ITO Ward-25 (1), V. Shashi Jain, New Delhi

ITA 2472/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8153 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 04-06-2009
• Assessment Year: 2000-2001
• Appeal Filed On: 09-07-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAGDEEP GOYAL
• Assessee Lawyers: S K GUPTA
• Keywords: Unexplained investment; Accommodation entries
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `G : NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI K.G. BANSAL ITA NO.2472/DEL./2008 (ASSESSMENT YEAR : 2000-01) ITO, WARD 25(1), VS. SMT. SHASHI JAIN, NEW DELHI. 229, TARUN ENCLAVE, PITAMPURA, NEW DELHI. (PAN/GIR NO.AADPJ9785G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.K. GUPTA, CA REVENUE BY : SHRI JAGDEEP GOYAL, SR.DR ORDER PER K.G. BANSAL, AM THIS APPEAL OF THE REVENUE EMANATES FROM THE ORDER OF THE CIT(A)-XXIV, NEW DELHI, PASSED ON 24.3.08 IN APPEAL NO.288/07-08 AND IT PERTAINS TO ASSESSMENT YEAR 2000- 01. THE ONLY GROUND TAKEN IN THE APPEAL IS THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.6.99 LAKH AND RS.2,189 MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S 68 AND THE COMMISSION PAID RESPECTIVELY, FOR THE REASON THAT THE ASSESSEE FAIL ED TO ESTABLISH THE GENUINENESS O THE TRANSACTION OF RECEIPT OF RS.6.99 LAKH FROM M/S BEM CO JEWELLERS PVT. LTD. 2. AT THE OUTSET, IT MAY BE MENTIONED THAT THE LD.C OUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE STANDS COVERED BY THE ORDER OF THE S PECIAL BENCH OF DELHI TRIBUNAL IN THE CASE OF SHRI MANOJ AGGARWAL & OTHERS IN IT(SS)A NO. 404/DEL./03 REPORTED IN 117 TTJ 145. IN PARTICULAR, RELIANCE WAS PLACED ON THE DIS CUSSION MADE IN THAT CASE IN PARAGRAPHS 67, 68 & 82. AFTER CONSIDERING THE FACTS OF THE CA SE, THE LD.TRIBUNAL HELD THAT THERE WAS NO EVIDENCE OF ANY CONSEQUENCE WHICH WAS UNEARTHED DURING THE SEARCH TO DIRECTLY SHOW THAT THE AFORESAID M/S BEMCO WAS CARRYING ON THE BU SINESS OF ACCOMMODATION ENTRIES ITA NO.2472/DEL./08 (AY : 2000-01) 2 ONLY. THIS COMPANY HAS BEEN FOUND TO HAVE HAD A SH OP AND/OR SHOWROOM AT 1182, KUCHA MAHAJANI, DELHI WHICH HAS BEEN CONFIRMED BY THE REP ORT OF SALES-TAX INSPECTOR AS ALSO BY THE RENT RECEIPTS STARTING FROM JANUARY, 1988. SHR I SUNIL KAPOOR WHO WAS AS ONE OF THE WITNESS OF THE DEPARTMENT TO SUPPORT ITS CASE THAT THE JEWELLERY BUSINESS OF THE SAID M/S BEMCO WAS BOGUS, HAS BEEN FOUND TO HAVE ACTED AS A SUB-MEDIATOR IN THE SHARE ACCOMMODATION ENTRY BUSINESS CARRIED ON BY SHRI MAN OJ AGGARWAL, THROUGH M/S FRIENDS PORTFOLIO AND THERE HAS ALSO BEEN PAID COMMISSION I N THE BUSINESS. THUS, THE SURROUNDING CIRCUMSTANCES, APART FORM DIRECT EVIDENCE IN THAT C ASE, DO NOT CONTAIN ANYTHING WHICH BELIES THE CLAIM OF SHRI MANOJ AGGARWAL THAT ALTHOU GH HIS SHARE TRANSACTION BUSINESS WAS ONLY AN ACCOMMODATION ENTRY BUSINESS FOR COMMISSION , THE JEWELLERY BUSINESS CARRIED ON BY THE SAID M/S BEMCO HAS NOT BEEN PROVED TO BE SO. THUS, GROUND NO.3 IN THAT APPEAL WAS ALLOWED AND THE APPEAL OF THE DEPARTMENT IN IT( SS)A NO.415/DEL./03 WAS DISMISSED. 3. IT WAS THE COMMON GROUND OF THE RIVAL PARTIES TH AT THE FINDINGS OF THAT ORDER ARE APPLICABLE TO THE FACTS OF THIS CASE. HOWEVER, THE CASE OF THE LD.DR WAS THAT ALL THE BUSINESSES CARRIED ON BY SHRI MANOJ AGGARWAL, WHETH ER IN RESPECT OF SHARES OR JEWELELRY, WERE MERELY ACCOMMODATION ENTRY BUSINESSES. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS MADE BEFORE US. THE REVENUE HAS NOT DOUBTED THAT THE ASSESSEE WAS HOLDI NG JEWELLERY. ITS CASE IS THAT THE JEWELLERY WAS NOT SOLD TO THE AFORESAID M/S BEMCO A ND THE CHEQUE RECEIVED BY THE ASSESSEE AS SALE PROCEEDS WAS ONLY AN ACCOMMODATION ENTRY GIVEN BY M/S BEMCO IN LIEU OF THE CASH PAID BY THE ASSESSEE TO IT. HOWEVER, T HERE IS NO EVIDENCE ON RECORD IN THIS BEHALF. FURTHER, THE FINDINGS IN THE AFORESAID CASE OF SHRI MANOJ AGGARWAL & OTHERS ARE AGAINST THE CASE OF THE REVENUE. RESPECTFULLY FOLL OWING THE AFORESAID ORDER OF THE SPECIAL BENCH OF THE DELHI TRIBUNAL, IT IS HELD THAT THERE IS NO REASON TO HOLD THAT THE CHEQUE RECEIVED BY THE ASSESSEE WAS MERELY AN ACCOMMODATIO N ENTRY. AS A CONSEQUENCE, IT IS ALSO HELD THAT THERE IS NO QUESTION OF PAYMENT OF A NY COMMISSION TO M./S BEMCO FOR OBTAINING THE ACCOMMODATION ENTRY. ITA NO.2472/DEL./08 (AY : 2000-01) 3 5. IN THE RESULT, THE APPEAL IS DISMISSED. 6. ORDER PRONOUNCED IN OPEN COURT ON 19 TH JUNE, 2009. (RAJPAL YADAV) K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: JUNE 19, 2009. *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A)-XXIV, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT