE HAD TAKEN ACCOMMODATION ENTRY FROM M/S ANUPAM FINVEST LIMITED. THE ASSESSING OFFICER HAS THEREAFTER NARRATED THE DETAILS OF CERTAIN TRANSACTIONS IN A TABULAR FORM ON PAGE 2 OF T HE ASSESSMENT ORDER. ON THE BASIS OF THOSE DETAILS, HE REOPENED THE ASSESSMENT. THE ASSESSEE CONTENDED THAT ORIGINAL RETURN FILED BY IT BE TREATED AS FILED IN RESPONSE TO THE NOTICE U/S 148 OF THE INCOME-TAX ACT. AFTER MAKING OBSERVATION WITH REGARD TO THESE PROCEDURAL ASPECTS, TH E LEARNED ASSESSING OFFICER HAS MADE THE ADDITION WITHOUT MAKING A NY ELABORATE DISCUSSION. HIS FINDING READS AS UNDER:- THE ASSESSEE-COMPANY DURING THE RE-ASSESSMENT PROCEEDINGS SUBMITTED THAT SUMS MENTIONED IN THE REASONING IS ON ACCOUNT OF SALE & PURCHASE OF SHARES THROUGH TRADING ACCOUNT OF ANUPAM FINVEST LIMITED. IN ORDER TO VERIFY THE FACTS NOTICE U/S 133(6) WAS ISSUED T O M/S ANUPAM FINVEST LTD. IN RESPONSE TO THIS M/S ANUPAM FINVEST LIMITED FILED COPY OF ACCOUNTS OF THE ASSESSEE COMPANY IN ITS BOOKS OF ACCOUNT. SUMMARY ASSESSMENT IN THIS CASE COMPLETED ON 28.2.2003 ACCEPTING THE RETURN INCOME OF THE ASSESSEE. THE CONTENTION OF THE ASSESSEE THAT THE SUMS REFERRED IN THE REASONING IS ON ACCOUNT OF SALE & PURCHASE OF SHARES THROUGH TRADING ACCOUNT OF M/S ANUPAM FINVEST LTD. IS NOT ACCEPTABLE SINCE ASSESSEE FAILED TO SUBMIT THE DOCUMENTARY EVIDENCE I.E. SHARE TRANSFER CERTIFICATES/REGISTER FOLIO NUMBER IN SUPPORT OF SALE/PURCHASE OF SHARES. IN VIEW OF AFORESAID THE SUM OF `971265/- I.E. BOLGUS CASH CREDIT AND IS COVERED U/S 68 AND IS DEEMED INCOME OF T HE ASSESSEE. HENCE, AN ADDITION OF `971265/- IS MADE TO TH E RETURN INCOME OF THE ASSESSEE. 3. ON APPEAL, THE LEARNED CIT(A) DELETED THE ADDITI ON ON THE GROUND THAT ASSESSING OFFICER WAS NOT POSSESSING ANY INFORMATION WH ICH CAN SUGGEST THAT ASSESSEE HAS AVAILED ONLY ACCOMMODATION ENTRY . ACCORDING TO THE LEARNED CIT(A), ASSESSEE HAS EXPLAINED ITS POSITION THAT PURCHASE AND SALES OF SHARES THROUGH TRADING ACCOUN T OF M/S 2281-2011-CF 3 ANUPAM FINVEST LIMITED HAS BEEN CARRIED OUT BY THE ASSE SSEE. THE ASSESSEE HAS FILED CONTRACT NOTES AND DEMAT ACCOUNT OF M/ S ANUPAM FINVEST LIMITED BEFORE THE ASSESSING OFFICER. SUCH CONC ERN HAS CONFIRMED THE DEALING WITH THE ASSESSEE IN RESPONSE TO TH E NOTICE RECEIVED U/S 133 (6) OF THE INCOME-TAX ACT. 4. THE LEARNED DR WHILE IMPUGNING THE ORDER OF CIT( A), CONTENDED THAT BY MERELY SUBMITTING THE COPY OF ACCOUNT WITHOU T GIVING DOCUMENTARY EVIDENCE OF CONTRACT DETAILS, IT CANNOT BE ASCERTAINED THAT ASSESSEE HAS CARRIED OUT TRADING ACTIVITIES. ACCORD ING TO HER, ASSESSEE HAS MISERABLY FAILED TO PROVE THE PURCHASE AND SAL E OF SHARES. 5. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASSESSEE R ELIED ON THE ORDER OF CIT(A). 6. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION AND GONE THROUGH THE RECORD CAREFULLY. THE ASSESSING OFFICER HAS TREATED THE INFORMATION SUPPLIED BY THE LEARNED CIT(A)-I AS A GOSPEL TRUTH AND DID NOT COLLECT ANY MATERIAL TO SUBSTANTIATE THAT INFORMATION. THAT INFORMATION COULD BE SUFFICIENT FOR STARTING THE INVESTIGATION BUT IT WA S NOT A CONCLUSIVE PROOF OF AVAILING ACCOMMODATION ENTRIES. WHAT IS THE SOURCE OF INFORMATION WHO HAS GIVEN SUCH STATEMENT, NOTHING THAT SORT OF WERE COLLECTED BY THE ASSESSING OFFICER. ON THE OTHER HAND, ASSESSEE HAS EXPLAINED ITS POSITION THAT AMOUNT ALLEGED IN THE TAB LE WAS RECEIVED BY THE ASSESSEE THROUGH ACCOUNT PAYEE CHEQUES IN PURSUANCE O F SALE AND PURCHASE OF SHARES. M/S ANUPAM FINVEST LIMITED HAS CONFI RMED THIS ASPECT IN RESPONSE TO THE SUMMONS ISSUED BY THE ASSESSING OFFI CER. TO OUR MIND, LEARNED ASSESSING OFFICER FAILED TO BRING ANY CONCLUSIVE EVIDENCE ON THE RECORD IN SUPPORT OF HIS BELIEF. LEA RNED CIT(A) HAS RIGHTLY OBSERVED THAT ASSESSING OFFICER FAILED TO BRING ANY MATERIAL ON 2281-2011-CF 4 THE RECORD TO SUBSTANTIATE THE INFORMATION. THAT TRA NSACTION CARRIED OUT BY THE ASSESSEE WAS A BOGUS ONE. HIS SIMPLE APPROACH W AS NOT TO BELIEVE ANYTHING SUBMITTED BY THE ASSESSEE. INSTEAD OF T HIS STEP, LEARNED ASSESSING OFFICER OUGHT TO HAVE COLLECTED THE M ATERIAL AND THEN DISBELIEVE THE TRANSACTION. TAKING INTO CONSIDER ATION THE DETAILED ORDER OF LEARNED CIT(A), WE DO NOT SEE ANY REASON TO INTERFERE IN IT. 7. IN RESULT, APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN OPEN COURT ON 07.07.2011 . SD/- SD/- ( K.D. RANJAN ) ( RAJPAL YADA V ) ACCOUNTANT MEMBER JUDICIA L MEMBER DT.07.07.2011. NS COPY FORWARDED TO:- 1. DY. CIT, CIRCLE-3(1), NEW DELHI. 2. M/S CENTURY FINVEST PVT. LTD., 72, 2 ND FLOOR, VIJAY BLOCK, VIKAS MARG, NEW DELHI 3. THE CIT 4. THE CIT (A), NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY BY ORDER (ITAT, NEW DELHI).