Smt. Manjari Gupta, New Delhi V. ITO, New Delhi

ITA 3125/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3944 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 29-04-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 23-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: RAKESH KR GUPTA
• Section: 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E NEW DELHI) BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER I.T.A. NO.3125/DEL/2010 ASSESSMENT YEAR : 2001-02 SMT. MANJARI GUPTA, VS. INCOME TAX OFFICER, C/O MITTAL CONSUL & CO., CA WARD 25(1), 1626/33, 2 ND FLOOR, NAIWALA NEW DELHI KAROL BAGH, NEW DELHI PAN NO.AGQPG 19525 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH KR. GUPTA, FCA RESPONDENT BY : MS. Y. KAKKAR, SR. DR ORDER PER K.G. BANSAL, AM: IN THIS CASE, THE ASSESSING OFFICER RECEIVED INTIMATION FR OM THE INVESTIGATING WING THAT THE ASSESSEE RECEIVED AN ACCOMMODATION ENTRY OF ` 2 LACS ON 17.04.2000 FROM SHRI RAJ KUMAR AGGARWAL, WHO MAINTAINED BANK ACC OUNT NO.11125 WITH JAI LAXMI COOPERATIVE BANK, FATEHPURI, DELHI. THE ENTRY WAS PROVIDED BY WAY OF CHEQUE NO.120174, WHICH WAS DEPOSITED BY THE ASSESSEE IN HER BANK ACCOUNT MAINTAINED WITH ANDHRA BANK, LAWRENCE ROAD, DELHI. THER EFORE, REASONS WERE RECORDED AND A NOTICE U/S 148 WAS SERVED ON THE ASSESSEE O N 29.03.2008. ASSESSMENT PROCEEDINGS WERE INITIATED BY ISSUING STATUTORY NOTICES. IT WAS SUBMITTED THAT THE ASSESSEE RECEIVED AN ADVANCE PAYMENT OF `2 LACS FROM SHRI RAJ KUMAR AGGARWAL AS EARNEST MONEY IN RESPECT OF SALE OF A PLOT OF LAND. A COPY OF THE AGREEMENT TO SELL THE LAND WAS ALSO FILED. IT WAS FUR THER SUBMITTED THAT THE DEAL DID NOT MATERIALIZE AND, THEREFORE, IT WAS CANCELLED. THE EARNEST MONEY WAS 2 FORFEITED IN TERMS OF THE AGREEMENT FOR SALE. THE ASSESSIN G OFFICER SOUGHT TO VERIFY THE VERSION OF THE ASSESSEE BY ISSUING SUMMONS TO THE INT ENDING BUYER, SHRI RAJ KUMAR AGGARWAL. THE POSTAL AUTHORITIES INFORMED THAT THE ADDRESS IS WRONG. THIS FACT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE, AND SHE WA S ASKED TO PRODUCE SHRI RAJ KUMAR AGGARWAL FOR VERIFICATION OF THE TRANSACTIO N. HOWEVER, HE COULD NOT BE PRODUCED IN SPITE OF VARIOUS OPPORTUNITIES GRANTED TO H ER. ON THE FACTS, THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE TRANS ACTION APPEARS TO BE DUBIOUS AND THE ASSESSEE HAS FAILED TO PROVE THE NATURE AND SOURCE O F CREDIT IN HER BANK ACCOUNT, THEREFORE, THIS AMOUNT WAS ADDED TO THE TOTAL I NCOME, WHICH WAS COMPUTED AT `3,66,660/-. 