Sh. Anuj Jain, Delhi V. ITO, New Delhi

ITA 3504/DEL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52523 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 14-07-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 19-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR
• Assessee Lawyers: C S GUPTA
• Keywords: Reopening of assessment; Income from undisclosed sources; Share purchase agreement; Opportunity of being heard
• Section: 148; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A NEW DELHI) BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI B.K. HALDAR, ACCOUNTANT MEMBER I.T.A. NO.3504 /DEL/2010 ASSESSMENT YEAR : 2003-04 SHRI ANUJ JAIN, ITO, 1/10549, SHIV MANDIR GALI, WARD-34 (2), MOHAN PARK, NAVEEN SHADARA, NEW DELHI. DELHI. V. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AAJPJ AAJPJ AAJPJ AAJPJ- -- -0820 0820 0820 0820- -- -G GG G APPELLANT BY : SHRI C.S. GUPTA, C.A. RESPONDENT BY : DR. BRR KUMAR, SR. DR. ORDER PER B.K. HALDAR, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD CIT(A) XXVII, NEW DELHI DATED 27.1.2010 FOR ASSESSMENT YEAR 2 003-04. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEALS:- 1. THAT THE ADDITION OF `.201046/- U/S 68 IS WRONG, ILLE GAL, BASELESS AND UNJUSTIFIED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE LAW APPLICABLE THERETO; SINCE THERE IS NO CASH CR EDIT LIABLE TO BE TAXED U/S 68 OF THE INCOME TAX ACT, 1961. 2. THAT THE GROUND REGARDING SATISFACTORY EVIDENCE FOR B /F LONG TERM CAPITAL LOSS IS WRONG AND ILLEGAL, SINCE NECESSARY EVIDE NCES WERE DULY FURNISHED AND EVEN THIS B/F LOSS CANNOT BE TAXED I N THE YEAR UNDER CONSIDERATION. PAGE 2 OF 6 ITA NO3504/DEL/10 3. THAT THE REOPENING OF ASSESSMENT U/S 148 IS BASELESS, WRONG AND ILLEGAL. 4. THAT ANY OTHER OR FURTHER GROUND OF APPEAL MAY ALSO BE ALLOWED TO BE TAKEN AT THE TIME OF HEARING OF THE APPEAL WH ICH MAY BE DEEMED FIT AND PROPER IN THE FACTS AND CIRCUMSTANCES O F THE CASE 2. IN THIS CASE NOTICE U/S 148 OF THE ACT WAS ISSUED ON 2 0.3.2008 ON THE BASIS OF INTIMATION RECEIVED VIDE F.NO.CIT-XII/67 DATED 8.3.207 REGARDING THE RECEIPT OF `.2,08,769/- AS BOGUS ACCOMM ODATION ENTRIES ON 13.12.2002 FROM M/S ELBEE PORTFOLIO (P) LTD. DURI NG THE ASSESSMENT PROCEEDINGS, IT WAS CONTENDED BY THE ASSESSEE THAT HE HA S SOLD SOME SHARES TO M/S ELBBE PORTFOLIO (P) LTD. FOR `.2,08,769/ -AND EARNED LONG TERM CAPITAL GAIN OF `.2,01,046/-. WHEN ASKED TO SUBST ANTIATE THE CLAIM OF BROUGHT FORWARD CAPITAL LOSS BY THE ASSESSING O FFICER, THE ASSESSEE NEITHER COULD PRODUCE ANY EVIDENCE OF PURCHASE OF SHARES NOR COULD GIVE THE DETAILS OF SALE OF SUCH SHARES. IT WAS ONL Y CONTENDED THAT SHARES OF M/S SHALIMAR CRAFTS & TISSUES PVT. LTD. WERE PUR CHASED IN THE YEAR 1998-99 FOR `. 9 LAKHS. IT WAS CONTENDED THAT AS ALL SUCH SHARES WERE SOLD, THE SAME WERE NOT IN THE POSSESSION OF THE AS SESSEE. THE ASSESSEE COULD NOT PRODUCE EVEN ANY EVIDENCE FROM M/S SH ALIMAR CRAFTS & TISSUES PVT. LTD. IN SUPPORT OF ITS CLAIM. IT W AS STATED THAT THE ASSESSEE DO NOT HAVE GOOD RELATION WITH THE SAID COMPANY AND THEREFORE NO EVIDENCE COULD BE OBTAINED FROM THE SAI D COMPANY. THE ASSESSING OFFICER ALSO OBTAINED A COPY OF BANK ACCOUNT O F M/S ELBEE PORTFOLIOS P LTD. AND IT WAS NOTED BY HIM THAT AN AMO UNT OF `.2 LAKHS WAS DEPOSITED IN CASH ON 11.12.2002 BEFORE ISSUE OF CHEQ UE TO THE ASSESSEE AMOUNTING TO `.2,08,769/- ON 13.12.2002. THE A SSESSING OFFICER, THEREFORE, DISBELIEVED THE CLAIM OF THE ASSESSE E AND ASSESSED THE AMOUNT OF LONG TERM CAPITAL GAINS OF `.2,01,046/ - AS INCOME OF THE ASSESSEE U/S 68 OF THE INCOME TAX ACT, 1961. THE ASSESSING O FFICER PAGE 3 OF 6 ITA NO3504/DEL/10 ALSO DID NOT ALLOW THE SET UP OFF BROUGHT FORWARD LON G TERM CAPITAL LOSS OF `.1,94,808/- AS THE ASSESSEE FAILED TO PRODUCE ANY EV IDENCE IN SUPPORT OF THE SAME. 3. ON APPEAL, BEFORE THE LD CIT(A), THE CONTENTIONS OF THE ASSESSEE WERE AS UNDER:- A) THE RETURN FILED BY THE ASSESSEE DECLARING TOTAL INCOME OF `.1,47,995/- WAS ACCEPTED BY THE DEPARTMENT U/S 143(1 ) OF THE ACT. B) THE CASE WAS REOPENED U/S 148 VIDE ISSUE OF NOTICE DATED 20.3.2008 ON THE GROUND OF INTIMATION RECEIVED REGA RDING RECEIPT OF `.2,08,769/- FROM M/S ELBEE PORTFOLIO PVT . LTD. ON 13.12.2002. NO REASONS FOR REOPENING THE ASSESSMENT WERE PROVIDED TO THE ASSESSEE IN SPITE OF HIS REQUEST. C) ON ACCOUNT OF THE RECEIPT OF THE ABOVE AMOUNT, LONG TERM CAPITAL GAIN OF `.2,01,046/- WAS TREATED AS INCOME U/ S 68 OF THE ACT AND LONG TERM CAPITAL LOSS OF LAST YEAR WAS NOT A LLOWED TO BE SET OFF IN THE ABSENCE OF ANY EVIDENCE OF PURCHASE OF SHARES. D) THE AMOUNT OF `.2,01,046/- IN THE ORIGINAL ASSESSMENT H AS BEEN ACCEPTED AS LONG TERM CAPITAL GAIN, THE SAME CANNOT B E ASSESSED AGAIN U/S 68 OF THE ACT. E) THE BROUGHT FORWARD LONG TERM CAPITAL LOSS OF `.1,94, 808/- HAS ALREADY BEEN COMPUTED AND ASSESSED IN THE YEAR 2002-03. THE SAME WAS ON ACCOUNT OF SALE OF 9000 EQUITY SHARES OF `.1 00/- EACH OF M/S SHALIMAR CRAFTS & TISSUES PVT. LTD. AND EVID ENCE FOR SALE OF SHARES WERE DULY FURNISHED TO THE ASSESSING OFFICER . HOWEVER, EVIDENCE ISSUE OF SHARE CERTIFICATES TO THE AS SESSEE COULD NOT BE PRODUCED AS THE SAME WAS SURRENDERED FOR TRANSFER. THOUGH A REQUEST WAS MADE TO SUMMON THE PARTY U/S 131, THE ASSESSING OFFICER DID NOT DO SO. IN ANY CASE, LONG TERM PAGE 4 OF 6 ITA NO3504/DEL/10 CAPITAL LOSS HAS ALREADY BEEN DETERMINED IN ASSESSMENT YE AR 2002-03, THE SAME COULD NOT HAVE BEEN DISALLOWED IN ASSESSMENT YEAR 2003-04. F) THE ASSESSMENT WAS FRAMED WITHOUT GIVING PROPER OPPORTUN ITY TO THE