DCIT, Agra V. Smt. Sunita Agarwal, Agra

ITA 40/AGR/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6951 (ITAT-AGRA)
• Duration Of Justice: 2 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-06-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 11-02-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HOMI RAJVANSH
• Keywords: Unexplained cash credit; Gift; Share purchase agreement; Onus to prove; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO.40/AGR/2009 ASST. YEAR: 2003-04 DY. COMMISSIONER OF INCOME TAX, VS. SMT. SUNITA AG ARWAL, CENTRAL CIRCLE, AGRA. 30/121, AZAD GALI, JOHRI BAZAR, AGRA. (PAN : ABZPA 1228 J) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HOMI RAJ VANSH, C.I.T. (D.R.) RESPONDENT BY : NONE ORDER PER H.S. SIDHU, J.M. : THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E IMPUGNED ORDER DATED 26.11.2008 PASSED BY THE LD. CIT(A)-II, AGRA ON THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LEARNED LD. CIT(A)-II, AGRA HAS ERRED IN LA W AND ON THE FACTS IN DELETING THE ADDITION OF RS.2,00,000/- MAD E ON ACCOUNT OF UNEXPLAINED GIFT WITHOUT APPRECIATING THE FACTS OF THE CASE. 1(I) THAT IN DOING SO THE LEARNED LD. CIT(A)-II, AG RA HAS NOT APPRECIATED THE FACT THAT THE BURDEN OF PROOF LAY O N THE ASSESSEE TO PROVE THE GENUINENESS OF THE GIFT RECEIVED BY HER, WHICH SHE FAILED TO DISCHARGE EVEN INSPITE OF BEING ESPECIALLY REQUIRED BY THE AO TO DO SO. 1(II) THAT IN DOING SO THE LD. CIT(A)-II, AGRA HAS ERRED IN LAW AND ON FACT IN WRONGLY ASSUMING THAT THE ASSESSEE DISCH ARGED HER ONUS BY SIMPLY FURNISHING NAME & ADDRESS OF DONOR AND A COP Y OF GIFT DEED, 2 WHILE THE ONUS WAS ON THE ASSESSEE NOT ONLY TO PROV E THE IDENTITY OF THE DONOR BUT ALSO TO PROVE HER CAPACITY TO GIVE GIFT A ND GENUINENESS OF GIFT WHICH SHE FAILED TO DISCHARGE. 2. THAT THE LEARNED LD. CIT(A)-II, AGRA HAS ERRED I N LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS.11,96,972 AND RS.22,940/- MADE ON ACCOUNT OF BOGUS ACCOMMODATION ENTRY/UNEXPL AINED CASH CREDITS IN THE GARB OF SALE CONSIDERATION OF SHARES AND RS.22,940/- CHARGES THEREON FOR ARRANGING THE ENTRY, WITHOUT AP PRECIATING THE FACTS OF THE CASE. 2(I) THAT THE LEARNED LD. CIT(A)-II, AGRA HAS ERRED IN LAW AND ON THE FACTS IN NOT APPRECIATING THE FACT THAT THE ASS ESSEE HAD NOT FURNISHED COMPLETE INFORMATION NOR PRODUCED THE REL EVANT EVIDENCES REQUIRED FOR VERIFICATION OF SHARE TRANSACTIONS DES PITE BEING SPECIFICALLY ASKED BY THE AO. 3. THAT IN DOING SO THE LEARNED LD. CIT(A)-II, AGRA HAS ERRED IN LAW AND FACTS BY IGNORING THE FACT THE BURDEN OF PR OOF LAY ON THE ASSESSEE TO PROVE THE GENUINENESS OF THE SHARE TRAN SACTIONS, WHICH SHE FAILED TO DISCHARGE. 4. THAT THE ORDER OF THE LD. CIT(A)-II, AGRA BEING ERRONEOUS IN LAW AND ON FACTS BE VACATED AND THE ORDER OF THE A. O. BE RESTORED. 5. THAT THE APPELLANT CRAVES LEAVE TO AMEND THE GRO UNDS OF THE APPEAL STATED ABOVE AS AND WHEN NEED FOR DOING SO M AY ARISE. 2. THE FACTS NARRATED BY BOTH THE PARTIES ARE NOT D ISPUTED BY THE LD. DEPARTMENTAL REPRESENTATIVE, THEREFORE, THERE IS NO NEED TO REPEAT THE SAME FOR THE SAKE OF CONVENIENCE. 3. THE REVENUE HAS FILED THE PRESENT APPEAL ON 11.0 2.2009 WHICH CAME UP FOR HEARING BEFORE THE BENCH MANY TIMES. THIS OFFICE H AS ISSUED VARIOUS NOTICES TO THE 3 ASSESSEE, BUT THE SAME COULD NOT BE SERVED UPON THE ASSESSEE THOUGH POST. LASTLY, THIS OFFICE HAS ISSUED NOTICES TO THE ASSESSEE THRO UGH LD. DEPARTMENTAL REPRESENTATIVE ON 10.01.2011, 11.04.2011 AND ON 02. 06.2011. ACCORDING TO THE REPORT OF SHRI K.D. BHATT, ACIT, CENTRAL CIRCLE, AG RA, VIDE HIS LETTER DATED 20.06.2011 HE INFORMED TO THIS OFFICE THAT NOTICE H AS BEEN SERVED UPON THE ASSESSEE FOR 30.06.2011 BY NOTICE SERVER ON 18.06.2011. INS PITE OF THE SAME, NEITHER THE ASSESSEE NOR HIS LD. DEPARTMENTAL REPRESENTATIVE AP PEARED TO PROSECUTE THE MATTER IN DISPUTE. THEREFORE, WE ARE OF THE CONSIDERED OP INION THAT NO USEFUL PURPOSE WOULD BE SERVED BY ISSUING NOTICES AGAIN AND AGAIN TO THE ASSESSEE AND HENCE WE ARE DECIDING THE ISSUE IN DISPUTE EX-PARTE ASSESSEE AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE. 4. AT THE TIME OF HEARING, SHRI HOMI RAJ VANSH, LD. C.I.T. (DEPARTMENTAL REPRESENTATIVE) STATED THAT THERE ARE TWO ISSUES IN VOLVED IN THE PRESENT APPEAL. AS REGARDS TO ISSUE NO.1 IN RESPECT OF DELETION OF ADD ITION OF RS.2,00,000/- MADE ON ACCOUNT OF UNEXPLAINED GIFTS, HE STATED THAT THE LD . CIT(A) HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER BY HOLDING THAT THE A SSESSEE HAS ESTABLISHED THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE D ONOR. BUT, KEEPING IN VIEW OF THE LATEST DECISION RENDERED BY THE HONBLE SUPREME COURT OF INDIA REPORTED IN THE CASE OF CIT VS. P. MOHANAKALA, 291 ITR 278 (SC), TH E HONBLE SUPREME COURT OF INDIA HAS HELD THAT MONEY CAME BY WAY OF BANK CHEQU E AND WAS PAID THROUGH THE 4 PROCESS OF BANKING TRANSACTION WAS NOT BY ITSELF OF ANY CONSEQUENCE. HE FURTHER STATED THAT THE ISSUE IN DISPUTE IN THE PRESENT CAS E IS ALMOST SIMILAR TO THE FACTS AND CIRCUMSTANCES OF THE CASE DECIDED BY THE HONBLE SU PREME COURT OF INDIA (SUPRA), THEREFORE, BY RESPECTFULLY FOLLOWING THE JUDGEMENT OF HONBLE SUPREME COURT OF INDIA (SUPRA), THE ADDITION DELETED BY THE LD. FIRS T APPELLATE AUTHORITY MAY BE CANCELLED BY UPHOLDING THE ORDER OF THE ASSESSING O FFICER. 5. AS REGARDS TO THE SECOND ISSUE REGARDING DELETIO N OF ADDITION OF RS.11,96,972/- AND RS.22,940/- MADE ON ACCOUNT OF B OGUS ACCOMMODATION ENTRY/UNEXPLAINED CASH CREDITS MADE IN THE GARB OF SALE CONSIDERATION OF SHARES AND RS.22,940/- CHARGES THEREON FOR ARRANGING THE ENTRY , THE LD. C.I.T. (DEPARTMENTAL REPRESENTATIVE) STATED THAT THE IMPUGNED ORDER PASS ED BY THE LD. FIRST APPELLATE AUTHORITY IS A NON-SPEAKING ORDER AND IS NOT SUSTAI NABLE IN THE EYES OF LAW. 6. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E ON THE ISSUES INVOLVED IN THE PRESENT APPEAL AS WELL AS HAS THOROUGHLY GON E THROUGH THE ORDERS PASSED BY THE REVENUE AUTHORITIES, ESPECIALLY THE IMPUGNED OR DER, AND WE ARE OF THE CONSIDERED OPINION THAT THE LD. FIRST APPELLATE AUT HORITY HAS PASSED THE IMPUGNED ORDER, AS REGARDS TO ISSUE NO.1, WITHOUT CONSIDERIN G THE JUDGEMENT OF HONBLE SUPREME COURT OF INDIA IN THE CASE OF MOHAN KALA. ON THE DATE OF HEARING, THE ASSESSEE WAS NOT PRESENT BEFORE THE BENCH INSPITE O F SERVICE THROUGH THE 5 DEPARTMENT, BUT IN THE INTEREST OF JUSTICE, WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE INVOLVED IN GROUND NO.1 DESERVES TO BE SET AS IDE TO THE FILE OF LD. CIT(A) TO DECIDE THE SAME AFRESH AFTER HEARING THE ASSESSEE A ND IN VIEW OF DECISION RENDERED BY HONBLE SUPREME COURT OF INDIA (SUPRA). 7. AS REGARDS TO THE ISSUE INVOLVED IN GROUND NO.2, WE HAVE PERUSED THE IMPUGNED ORDER AND WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE INVOLVED IN GROUND NO.2 HAS BEEN DECIDED BY THE LD. CIT(A) BY P ASSING A NON-SPEAKING ORDER. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PORTION O F THE ORDER OF LD. CIT(A) IS REPRODUCED AS UNDER :- 3.2 I HAVE CONSIDERED THE FACTS OF THE CASE, SUBMI SSION OF THE A.R., DOCUMENTS FILED AND HAVE ALSO GONE THROUGH THE VARI OUS DECISION REFERRED BY THE APPELLANT. IN SUCH A SITUATION, DE CISION OF AO TREATING THE TRANSACTION OF THE ASSESSEE AS BOGUS TRANSACTIO N IS WITHOUT ANY BASIS AND BASED ON CONJECTURES AND SURMISES. THE A SSESSEE IS IN POSSESSION OF SHARE CERTIFICATES, PURCHASES HAVE AL SO NOT BEEN DOUBTED. SALES ARE THROUGH BROKER DULY COVERED BY DMAT ACCOUNT. GENERALLY IN CASE OF SALE OF SHARES THROUGH BROKERS , THE TRANSFER IS NOT SUPPOSED TO KNOW IN WHOSE NAME THESE SHARES HAVE BE EN TRANSFERRED. 4. UNDER THESE CIRCUMSTANCES AND RESPECTFULLY FOLLO WING THE CITED CASES, I FULLY AGREE WITH THE SUBMISSIONS AND ARGUM ENTS OF THE APPELLANT. ADDITIONS MADE ON THIS ACCOUNT TREATING THE SHARE TRANSACTION AS NON GENUINE AND ESTIMATE OF EXPENSES ARE DELETED. 6 8. KEEPING IN VIEW OF THE AFORESAID ORDER PASSED BY THE LD. FIRST APPELLATE AUTHORITY, WE ARE OF THE CONSIDERED OPINION THAT TH AT THE LD. FIRST APPELLATE AUTHORITY HAS NOT PASSED A SPEAKING ORDER ON THE IS SUE IN DISPUTE, THEREFORE, WE SET ASIDE THE IMPUGNED ORDER TO THE FILE OF LD. CIT(A) WITH THE DIRECTION TO DECIDE THE ISSUE IN DISPUTE AFRESH BY PASSING A SPEAKING ORDER AFTER HEARING THE PARTIES. 9. IN THE RESULT, APPEAL FILED BY THE REVENUE IS AL LOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 15.07.20 11). SD/- SD/- (P.K. BANSAL) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: AGRA DATE: 15 TH JULY, 2011 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR, ITAT, AGRA BENCH, AGRA 6. GUARD FILE ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY