DCIT Circle-39 (1), New Delhi V. Arun Kumar Jain, New Delhi

ITA 2839/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8159 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-06-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 03-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S SAHATA
• Assessee Lawyers: H P AGGARWAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA : VICE PRESIDENT; A ND SRI AKASH DEEP JAIN : JUDICIAL MEMBER ITA NO. 2839/DEL/08 ASSTT. YR: 2005-06 DCIT CIRCLE 39(1), VS. ARUN KUMAR JAIN, CIR. 39(1), NEW DELHI. 4415/14, GALI LOTAN JAT, PAHARI DHIRAJ, SADAR BAZAR, DELHI. PAN/GIR NO. AEAPJ3511L ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI G.S. SAHATA SR. DR RESPONDENT BY : SHRI H.P. AGGARWAL CA O R D E R PER G.E. VEERABHADRAPPA, V.P: THIS APPEAL, BY THE REVENUE, ARISES OUT OF THE ORDE R DATED 27-6-2008 OF THE CIT(A)-XXVII, NEW DELHI, FOR A.Y. 2005-06. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS: 1. LD. CIT(A) HAS ERRED IN LAW AND FACTS WHILE DEL ETING THE ADDITION OF RS. 13,23,249/- HOLDING THAT THE INCOME CANNOT B E ATTRIBUTED TO THE ASSESSEE MERELY BECAUSE OF SOME PROCEDURAL LAPS ES IGNORING THE FACT THAT IN THE ABSENCE OF CONTRACT NOTES IT W AS NOT POSSIBLE TO ASCERTAIN AS EXECUTED ON THE NATIONAL STOCK EXCHANG E OR NOT. 2. LD. CIT(A) HAS ERRED IN LAW AND FACTS WHILE DELE TING THE ADDITION OF RS. 13,23,249/- HOLDING THAT NO FACTS HAVE BEEN BROUGHT ON RECORD TO ESTABLISH THAT THE EXPLANATION OFFERED BY THE ASSESSEE WAS UNREASONABLE OR FANCIFUL IGNORING THE FACT THAT THE STT (SERVICE TRANSACTION TAX) CERTIFICATE ENCLOSED AS PROFORMA N O. 10DB IS IN THE NAME OF ARUN KUMAR & CO. AND AS PER SEBI REGULA TIONS, THE 2 PERSONS IN WHOSE NAME THE TRANSACTIONS ARE EXECUTED AND IN RESPECT OF WHOM STT HAS BEEN PAID HAS TO BE REGARDED AS TH E EXECUTANTS OF THE TRANSACTIONS AND THESE TRANSACTIONS CANNOT B E DIVERTED OR REROUTED IN THE OTHER PERSONS NAME. 3. LD. CIT(A) HAS ERRED IN LAW AND FACTS WHILE DELE TING THE ADDITION OF RS. 13,23,249/- IGNORING THE FACT THAT THE ASSES SEE HAD NOT USED UNIQUE CLIENT CODE FOR HIS CLIENTS WHICH IS MANDATO RY FOR ALL BROKERS OR SUB-BROKERS AS PER SEBI REGULATION, 1992 . 3. ALL THE GROUNDS RELATE TO AN ADDITION OF RS. 13, 23,249/- EARNED BY DIFFERENT PARTIES FROM SHARE TRANSACTIONS, HELD TO BE ASSESSABLE IN THE HANDS OF THE ASSESSEE. 4. WE HAVE HEARD BOTH THE REVENUE AND THE ASSESSEE . THE LEARNED DR STRONGLY RELIED UPON THE DISCUSSIONS IN THE ASSESSM ENT ORDER AND PLEADED THAT THE ASSESSEE WAS APPARENTLY ATTRIBUTING THE TRANSAC TIONS DONE BY HIM IN HIS OWN CODE THROUGH DIFFERENT BROKERS TO VARIOUS PERSO NS/ CLIENTS. LETTERS OF INQUIRY INTO THE TRANSACTIONS WERE SENT. THE DISCUS SIONS IN THE ASSESSMENT ORDER ON THIS ASPECT CLEARLY REVEALS THAT ALL THESE TRANSACTIONS ARE OF THE ASSESSEE AND THE ASSESSEE REQUIRED TO BE ASSESSED I N RESPECT OF THOSE INCOMES. 5. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTH ER HAND, POINTED OUT THAT THE ASSESSEE CARRIED OUT THE BUSINESS TRANSACT IONS WITH VARIOUS CLIENTS IN THE NORMAL COURSE OF BUSINESS. THE INVESTMENTS WERE MADE BY THE CLIENTS AND THE PROFIT/ LOSS, IF ANY, ARISING OUT OF THOSE TRAN SACTIONS WERE DEBITED/ CREDITED TO THEIR ACCOUNTS AND THESE PROFITS/ LOSSE S WERE RETURNED BY THOSE 3 CLIENTS IN THEIR RESPECTIVE INCOME TAX RETURNS. THE ASSESSEE FILED ALL THE DETAILS, INCLUDING, PAN NUMBER; LEDGER ACCOUNT OF THE PARTIES; AND BANK STATEMENT TO PROVE THE IDENTITY, MODE OF TRANSACTIO N AND CAPACITY OF THE PARTIES. THE ADDITION CANNOT BE MADE IN THE HANDS O F THE ASSESSEE. THE ASSESSEES COUNSEL RELIED UPON THE DISCUSSIONS MADE IN THE ORDER OF CIT(A). 6. WE HAVE GONE THROUGH THE RECORDS INCLUDING THE D ISCUSSIONS MADE IN THE IMPUGNED ORDER. THE PERSONS WITH WHOM THE ASSES SEE HAD BUSINESS DEALINGS HAVE CONFIRMED THESE TRANSACTIONS IN THE C OURSE OF INQUIRY CONDUCTED BY THE AO AND IN THE LIGHT OF THIS IT CAN NOT BE SAID THAT THE TRANSACTIONS OF THE THIRD PARTY BELONGED TO THE ASS ESSEE. IN OUR CONSIDERED OPINION, THE LEARNED CIT(A) HAS CORRECTLY DELETED T HE ADDITION. WE FIND NO MERIT IN THE CONTENTION OF THE DEPARTMENT TO INTERF ERE. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON _______-6-2009. ( AKASH DEEP JAIN ) ( G.E. VEERABHADRA PPA ) JUDICIAL MEMBER VICE PRESIDENT DATED: ____-06-2009. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR 4