ASSESSEE. G) AS IMPUGNED AMOUNT HAS BEEN CREDITED IN THE BANK ACC OUNT OF THE ASSESSEE THROUGH CHEQUE AND PROPER EXPLANATION HAS BEEN OFFERED BY THE ASSESSEE, THE AMOUNT COULD NOT HAVE BEE N ASSESSED U/S 68 OF THE ACT. 4. VARIOUS CASE LAWS WERE RELIED ON BY THE ASSESSEE AS ARE ENUMERATED IN PAGES 11 TO 13 OF THE LD CIT(A)S ORDER . THE LD CIT(A), HOWEVER, AGREED WITH THE FINDING OF THE ASSESSING OFFIC ER AND CONFIRMED HIS ORDER BY HOLDING AS UNDER:- I HAVE CAREFULLY GONE THROUGH THE SUBMISSIONS MADE BY THE APPELLANT AS WELL AS THE FINDINGS OF THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS ASSESSED THE SUM OF `.2,01,046/- AS INCOME U/S68. THE FACT AS ADMITTED IS THAT THE AMOUNT RECEIVED BY THE ASSESSEE AMOUNTING TO `.2,08,769/- IS STATED TO BE THE SALE PROCEEDS OF THE SH ARES. THE SAME IS STATED TO BE RECEIVED VIDE CHEQUE NO.38296 6 DATED 13.12.2002. SINCE THE EVIDENCE RELATING TO L ONG TERM CAPITAL LOSS FURNISHED BY THE ASSESSEE IS NOT SATISFACTORY, THE ASSESSING OFFICER HAS NEGATED THE SAME. I AM IN AGREEMENT WITH THE FINDINGS OF THE ASSESSING OFFIC ER IN THE SUBJECT. THE ASSESSEE CANNOT RELATE THE PROCEED S OF RECEIPT OF INCOME TO THE SHARE TRANSACTIONS OF THE EA RLIER PERIOD WITHOUT BRINGING ON RECORD SUFFICIENT PROOF T O JUSTIFY THE SAME. THEREFORE, THE ASSESSING OFFICER WAS RIGHT IN TREATING A SUM OF `.2,01,046/- BEING THE DIFFERENTIA L FIGURE PAGE 5 OF 6 ITA NO3504/DEL/10 AS ASSESSEES INCOME FROM UNDISCLOSED SOURCES AND IS RIGHTFULLY ADDED U/S 68 OF THE ACT. THE SAID ADDITIO N IS RELATING TO THE INCOME FOR THE ASSESSMENT YEAR 2003-04 AND IS ACCORDINGLY CONFIRMED. 5. AGGRIEVED, THE ASSESSEE HAS FILED APPEAL BEFORE US 6. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THE LD CIT(A) HAS NOT ADJUDICATED THE GROUNDS RAISED BY THE APPELLAN T BEFORE HIM AS IS EVIDENT FROM THE IMPUGNED ORDER. HE HAS ALSO NOT G IVEN ANY COGENT REASON FOR CONFIRMING THE ADDITION OF `.2,01,046/- A S INCOME U/S 68 OF THE ACT AND DISALLOWANCE OF BROUGHT FORWARD CAPITAL LOSS OF `.1,94,808/- . THERE IS NO ADJUDICATION ON THE ISSUE OF VALIDITY OF REOPENING U/S 148 OF THE ACT. IN THIS VIEW OF THE MATTER, WE SET ASIDE T HE IMPUGNED ORDER OF LD CIT(A) AND REMIT THE MATTER BACK TO HIS FILE W ITH THE DIRECTION THAT A SPEAKING ORDER AS PER LAW BE PASSED AFTER GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. 8. ORDER PRONOUNCED IN THE OPEN COURT ON THE 5 TH DAY OF AUG., 2011. SD/- SD/- (R.P. TOLANI) (B.K. HAL DAR) JUDICIAL MEMBER ACCOUNTANT MEMBER 28/07/2011 DT. 05.08.2011. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. (ITAT, NEW DELHI). PAGE 6 OF 6 ITA NO3504/DEL/10 DATE OF HEARING 14/7/2011 DATE OF DICTATION DATE OF ORDER SIGNED BY THE HON'BLE MEMBER. 28/7/2011 DATE OF ORDER SENT TO THE CONCERNED BENCH 10/8/2011