The ACIT, Bhopal V. Shri Keshv Chand Jain, Bhopal

ITA 236/IND/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2727 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 25-06-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 14-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MITRA
• Assessee Lawyers: ANKUR JAIN
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68

Judgement Text

PAGE 1 OF 7 -. I.T.A.NO. 236/IND/2009 SHRI KESHAV CHAND JAIN, BHOPAL. IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER PAN NO. : ABEPJ8275H I.T.A.NO. 236/IND/2009 A.Y. : 2005-06 ACIT, SHRI KESHAV CHAND JAIN, 1(1), VS BHOPAL. BHOPAL. APPELLANT RESPONDENT APPELLANT BY : SHRI P.K.MITRA, SR. DR RESPONDENT BY : SHRI ANKUR JAIN, CA DATE OF HEARING : 25.6.2010 O R D E R PER V.K. GUPTA, A.M. THIS APPEAL FILED BY THE REVENUE ARISES OUT OF ORDE R OF THE LD. CIT(A)-I, BHOPAL , DATED 24.02.2009, FOR THE ASSESS MENT YEAR 2005-06. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. GROUND NO. 1 READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 7,73,039/- PAGE 2 OF 7 -. I.T.A.NO. 236/IND/2009 SHRI KESHAV CHAND JAIN, BHOPAL. MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN TREATED B Y THE ASSESSING OFFICER AS UNEXPLAINED CASH CREDIT. 4. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE DURING T HE YEAR UNDER CONSIDERATION SOLD CERTAIN SHARES WHERE ON IT EARNE D A LONG TERM CAPITAL GAINS OF RS. 7,73,039/-. THE AO ASKED THE ASSESSEE TO SUBMIT THE DETAILS OF DOCUMENTARY EVIDENCES SUCH AS PURCHASE BILLS, BR OKERS NOTE, PAYMENT DETAILS, SALE BILLS ETC. THE ASSESSEE, HOWEVER, SUB MITTED BROKERS NOTE ONLY AND THE ADDRESS OF THE COMPANY WHOSE SHARES HAVE BE EN PURCHASED AND SOLD. THE AO SENT NOTICE U/S 133, WHICH REMAINED UN SERVED DUE TO CHANGE OF ADDRESS. THE ASSESSEE SUBMITTED THE CHANG ED ADDRESS. HOWEVER, THE AO DID NOT SEND LETTER THEREON AS REQU ESTED BY THE ASSESSEE. THE AO FURTHER FOUND THAT AT PRESENT THE SHARES WER E HAVING NO VALUE NOR THESE WERE TRADED REGULARLY EXCEPT FOR THE PURPOSE OF RIGGING OF PRICES AND BOOKING ARTIFICIAL GAINS. THE AO TREATED SUCH LONG TERM CAPITAL GAINS AS UNEXPLAINED CASH CREDIT. AGGRIEVED BY THIS, THE ASS ESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHEREIN IT WAS CONTEN DED THAT THE AOS ACTION WAS AN INSTANCE OF SUSPICION, SURMISES AND C ONJECTURES. THE LD.CIT(A) FOUND THAT THERE WAS NO SOUND BASIS ON WH ICH LONG TERM CAPITAL GAINS HAD BEEN TREATED AS UNEXPLAINED CASH CREDIT. HENCE, HE DELETED THE ADDITION. AGGRIEVED BY THIS, THE REVENUE IS IN APPE AL BEFORE US. PAGE 3 OF 7 -. I.T.A.NO. 236/IND/2009 SHRI KESHAV CHAND JAIN, BHOPAL. 5. THE LD. SR. DR PLACED STRONG RELIANCE ON THE ORDER OF THE A.O., WHEREAS THE LD. COUNSEL FOR THE ASSESSEE PLACED STR ONG RELIANCE ON THE ORDER OF THE LD. CIT(A). 6. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 7. WE FIND THAT THE CHANGED ADDRESS HAS BEEN FURNISHED BY THE ASSESSEE TO THE AO. HOWEVER, THE AO HAS REFUSED TO TAKE COGNIZANCE THEREOF FOR WHICH NO PLAUSIBLE REASON HAD BEEN BROU GHT ON RECORD BY THE ASSESSING OFFICER. WE ALSO FIND THAT THE AO HAS TAK EN DETAILS ONLY FROM THE WEB SITE, RATHER ANY CONFIRMATION FROM THE CONC ERNED STOCK EXCHANGE. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE AOS ACTION IS HALF HEARTED WITHOUT BRINGING ANY COGENT MATERIAL ON REC ORD TO SUPPORT HIS VIEW. ACCORDINGLY, WE CONFIRM THE FINDINGS OF THE L D.CIT(A). THUS, THIS GROUND OF THE REVENUE IS DISMISSED. 8. GROUND NO.2 READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 15,59,944/- MADE BY THE ASSESSING OFFICER AS UNEXPL AINED CREDITS ON ACCOUNT OF TRANSACTION WITH THE DUMMY PA RTY. 9. THE FACTS, IN BRIEF, ARE THAT THE AO REQUIRED THE A SSESSEE TO FILE DETAILS OF CERTAIN CLIENTS ACCOUNT AND FROM THESE DETAILS SUBMITTED BY THE PAGE 4 OF 7 -. I.T.A.NO. 236/IND/2009 SHRI KESHAV CHAND JAIN, BHOPAL. ASSESSEE, THE AO NOTED THAT THERE WERE HEAVY TRANSA CTIONS IN THE ACCOUNT OF M/S. NIRMAN SHARES AND COMMODITIES TRADERS, WHIC H WAS THE PROPRIETORY CONCERN OF MR.VIBHASH JAIN. HOWEVER, IN THE ABSENCE OF FULL PARTICULARS OF ITS CLIENT AND IN THE ABSENCE OF ANY RETURN BEING FILED BY THE SAID FIRM, THE AO TREATED THE NET RECEIPT FROM THIS PARTY BY THE ASSESSEE AS THE INCOME OF THE ASSESSEE U/S 68 OF THE ACT AND MA DE AN ADDITION OF RS. 15,59,944/-. AGGRIEVED BY THIS, THE ASSESSEE PREFER RED AN APPEAL BEFORE THE LD. CIT(A), WHEREIN THE ASSESSEE SUBMITTED VARI OUS DETAILS AND RELIED ON VARIOUS JUDICIAL DECISIONS. THE LD.CIT(A) CALLED THE REMAND REPORT ON THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE, WHEREIN THE AO MERELY REITERATED THAT SUCH ADDITIONAL EVIDENCE SHO ULD NOT BE ADMITTED AS THESE WERE NOT FILED IN THE COURSE OF ORIGINAL PROC EEDINGS. THE LD.CIT(A) FOUND THAT THE AO HAD NOT GIVEN ANY SUBSTANTIVE FIN DING ON THE FACT THAT M/S. NIRMAN SHARES & COMMODITIES WAS DUMMY ACCOUNT OF THE ASSESSEE ONLY. ACCORDINGLY, HE DELETED THE ADDITION. AGGRIEV ED BY THIS, THE REVENUE IS IN APPEAL BEFORE US. 10. THE LD. SR. DR PLACED STRONG RELIANCE ON THE ORDER OF THE A.O., WHEREAS THE LD. COUNSEL FOR THE ASSESSEE PLACED STR ONG RELIANCE ON THE ORDER OF THE LD. CIT(A). 11. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. PAGE 5 OF 7 -. I.T.A.NO. 236/IND/2009 SHRI KESHAV CHAND JAIN, BHOPAL. 12. IT IS NOTED THAT THAT MR. VIBHASH JAIN HAS FILED RE TURN FOR ASSESSMENT YEAR 2007-08 AND ALSO GIVEN AFFIDAVIT. I T IS ALSO NOTED THAT THE BROKERAGE CHARGES BY THE ASSESSEE FROM SUCH PERSONS HAS BEEN ASSESSED AS SUCH. WE ALSO FIND THAT IN THE REMAND REPORT, THE A O HAS NOT GIVEN ANY ADVERSE COMMENTS AGAINST THE ASSESSEE ON THE ADDITI ONAL EVIDENCE FILED BY THE ASSESSEE. THUS, TAKING INTO CONSIDERATION THESE FACTS, WE HOLD THAT THE ASSESSEE FIRM CANNOT BE TREATED AS THE BENEFICIAL O WNER OF M/S. NIRMAN SHARES & COMMODITIES. ACCORDINGLY, THIS GROUND OF THE REVENUE IS ALSO DISMISSED. 13. GROUND NO. 3 READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS. 12,20,584/- MADE ON ACCOUNT OF UNSECURED LOAN AND I NTEREST THEREON. 14. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE TOOK LOA N OF RS. 12 LAKHS FROM MR. ANISH GUPTA AND MRS. MANJU JAIN. THE ASSESSEE DID NOT FILE CONFIRMATORY LETTERS NOR ANY OTHER DETAILS WER E FILED, WHICH RESULTED INTO A VIEW BY THE ASSESSING OFFICER THAT THE ASSES SEE FAILED TO MEET THE REQUIREMENTS OF SECTION 68. ACCORDINGLY, THE AO MAD E AN ADDITION OF RS. 12 LAKHS. THE AO ALSO DISALLOWED INTEREST ON SUCH S ECURED LOAN AMOUNTING TO RS. 20,584/-. AGGRIEVED BY THIS, THE A SSESSEE PREFERRED AN PAGE 6 OF 7 -. I.T.A.NO. 236/IND/2009 SHRI KESHAV CHAND JAIN, BHOPAL. APPEAL BEFORE THE LD. CIT(A), WHEREIN IT WAS CONTEN DED THAT THE AOS VIEW THAT SUCH LENDERS WERE NOT HAVING LENDING CAPA CITY WAS MERELY A CASE OF GUESS WORK. THE ASSESSEE ALSO FILED THE CO PY OF THE ORDER SHEET TO SHOW THAT THE AO DID NOT PUT ANY QUESTION AS REGARD TO GENUINENESS OF SUCH LOAN DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. THE ASSESSEE ALSO FILED ADDITIONAL EVIDENCES SUCH AS CONFIRMATION AND SOURCES THEREOF. THE ASSESSEE ALSO PROVIDED COMPLETE ADDRESSES OF SUCH L ENDERS. THE LD.CIT(A) CALLED THE REMAND REPORT FROM THE AO AND AFTER CONS IDERING SUCH REMAND REPORT DELETED THE ADDITION. THE RELEVANT FINDINGS OF THE LD.CIT(A) ARE AS UNDER :- I HAVE CAREFULLY CONSIDERED THE ABOVE SUBMISSIONS A ND THE REPORT OF THE AO I AM NOT AT ALL IMPRESSED BY THE RECOMMENDATIONS OF THE AO IN THE FACTS AND CIRCUMST ANCES OF THE CASE. IN MY CONSIDERED VIEW, IN THE FACTS AN D CIRCUMSTANCES OF THE CASE, THE AO HAS ERRED IN TR EATING THE UNSECURED LOAN OF RS. 12,00,000/- FROM SHRI ANISH G UPTA AND SMT. MANJU JAIN AS UNEXPLAINED CASH CREDITS IN THE HANDS OF THE APPEAL. THE REFUSAL TO ADMIT THE VALID EVIDENCE FOR THE PRODUCTION OF WHICH THE APPELLANT WAS NOT G IVEN EVEN ONE DAYS TIME EVEN AT THIS STAGE WILL ONLY COMPOUND THE ERROR. AS HAS BEEN HELD BY THE APEX COURT IN THE C ASE OF PAGE 7 OF 7 -. I.T.A.NO. 236/IND/2009 SHRI KESHAV CHAND JAIN, BHOPAL. DISTRIBUTORS (BARODA) PVT.LTD. VS. UNION OF INDIA,( 1985) 155 ITR 120 ( S. C.), TO PERPETUATE AN ERROR IS NO HERO ISM. TO RECTIFY IT IS THE COMPULSION OF THE JUDICIAL CONSCI ENCE. THE IMPUGNED ADDITION OF RS. 12,20,584/- INCLUSIVE OF T HE INTEREST AMOUNTING TO RS.20,584/- IS, THEREFORE, DELETED. 15. THE LD. SR. DR PLACED STRONG RELIANCE ON THE ORDER OF THE A.O., WHEREAS THE LD. COUNSEL FOR THE ASSESSEE PLACED STR ONG RELIANCE ON THE ORDER OF THE LD. CIT(A). 16. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTANCES , WE ARE OF THE VIEW THAT THE ASSESSEE HAS DISCHARGED ITS ONUS OF PROVING THE GENUINENESS OF SUCH LOANS. HENCE, WE DO NOT FIND AN Y MERIT IN THIS GROUND OF THE REVENUE. THE SAME IS, THEREFORE, DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 29 TH JUNE, 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 29 TH JUNE, 2010. CPU* 286