M/s Indar Sakshi Financial Services, Ludhiana V. ITO, Ludhiana

ITA 407/CHANDI/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4992 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 03-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPIKA MOHAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH A, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.407/CHD/2017 (ASSESSMENT YEAR : 2009-10) M/S INDER SAKSHI VS. THE INCOME TAX OFFICER, FINANCIAL SERVICES, 455, WARD VII(1), 2 ND FLOOR, SOHAN PALACE, LUDHIANA. LUDHIANA. PAN: AACF15590F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PARIKSHIT AGGARWAL RESPONDENT BY : MS. DEEPIKA MOHAN, JCIT DATE OF HEARING : 15.05.2018 DATE OF PRONOUNCEMENT : 07.08.2018 ORDER PER ANNAPURNA GUPTA, A.M. : THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-3, LUDHIANA DATED 15.3.2016 RELATING T O ASSESSMENT YEAR 2009-10. 2. THE ONLY ISSUE IN THE PRESENT APPEAL RELATES TO ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH AMOUNTING TO RS.4,37,000/- FOUND CREDITED IN THE BOOKS OF THE AS SESSEE. 3. BRIEF FACTS RELATING TO THE CASE ARE THAT ASSESS EE DERIVES ITS INCOME FROM TRADING OF SHARES AND COMMODITIES A ND HAD FILED ITS RETURN FOR THE IMPUGNED YEAR DECLARING IN COME OF RS.3560/-. THEREAFTER ASSESSMENT WAS FRAMED U/S 14 3 (3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) MAKIN G ADDITION OF RS.4,37,000/- ON ACCOUNT OF CASH RECEIPTS SHOWN FROM ONE 2 SHRI GURAMRIT PAL SINGH ON ACCOUNT OF FAILURE OF THE ASSESSEE TO PRODUCE THE SAID PERSON AND IN THE ABSE NCE OF ANY EVIDENCE IN SUPPORT OF THE SAID CASH RECEIPTS. 4. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(APPEALS) WHERE THE ASSESSEE CONTENDED THAT THE SAID PAYMENT HAD BEEN RECEIVED ON ACCOUNT OF SALE OF SHA RES MADE TO SAID CLIENT WHICH WERE DELIVERED IN DEMAT F ORM. DETAILS OF THE DEMAT ACCOUNT OF THE SAID CLIENT OF THE ASSESSEE WERE FURNISHED. FURTHER CONFIRMED COPY OF ACCOUNT OF CLIENT DULY SIGNED BY HIM AND HAVING HIS PAN NUM BER AND ADDRESS WERE ALSO FURNISHED .IT WAS ALSO POINTED OU T FROM THE CLIENT LEDGER ACCOUNT THAT PAYMENT HAD BEEN MAD E BY HIM BOTH IN CASH AND CHEQUE. THE LD. CIT(APPEALS) U PHELD THE ADDITION MADE BY THE ASSESSING OFFICER HOLDING THAT GENUINENESS OF CASH RECEIVED HAS NOT BEEN PROVED BY THE ASSESSEE, SINCE HE FAILED TO PRODUCE THE CLIENT IN PERSON FOR EXAMINATION WHEN ASKED TO DO SO HOLDING AS UNDER AT PARA 4.5 OF ITS ORDER: 4.5 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF TH E APPELLANT AND THE FACTS OF THE CASE ON RECORD. THE ASSESSING OFFICER HAS ADDED THE CASH RECEIPTS RECEI VED FROM SALE OF SHARES AMOUNTING TO RS.4,37,000/- RECE IVED FROM A CLIENT WHO COULD NOT BE PRODUCED BEFORE THE ASSESSING OFFICER. THE LD. COUNSEL HAS POINTED OUT THAT THE FOLLOWING AMOUNTS WERE RECEIVED THROUGH CHEQUE/ TFD, I.E RS.55,000 ON 26.04.2008, RS.4,000/- ON 15.05.2008 RS.1000 ON 25.06.2008 AND RS.5000 ON 15.11.2008 HOWEVER, COPY OF BANK A/C HAS NOT BEEN FILED TO PRO VE THAT PAYMENTS WERE RECEIVED THROUGH CHEQUE. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS REQUIRED T O PRODUCE SH. GURAMRITPAL SINGH IN PERSON FOR EXAMINA TION WHICH THE ASSESSEE FAILED TO DO. THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CASH RECEIVED F ROM THE PARTY IS UPHELD, THE GENUINENESS OF WHICH WAS DOUBTED BY THE ASSESSING OFFICER AND THE ASSESSEE F AILED TO DISCHARGE THE ONUS OF PROVING THE SAME ABOVE. 3 5. AGGRIEVED BY SAME THE ASSESSEE HAS COME IN APPEA L BEFORE US RAISING THE FOLLOWING GROUNDS:- 1. THE LEARNED INCOME TAX OFFICER HAS ERRED IN MAKING THE ADDITION OF RS.437000/ ON A/C OF AMOUNT RECEIVED FROM CLIENT AGAINST THE SALE OF SHARES WHICH HAS BEEN TRANSFERRED IN DEMAT A/C OF THE SAME CLIENTS. 2. THAT THE ORDER OF THE INCOME TAX OFFICER , WARD VII (1), LUDHIANA IS BAD IN LAW AND NOT BASED ON FACTS AND CIRCUMSTANCES OF THE CASE. 3. THAT THE APPELLANT CRAVES TO ADD OR AMEND ANY GROUND OF APPEAL TILL THE APPEAL IS FINALLY HEARD AND DISPOSED OFF. 6. DURING THE COURSE OF HEARING BEFORE US LD. COUNS EL OF ASSESSEE REITERATED THE CONTENTIONS MADE BEFORE THE CIT (APPEALS) STATING THAT THE CASH PAYMENT HAD BEEN RE CEIVED FROM SHRI GURAMRITPAL SINGH ON ACCOUNT OF SALE OF S HARES MADE TO HIM IN COURSE OF CARRYING OUT BUSINESS OF A SSESSEE WHO WAS ACTING AS A BROKER OF SHARES. LD. COUNSEL F OR ASSESSEE DREW A ATTENTION TO THE COPY OF ACCOUNT O F THE SAID CLIENT PLACED IN THE PAPER BOOK AT PAGE NO-6 AND P OINTED OUT THEREFROM THAT THE INFORMATION HAD BEEN EXTRACT ED BY AO FROM THE SAID ACCOUNT WHICH REVEALED SALE OF SHARE S MADE TO THE CLIENT AND PAYMENT RECEIVED ON ACCOUNT OF SAME BOTH IN CASH AND BY WAY OF CHEQUE. LD. COUNSEL FOR ASSESSEE STATED THAT THE AO HAD ONLY DOUBTED THE CASH RECEIVED SHOW N IN SAID ACCOUNT AND HAD ACCEPTED THE FACT OF SHARES S OLD TO HIM AND PAYMENT MADE BY CHEQUE ALSO. EVEN OTHERWISE LD. COUNSEL OF ASSESSEE STATED THAT IT HAD BEEN POINTED OUT THAT THE SHARES HAD BEEN TRANSFERRED IN DEMAT ACCOUNT AN D DEMAT A/C NUMBER OF BOTH THE ASSESSEE AND CLIENT HA D BEEN FURNISHED. LD. COUNSEL OF ASSESSEE STATED THAT EVEN 4 CONFIRMED COPY OF THE CLIENT HAD BEEN FURNISHED GIV ING PAN NUMBER AND ADDRESS OF THE CLIENT ALSO. LD. COUNSEL THEREFORE STATED THAT THE ASSESSEE HAD CLEARLY DISCHARGED HIS ONUS OF PROVING THE GENUINENESS OF CASH RECEIVED AND ADDITI ON COULD NOT HAVE BEEN MADE MERELY FOR THE REASON THAT THE C ONCERNED PERSON FROM WHOM CASH WAS RECEIVED WAS NOT PRODUCED BEFORE THE ASSESSING OFFICER. 7. LD. DR, ON THE OTHER HAND, RELIED ON THE ORDER O F THE LD. CIT(APPEALS). 8. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIE S, AND PERUSED THE ORDERS OF AUTHORITY BELOW. THE ISSUE BE FORE US RELATES TO ADDITION MADE ON ACCOUNT OF CASH RECEIPT S AMOUNTING TO RS.4,37,000/- REMAINING UNEXPLAINED. 9. AFTER CONSIDERING THE CONTENTIONS OF BOTH THE PA RTIES AND ON GOING THROUGH THE EVIDENCES FILED BEFORE US, WE FIND MERIT IN THE CONTENTION OF LD. COUNSEL FOR THE ASSE SSEE THAT IT HAD SUFFICIENTLY DISCHARGED ITS ONUS OF EXPLAINI NG THE SAID CASH RECEIPT, AS HAVING BEEN RECEIVED FROM ONE ITS CLIENT SH.GURAMRITPAL SINGH ON ACCOUNT OF SHARES SOLD TO H IM, WITH EVIDENCES AND MERELY BECAUSE OF NON PRODUCTION OF T HE CASH DEPOSITOR BEFORE THE ASSESSING OFFICER FOR EXAMINAT ION COULD BE NO REASON TO HOLD THE CASH RECEIVED AS UNEXPLAIN ED. 10. THE FACT THAT THE SAID CASH WAS SHOWN TO HAVE BEEN RECEIVED FROM ONE SH. GURAMRITPAL SINGH IS NOT DISP UTED. THE FACT THAT THE ASSESSEE DEALS IN TRADING OF SHAR ES AND COMMODITIES IS ALSO NOT DISPUTED. THAT THE ACCOUNT 5 MAINTAINED OF THE SAID PERSON REFLECTS SHARES SOLD TO HIM DURING THE YEAR AND THAT PART PAYMENT HAS BEEN RECE IVED BY WAY OF CHEQUE IS ALSO A FACT ON RECORD WHICH WE FI ND HAS NOT BEEN DOUBTED BY REVENUE. THUS THERE IS NO DISPU TE ABOUT THE FACT THAT THE SAID PERSON WAS A CLIENT OF THE ASSESSEE TO WHOM SHARES WERE SOLD DURING THE YEAR A ND PART PAYMENT OF WHICH WAS RECEIVED BY CHEQUE. IT IS ONLY THE CASH COMPONENT OF PAYMENT RECEIVED WHICH HAS BEEN FOUND NOT TO BE GENUINE. WE FIND THAT THE ASSESSEE HAD FILED CON FIRMATION OF THE TRANSACTION FROM THE SAID PERSON. NO INFIRMI TY HAS BEEN POINTED OUT IN THE SAME. THE ASSESSEE THEREFOR E HAS PROVED THE GENUINENESS OF THE CASH FOUND DEPOSITED AS HAVING BEEN RECEIVED FROM ONE ITS CLIENTS ON ACCOUN T OF SALE OF SHARES .THE ONLY REASON FOR HOLDING THE CASH UNE XPLAINED IS, WE FIND, NON PRODUCTION OF THE CONCERNED PERSON BEFORE THE REVENUE AUTHORITIES. WE ARE UNABLE TO AGREE WI TH THE REASONING OF THE REVENUE ON THIS ACCOUNT. HAVING FO UND NO FAULT IN THE FACT THAT THE SAID PERSON FROM WHOM CA SH WAS RECEIVED WAS A CLIENT OF THE ASSESSEE TO WHOM SHARE S WERE SOLD AND PART PAYMENT RECEIVED BY WAY OF CHEQUE THE RE WAS NO REASON WE FIND TO DOUBT THE CASH COMPONENT RECEI VED OF THE SALE CONSIDERATION ESPECIALLY WHEN IT WAS CONFI RMED BY THE SAID PERSON. MOREOVER THE ASSESSEE HAD GIVEN AL L DETAILS OF THE CONCERNED PERSON, WHO COULD VERY WELL HAVE B EEN SUMMONED BY THE REVENUE AUTHORITIES FOR FURTHER EXAMINATION. THE ASSESSEE WE HOLD HAD CLEARLY DISCH ARGED HIS ONUS OF EXPLAINING THE CASH RECEIVED AND IN THE ABSENCE OF ANY INFIRMITY FOUND IN HIS EXPLANATION, THE CASH RECEIVED 6 FROM HIM COULD NOT BE HELD TO BE UNEXPLAINED MERELY BECAUSE THE ASSESSEE DID NOT PRODUCE THE SAID PERSO N. THE ADDITION THEREFORE MADE ON ACCOUNT OF UNEXPLAINED C ASH AMOUNTING TO RS.4,37,000/- IS DIRECTED TO BE DELETE D. THE ORDER OF THE CIT(APPEALS) IS, THEREFORE, SET ASIDE. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 7 TH AUGUST, 2018 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH