DCIT, New Delhi V. M/s Neha Jewellers Pvt. Ltd., New Delhi

ITA 360/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59059 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 22-03-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 20-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S NEGISR
• Assessee Lawyers: S P A GARWAL
• Keywords: Unexplained cash credit; Accommodation entries
• Section: 153A; 147; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI. BEFORE SHRI I.P. BANSAL AND SHRI K.G. BANSAL I.T.A. NO.360(DEL)/2011 ASSESSMENT YEAR: 2001-02 DEPUTY COMMISSIONER OF N EHA JEWELLERS PVT. LTD., INCOME-TAX, CENTRAL CIRCLE 12, VS. 117 0, KUCHA MAHAJANI, JHANDEWALAN EXTENSION, CHANDNI CHOWK, DELHI. NEW DELHI. PAN: AAACN 7129G (APPLICANT) (RESPONDENT) APPELLANT BY : SHRI R.S. NEGI,SR. DR RESPONDENT BY : SH RI S.P. AGARWAL, C.A. DATE OF HEARIN G: 22.03.2012 DATE OF PRONOUN CEMENT: 30.03.2012. ORDER PER K.G. BANSAL : A.M THE REVENUE HAS TAKEN UP FIVE GROUNDS IN THE APPEA L. IN THE COURSE OF HEARING BEFORE US, THE LD. CIT, DR EXPLAINED T HAT ONLY GROUND NO. 2 IS MATERIAL. THIS GROUND IS TO THE EFFECT THAT THE LD. CIT(APPEALS) ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF BOGUS ACCOMMODATION ENTRIES AMOUNTING TO RS. 33,8 1,643/-. 2. BRIEFLY, THE FACTS ARE THAT THE AO RECEIVED INFORMATION FROM THE INVESTIGATION WING THAT THE ASSESSEE HAS OBTAINED ACCOMMODATION ENTRIES FROM MEENABHAG CHANDKA BY WAY OF THREE C HEQUES WITH AGGREGATE ITA NO. 360(DEL)/2011 2 AMOUNT OF RS. 25.00 LAKH. ACTING ON THIS INFORMA TION, NOTICE U/S 147 WAS ISSUED. THE ASSESSEE REQUESTED FOR THE REASON F OR REOPENING THE ASSESSMENT, WHICH WAS SUPPLIED TO IT. IN THE COUR SE OF HEARING IT WAS FOUND THAT THE ASSESSEE HAD SHOWN SALE OF JEWELLERY AMOUNTING TO RS. 33,81,643/- TO MEENABHAG CHANDKA, REFLECTED IN THE BOOKS OF ACCOUNT BY WAY OF 8 SALE BILLS. THE PAYMENTS WERE ALSO R ECEIVED BY ACCOUNT PAYEE CHEQUES. THE BUYER WAS SUMMONED THRICE U/S 131 O F THE ACT BUT SHE DID NOT APPEAR. HOWEVER, SHRI J.C. VERMA, CHARTERED ACCOUNTANT, CLAIMING TO BE HER AUTHORIZED REPRESENTATIVE, FURNISHED VA RIOUS DETAILS CONFIRMING THE PURCHASE OF JEWELLERY. THE AO WAS ALSO INF ORMED THAT IT IS NOT PLAUSIBLE FOR HER TO APPEAR AS SHE WAS OUT OF T OWN. THE CASE OF THE AO WAS THAT THE BUYER HAD NOT APPEARED PERSONALLY A ND SHE HAS NOT PRODUCED HER RETURN OF NET WEALTH. THUS, HER CREDITWORTHI NESS CANNOT BE ACCEPTED. HER INCOME-TAX RETURN SHOWS THAT THE TOTAL INCO ME WAS ABOUT RS. 1,20,920/-. THIS STRENGTHENED THE VIEW THAT SHE HAS ONLY FURNISHED ACCOMMODATION ENTRIES. THEREFORE, THE AMOUNT OF RS. 33,81,643/- WAS ADDED TO HER TOTAL INCOME. 2.1 THE LD. CIT(APPEALS) DELETED THE ADDITION INTER-ALIA BY MENTIONING THAT THE CLAIM OF SALE HAS BEEN DULY SUPPORTED BY PRODUCTION OF SALE BILLS, ITA NO. 360(DEL)/2011 3 ACCOUNT OF MEENABHAG CHANDKA AND THE BANK STATEME NT. THE ENTIRE SUM HAS BEEN DECLARED AS SALES BY THE ASSESSEE AND ASSESSED AS INCOME. THEREFORE, NO FURTHER ADDITION CAN BE MADE IN TH E HANDS OF THE ASSESSEE. 2.2 BEFORE US, THE LD. SENIOR DR REFERRED TO THE FINDINGS OF THE AO AND THE LD. CIT(APPEALS). HE DREW OUR ATTENTION TO SO ME PAPERS PLACED IN THE PAPER BOOK. PAGE NO. 3 IS THE WRITTEN REPLY OF THE ASSESSEE DATED 04.10.2010 SUBMITTED TO THE LD. CIT(APPEALS), W HICH INTER-ALIA SHOWS SALES ON EIGHT OCCASIONS BETWEEN 22.09.2000 AN D 24.10.2000, AND CHARGES OF RS. 13,544/- RAISED ON 13.10.2000 AS RE-MAKING CHARGES. THE PAYMENTS RECEIVED HAVE ALSO BEEN SHOWN AND THE SUM HAS BEEN PAID ON FOUR OCCASIONS BETWEEN 10.10.2000 AND 06.11.200 0. PAGE NO. 16 IS THE REPLY FROM SHRI J.C. VERMA, C.A. DATED 26.12.2008 TO THE AO MENTIONING INTER-ALIA THAT MEENABHAG CHANDKA IS ASSESSED IN CENTRAL CIRCLE 8, AND IN THE COURSE OF ASSESSMENT SHE HAS FILED DETAILS REGARDING PURCHASE OF JEWELLERY. PAGE NO. 18 IS ALSO A WRITTEN REPLY DATED 19.12.2008 BY SHRI J.C. VERMA TO THE AO STATING INTER-ALIA THA T SUMMONS U/S 131 HAD BEEN RE-DIRECTED TO HER BY HER RELATIVE AT THE OFFICE ADDRESS AT 12.30 PM. THEREFORE, IT WILL NOT BE POSSIBLE TO ATTEND FOR PERSONAL DEPOSITION AT 11.30 A.M. PAGE NO. 23 IS THE BANK ACCOUNT OF THE PURC HASER SHOWING ONLY FOUR ITA NO. 360(DEL)/2011 4 ENTRIES. THE CASE OF THE SENIOR DR IS THAT THER E IS NO EVIDENCE THAT SHRI J.C. VERMA IS THE AUTHORIZED REPRESENTATIVE, THAT SUMMONS ISSUED TO HER HAD TO BE RE-DIRECTED WHICH CREATES DOUBT, COMPLE TE BANK ACCOUNT HAD NOT BEEN FURNISHED SO THAT OPENING BALANCE COULD BE VE RIFIED AND FIRST PAYMENT OF RS. 10.00 LAKH HAS BEEN MADE BY HER ON 10.10. 2000 BY WHICH TIME SALES WORTH RS. 28,49,297/- HAD ALREADY BEEN MADE . ALL THESE CIRCUMSTANCES DO LEAD TO AN INFERENCE THAT SHE W AS ONLY FURNISHING ACCOMMODATION ENTRIES. 2.3 IN REPLY, THE LD. COUNSEL RELIED ON THE O RDER OF THE LD. CIT(APPEALS). 3. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. WE FIND THAT THE CRUCIAL FLAW IN T HE CASE OF THE REVENUE IS THAT AFTER HAVING INCLUDED PROCEEDS OF RS. 33,81,643/- IN SALES, THE SAME AMOUNT HAS BEEN TAXED AGAIN AS UNEXPLAINED C ASH CREDIT. THESE ARE CONTRADICTORY FINDINGS. ALTHOUGH THE EVIDENCE IN TOTALITY IS IN FAVOUR OF THE ASSESSEE, IT MAY BE MENTIONED THAT IF THE REC EIPTS AGGREGATING TO RS. 33,81,643/- REPRESENT UNEXPLAINED CASH CREDIT, THE CORRESPONDING EFFECT SHOULD HAVE BEEN GIVEN IN THE TRADING ACCOUNT BY REDUCING THE SAME. ITA NO. 360(DEL)/2011 5 FURTHER, THE EVIDENCE ON RECORD PRODUCED FROM MEE NABHAG CHANDKA IS SOUGHT TO BE REBUTTED ON FRIVOLOUS OBJECTIONS A GAINST THE FACT THAT SHE HAS BEEN SEARCHED AND ASSESSED U/S 153A AND DURIN G THE COURSE OF ASSESSMENT SHE HAS FURNISHED THE SAME DETAILS T O HER AO. IN VIEW OF THE AFORESAID, WE ARE OF THE VIEW THAT NO INTERFERE NCE IS CALLED FOR IN THE IMPUGNED ORDER. 4. IN THE RESULT, THE APPEAL IS DISMISSED. SD/- SD/- (I.P. BANSAL) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA COPY OF THE ORDER FORWARDED TO:- NEHA JEWELLERS PVT. LTD., NEW DELHI. DCIT, CENTRAL CIRCLE-12, NEW DELHI. CIT(A) CIT, THE D.R., ITAT, NEW DELHI. ASSISTANT REGISTRAR. ITA NO. 360(DEL)/2011 6