1.1 AGGRIEVED BY THIS ORDER, THE ASSESSEE MOVED AN APPEAL B EFORE THE CIT(A)- XXIV, NEW DELHI, WHO DISPOSED OFF THE APPEAL ON 16.03.20 10 IN APPEAL NO.392/08-09. THE ASSESSEE CHALLENGED THE ISSUANCE OF NOTI CE U/S 148 AS WELL AS THE ADDITION OF `2 LACS MADE IN THE ASSESSMENT. THE APPEA L WAS DISMISSED. IN SO FAR AS THE MERITS ARE CONCERNED, IT WAS HELD THAT THE ASSES SING OFFICER CONSIDERED THE WHOLE OF THE EVIDENCE SUBMITTED BEFORE HIM. THE ASSESS EE DID NOT FURNISH ANY RELIABLE EVIDENCE TO PROVE EXISTENCE AND CREDITWORTHINESS OF SH RI RAJ KUMAR AGGARWAL OR THAT HE WAS IN A POSITION TO PURCHASE THE PROPERTY. THEREFORE, TAKING ALL THE CIRCUMSTANCES INTO ACCOUNT, THE ADDITION WAS U PHELD BY MAKING THE FOLLOWING REMARKS:- 5.6 IN VIEWS OF ABOVE, THE INGREDIENT OF THE ONUS LAY ON THE ASSESSEE U/S 68 DOES NOT GET DISCHARGED. THE HONBLE APEX C OURT IN THE ABOVE NOTED JUDGMENT HAS EMPHASIZED THAT THE RATIONAL OF THE REASONING GIVEN BY THE ASSESSING OFFICER FOR REJECTING T HE EXPLANATION CAN BE ENQUIRED INTO BY THE APPELLATE AUTHORITIES TO SEE WHET HER REJECTION OF EXPLANATION HAS ANY NEXUS WITH THE EXPLANAT ION OFFERED BY THE ASSESSEE. THE ASSESSING OFFICER CONSIDERED ALL THE EVI DENCES SUBMITTED BEFORE HIM DURING THE COURSE OF ASSESSMENT PROCEED INGS AND ONLY AFTER SUCH CONSIDERATION HE REJECTED THE EXPLANAT ION OFFERED BY THE ASSESSEE. HENCE, THE JUDGMENT OF THE HONBLE APEX COUR T THAT 3 REJECTION OF THE EXPLANATION ITSELF IS THE PRIMA FACIE EV IDENCE AGAINST THE ASSESSEE, WHICH NEEDS TO BE REBUTTED TO AVOID ADDITION; COMES INTO PICTURE. THE APPELLANT HAS FURNISHED NO WORTHY M ATERIAL TO PROVE THE EXISTENCE AND CREDITWORTHINESS OF SAID PURCHASES IN RES PECT OF THE TRANSACTION IN QUESTION AND THERE IS NO REBUTTAL ON THE BASIS OF THE MATERIAL ON RECORD. I HAVE ASKED THE APPELLANT TO PRODUC E THAT PERSON BEFORE ME OR GIVE RE-CONFIRMATION AS ON DATE, BUT IN VAIN. HENCE, THE REBUTTAL OF THE EVIDENCE, WHICH ACCORDING TO TH E HONBLE APEX COURT COMES INTO EXISTENCE AS A RESULT OF REJECTION O F EXPLANATION, IS NOT THERE ON RECORD BY VIRTUE OF FAILURE OF THE ASSESSEE TO FURNISH THE SAME DESPITE HAVING BEEN ASKED TO DO SO D URING THE APPELLATE PROCEEDINGS. 5.7 IN THE NUTSHELL, UNDER THE PREVAILING CIRCUMSTANCES, NEITHER THE SELLER FOUND IN EXISTENCE AT THE ADDRESS, AS THAT ADDRESS I S BOGUS NOR THE CREDIBILITY OF THAT PERSON HAVING ESTABLISHED FOR MA KING PAYMENT, THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER IS T HEREBY SUSTAINED. THEREFORE, THE GROUNDS NUMBERED 1 TO 5 ARE HEREB Y DISMISSED. 1.2 AGGRIEVED BY THIS ORDER, THE ASSESSEE HAS FILED AN APPEA L BEFORE US IN WHICH THE VALIDITY OF THE NOTICE AS WELL AS THE ADDITION HAVE BEEN CHALLENGED. 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE OR IGINAL RETURN WAS FILED ON 31.07.2001, WHICH WAS PROCESSED U/S 143(1). THEREAFTER, THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE INVESTIGATING WING, ON THE BASIS OF WHICH REASONS WERE RECORDED AND NOTICE U/S 148 WAS ISSUED. THE A SSESSEE FILED RETURN U/S 148 ON 29.03.2008. THE REAL CONTROVERSY IN THIS C ASE REVOLVES AROUND THE RECEIPT OF `2 LACS BY THE ASSESSEE FROM SHRI R.K. AGGARWAL AGAINST AGREEMENT TO SELL AN INDUSTRIAL PLOT OF LAND. HE DREW OUR ATTENTION TO PAGE 9 OF THE PAPER BOOK, WHICH SHOWS THAT THE ASSESSEE HAD ENTERED INTO AN AGREEMENT OF PURCHASE OF THE SAID PLOT OF LAND FROM SHRI PAWAN JAIN ON 18.05.1999 FOR A SUM OF `4 LACS. THEREAFTER, HE DREW OUR ATTENTION TO PAGE NO.7 OF THE PAPER BOOK WHICH IS AN 4 AGREEMENT TO SELL THE SAID PLOT OF LAND BY THE ASSESSEE TO SHRI RAJ KUMAR AGGARWAL, EXECUTED ON 14.04.2000, FOR A SUM OF `8 LACS. AS PER C LAUSE 1 OF THE AGREEMENT, A SUM OF `2 LACS WAS RECEIVED BY THE ASSESSEE AT THE TIME OF THE EXECUTION OF THE AGREEMENT BY WAY OF CHEQUE, THE DETAILS OF WHICH HAVE ALREA DY BEEN MENTIONED BY US. THE BALANCE AMOUNT OF `6 LACS WAS PAYABLE IN T WO INSTALMENTS, `4 LACS WITHIN 30 DAYS OF THE EXECUTION OF THE AGREEMENT AND `2 L ACS WITHIN 60 DAYS OF THE EXECUTION OF THE AGREEMENT. CLAUSE (III) OF THE AGREEMENT P ROVIDES THAT IF THE BUYER FAILS TO PAY THE BALANCE AMOUNT OF `6 LACS WITHIN TH E PRESCRIBED DATES, THE ASSESSEE WILL FORFEIT THE AMOUNT ALREADY RECEIVED AND THE BUYER OR H IS LEGAL HEIRS WILL HAVE NO RIGHT IN THE PROPERTY. IT IS FURTHER SUBMITTED THAT BO TH THE AGREEMENTS HAVE BEEN DULY EXECUTED AND WITNESSED. IN SUCH CIRCUMSTANCES, THERE WAS N O REASON FOR THE ASSESSING OFFICER TO ADD THE AMOUNT OF `2 LACS RECEIVED A S ADVANCE, TO THE TOTAL INCOME OF THE ASSESSEE. 2.1 IN REPLY, THE LEARNED DR REFERRED TO THE FINDING OF TH E ASSESSING OFFICER AND IN PARTICULAR MENTIONED THAT THE BUYER IS NOT TRACEABLE AND THE ASSESSEE HAS FAILED TO PRODUCE THE BUYER BEFORE THE ASSESSING OFFICER AND THE LEARNED CIT(A) IN SPITE OF OPPORTUNITIES GRANTED TO HER. SHE REFERRED TO THE COPY OF T HE BANK ACCOUNT OF THE ASSESSEE WITH M/S GANGA POLYMER IN WHICH A SUM OF `2LAC S WAS CREDITED ON 01.09.2000. IT IS SUBMITTED THAT THIS DATE DOES NOT T ALLY WITH THE DATE OF CREDITED OF `2 LACS IN THE BANK ACCOUNT OF THE ASSESSEE. IT IS FURT HER SUBMITTED THAT IN A CASE LIKE THIS, EVEN THE CIRCUMSTANTIAL EVIDENCE HAS TO BE TAKEN INTO ACCOUNT, AS MENTIONED BY THE LEARNED CIT(A). THE REASON IS THAT THE PROCEEDINGS ARE OF CIVIL NATURE. THEREFORE, IT IS AGITATED THAT THE ORDERS OF THE LOWER AUTH ORITIES MAY BE UPHELD. 3. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSION S MADE BEFORE US. THE FACTS ARE THAT THE BANK ACCOUNT OF THE ASSESSEE CONT AINED A CREDIT OF `2 LACS 5 ALLEGEDLY AN ACCOMMODATION ENTRY RECEIVED FROM SHRI RAJ KU MAR AGGARWAL. IT HAS BEEN EXPLAINED THAT THE ASSESSEE OWNED AN INDUSTRIAL PLOT, W HICH WAS PURCHASED FROM SHRI PAWAN JAIN ON 18.05.1999 FOR A SUM OF `4 L ACS. THERE IS NO DISPUTE ABOUT THIS FACT. IT HAS BEEN FURTHER EXPLAINED THAT THE SAID P LOT HAD BEEN AGREED TO BE SOLD TO SHRI RAJ KUMAR AGGARWAL ON 14.04.2000 FOR A SUM OF `8 LACS. THIS AGREEMENT HAS BEEN DRAWN ON A STAMP PAPER OF `2/-. THE A GREEMENT HAS BEEN SIGNED BY BOTH THE PARTIES AND WITNESSED BY ONE PERSON, WH OSE ADDRESS IS AVAILABLE. ON THE EXECUTION OF THIS AGREEMENT, A CHEQUE OF `2 LACS WAS RECEIVED, WHICH WAS DEPOSITED IN THE BANK ACCOUNT. THE SUBSEQUENT USE OF THIS MONEY IS NOT A MATTER OF DISPUTE, ALTHOUGH THE LEARNED DR HAS MENTIONED ABOUT THE TRANSFER OF MONEY FROM THE BANK ACCOUNT TO M/S GANGA POLYMER. TH E FURTHER FACTS ARE THAT THE ADDRESS OF SHRI RAJ KUMAR AGGARWAL WAS REPORTED TO BE NO N-EXISTENT BY THE POSTAL AUTHORITIES. THE ASSESSEE ALSO FAILED TO PRODUCE SHRI RAJ KUMAR AGGARWAL BEFORE THE ASSESSING OFFICER. WE ARE OF THE VIEW THAT SUCH FAILU RE DOES NOT LEAD TO AN INFERENCE THAT THE NATURE AND SOURCE OF MONEY REMAINS UNEX PLAINED. THE REASON IS THAT THE AGREEMENT TO SELL THE PLOT OF LAND HAD BEEN FILED, WHICH HAD BEEN NOTARIZED ON 14.04.2000. THEREFORE, THE EXISTENCE OF SHRI RAJ KUMAR AGGARWAL CANNOT BE DENIED. THIS CONCLUSION ALSO EMERGES FROM THE FACT THAT THE AGREEMENT HAS BEEN WITNESSED BY ONE PERSON, NAGENDER SINGH. THEREFORE, WE ARE OF THE VIEW THAT THE LOWER AUTHORITIES SHOULD HAVE ACCEPTED THE EXPLANATION OF THE ASSESSEE OR SHOULD HAVE EXAMINED THE WITNESS OR THE NOTARY IN ABSENCE OF SHRI R AJ KUMAR AGGARWAL. IN ABSENCE THEREOF, IT IS HELD THAT THE ADDITION MADE BY THE L EARNED CIT(A) WAS NOT JUSTIFIED. 4. AS THE MATTER HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE O N MERITS, AND THE LEARNED COUNSEL DID NOT ARGUE THE GROUND REGARDING VALIDI TY OF THE ISSUANCE OF NOTICE U/S 148, IT IS HELD THAT THE GROUND HAS BECOME I NFRUCTUOUS. 6 5. IN RESULT, THE APPEAL IS ALLOWED AS INDICATED ABOVE. ORDER WAS PRONOUNCED IN OPEN COURT ON 13.05.2011. SD/- SD/- ( I.P. BANSAL ) ( K.G. BANSAL ) JUDICIAL MEMBER ACCOUNTA NT MEMBER NS DT.13.05.2011. COPY FORWARDED TO:- 1. SMT. MANJARI GUPTA, C/O MITTAL CONSUL & CO. CA, 1626 /33, 2 ND FLOOR, NAIWALA KAROL BAGH, NEW DELHI. 2. INCOME TAX OFFICER, WARD 25(1), NEW DELHI. 3. THE RESPONDENT 4. THE CIT 5. THE CIT (A)-, NEW DELHI. 6. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. BY ORDER (ITAT, NEW DELHI).