ITO, New Delhi V. Smt. Sonal Chandra Gupta, Mumbai

ITA 4112/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61694 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 03-05-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 09-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADEEP KUMAR MEET
• Assessee Lawyers: TAPISH MISHRA
• Keywords: Unexplained investment; Income from undisclosed sources; Additional evidence; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH G BENCH G BENCH G BENCH G : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI A.D.JAIN A.D.JAIN A.D.JAIN A.D.JAIN, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NOS.4112/DEL/2011, 5764/DEL/2011 & 5765/DEL/201 1 S.4112/DEL/2011, 5764/DEL/2011 & 5765/DEL/2011 S.4112/DEL/2011, 5764/DEL/2011 & 5765/DEL/2011 S.4112/DEL/2011, 5764/DEL/2011 & 5765/DEL/2011 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2005 2005 2005 2005- -- -06 0606 06 INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -46(1) 46(1) 46(1) 46(1), ,, , NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. SMT.SONAL CHANDRA GUPTA, SMT.SONAL CHANDRA GUPTA, SMT.SONAL CHANDRA GUPTA, SMT.SONAL CHANDRA GUPTA, C CC C- -- -103, 103, 103, 103, RAHEJA SHERWOOD, RAHEJA SHERWOOD, RAHEJA SHERWOOD, RAHEJA SHERWOOD, NIRLON COMPOUND, NIRLON COMPOUND, NIRLON COMPOUND, NIRLON COMPOUND, GOREGAON, GOREGAON, GOREGAON, GOREGAON, EAST MUMBAI. EAST MUMBAI. EAST MUMBAI. EAST MUMBAI. PAN : AALPG8547R. PAN : AALPG8547R. PAN : AALPG8547R. PAN : AALPG8547R. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PRADEEP KUMAR MEET, SR.DR. RESPONDENT BY : SHRI TAPISH MISHRA, ADVOCATE. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : ITA NO.4112/DEL/2011 ITA NO.4112/DEL/2011 ITA NO.4112/DEL/2011 ITA NO.4112/DEL/2011: :: :- -- - IN THIS APPEAL FILED BY THE REVENUE, FOLLOWING GRO UNDS ARE RAISED:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN : (I) DELETING THE ADDITION OF RS.9,97,500/- OUT OF T OTAL ADDITION OF RS.24,45,000/- AND PENALTY OF RS.8,48,3 84/- U/S 271(1)(C) AND RS.40,000/- U/S 271(1)(B) RIGHTLY MAD E BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN MUTUAL F UNDS AS INCOME FROM UNDISCLOSED SOURCES. (II) ALLOWING THE ASSESSEE TO PRODUCE ANY EVIDENCE BEFORE HIM WHICH IS IN VIOLATION OF RULE 46A(1) OF THE INCOME TAX ACT, 1962. ITA-4112, 5764 & 5765/D/2011 2 2. AT THE TIME OF HEARING BEFORE US, THE LEARNED DR STATED THAT THE REVENUE HAS FILED SEPARATE APPEAL AGAINST THE CANCE LLATION OF PENALTY UNDER SECTION 271(1)(C) AND 271(1)(B). THEREFORE, IN THIS APPEAL, THE ONLY GROUND REQUIRED TO BE ADJUDICATED IS AGAINST T HE DELETION OF ADDITION OF ` 9,97,500/- OUT OF THE TOTAL ADDITION OF ` 24,45,000/-. IT IS STATED BY THE LEARNED DR THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE MADE CERTAIN INVESTMENT TOTALING TO ` 24,45,000/-, THE DETAILS OF WHICH ARE AS UNDER:- DETAIL OF INVESTMENT DATED OF INVESTMENT AMOUNT INV ESTED PRINCIPAL MUTUAL FUND 15.03.2005 RS.2,50,000/- RELIANCE MUTUAL FUND 29.03.2005 RS.2,00,000/- NEW DELHI TELEVISION LTD. 12.05.2004 RS.19,95,000/- TOTAL RS.24,45,000/- 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE DID NOT FURNISH ANY DETAILS AND ALSO DID NOT FILE ANY E XPLANATION ABOUT THE SOURCE OF THIS INVESTMENT. THEREFORE, THE ASSESSIN G OFFICER MADE THE ADDITION OF ` 24,45,000/- AS UNEXPLAINED INVESTMENT UNDER SECTION 69. DURING THE COURSE OF HEARING BEFORE THE LEARNED CIT (A), THE ASSESSEE FURNISHED CERTAIN ADDITIONAL EVIDENCE ON WHICH ASSE SSING OFFICERS REMAND REPORT WAS CALLED. IN THE REMAND REPORT, AS SESSING OFFICER WAS SATISFIED WITH THE INVESTMENT IN THE MUTUAL FUNDS. THEREFORE, THE REVENUE IS NOT AGGRIEVED AGAINST THE DELETION OF ` 4,50,000/- WHICH WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INVESTM ENT IN MUTUAL FUNDS. OUT OF THE INVESTMENT OF ` 19,95,000/- AS SHARE APPLICATION MONEY IN NEW DELHI TELEVISION LIMITED (NDTV), THE A SSESSING OFFICER ACCEPTED THE ASSESSEES CONTENTION THAT THE SUM OF ` 9,97,500/- WAS THE LOAN TAKEN FROM IDBI. WITH REGARD TO BALANCE S UM, THE ASSESSEES CONTENTION WAS THAT THIS WAS THE AMOUNT RECEIVED FR OM CO-APPLICANTS. HOWEVER, THE ASSESSEE HAS NOT FURNISHED THE NECESSA RY EVIDENCE TO PROVE THE INVESTMENT MADE BY THE CO-APPLICANTS AND, THEREFORE, THE ITA-4112, 5764 & 5765/D/2011 3 ASSESSING OFFICER IN THE REMAND REPORT SUGGESTED TH AT THE ADDITIONS SHOULD BE SUSTAINED AT ` 9,97,500/-. HOWEVER, THE CIT(A) DELETED THE SAME. THEREFORE, THE REVENUE IS AGGRIEVED. HE STA TED THAT THE ASSESSEE HAS NOT SATISFACTORILY EXPLAINED THE INVES TMENT OF ` 9,97,500/- CLAIMED TO HAVE BEEN MADE BY THE CO-OWNERS. HE, TH EREFORE, SUBMITTED THAT THE ORDER OF LEARNED CIT(A) SHOULD B E PARTLY REVERSED AND THE ADDITION OF ` 9,97,500/- SHOULD BE SUSTAINED. 4. THE LEARNED COUNSEL FOR THE ASSESSEE STATED THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER SENT THE NOTICE AT THE WRONG ADDRESS, THEREFORE, NO NOTICE WAS RECEIVED BY THE ASSESSEE. THAT ALL THE DETAILS WERE FURNISHED BEFORE THE CIT( A) AND HE HAS DULY CALLED FOR THE REMAND REPORT. THAT THE APPLICATION IN THE SHARES OF NDTV WAS MADE JOINTLY BY THE ASSESSEE AND FIVE OTHE R PERSONS. THE ASSESSEE HAS FURNISHED ALL THE EVIDENCES AND PARTIC ULARS IN RESPECT OF EACH AND EVERY CO-APPLICANT. THE ASSESSEE HAS FURN ISHED ALL BANK STATEMENTS OF CO-APPLICANTS, CERTIFICATE FROM IDBI GIVING DETAILS OF CHEQUES AND AMOUNT CONTRIBUTED BY THE CO-APPLICANTS AND THE CERTIFICATE FROM HDFC BANK CONFIRMING THE BANK ACCO UNT OF THE CO- APPLICANTS. IN THE ABOVE CIRCUMSTANCES, DESPITE TH ESE EVIDENCES, IF AT ALL THE REVENUE IS NOT SATISFIED ABOUT THE SOURCE O F INVESTMENT BY THE CO-APPLICANTS, THE NECESSARY ACTION, IF ANY, CAN BE TAKEN IN THEIR CASE, BUT, SO FAR AS THE ASSESSEE IS CONCERNED, IT HAS DU LY EXPLAINED THE ENTIRE INVESTMENT. 5. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND HAVE PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT LEARNED CIT(A) HAS RECORDED FOLLOWING FINDING IN THIS REGAR D:- B. PURCHASE OF SHARES OF NEW DELHI TELEVISION LTD. FOR RS.19,95,000 ITA-4112, 5764 & 5765/D/2011 4 1. THE ASSESSEE ALONG WITH FIVE OTHER PEOPLE (MR. SANDEEP G DAGA, MR. MUTUKUMARAN D, MR. RAJEEV GYANENDRA TEWARI, MR. J.GOPALAKRISHNAN AND MRS. THA KKER PAYAL VIJAY) POOLED IN RS.10,05,300 (RUPEES TEN LAC S FIVE THOUSAND AND THREE HUNDRED ONLY) AND PAID TO IDBI B ANK ON 27 TH APRIL, 2004 TOWARDS THE MARGIN CONTRIBUTION OF THE NDTV IPO. 2. OUT OF THE AFORESAID CONTRIBUTION OF RS.10,05,30 0 IDBI DEDUCTED RS.7,800 AS CHARGES AND THEREFORE THE NET CONTRIBUTION OF THE APPLICANTS TOWARDS THE NDTV IPO APPLICATION MONEY WAS RS.9,97,500 ONLY. 3. IDBI PROVIDED A LOAN OF RS.9,97,500 AND AN APPLICATION WAS MADE FOR RS.19,95,000 FOR 28,500 SH ARES OF NDTV. 4. THE ASSESSEE AND THE OTHER APPLICANTS WERE ALLOT TED ONLY 200 SHARES OF NDTV (AS AGAINST 28500 SHARES APPLIED). 5. THE ASSESSEE RECEIVED A REFUND OF RS.9,83,500 FR OM IDBI VIDE CHEQUE NUMBER 115789 ON 19.05.2004 IN HIS HDFC BANK ACCOUNT NUMBER 05011050083069. 6. AFTER RETAINING HIS SHARE OF THE REFUNDED AMOUNT THE ASSESSEE IMMEDIATELY TRANSFERRED THE BALANCE AMOUNT SO REFUNDED BY IDBI TO OTHER APPLICANTS. 6. FROM THE ABOVE, IT IS EVIDENT THAT THE ASSESSEE ALONGWITH FIVE OTHER PERSONS MADE APPLICATION FOR THE SHARES OF ND TV IPO. THE TOTAL CONTRIBUTION MADE WAS ` 9,97,500/-. THE LOAN OF EQUAL AMOUNT WAS ITA-4112, 5764 & 5765/D/2011 5 GIVEN BY IDBI. ULTIMATELY, ONLY 200 SHARES WERE AL LOTTED AND AMOUNT WAS REFUNDED WHICH WAS FURTHER REFUNDED TO EACH APP LICANT. AT PAGES 6 TO 10, LEARNED CIT(A) HAS GIVEN COMPLETE DETAILS OF NAME OF EACH CO- APPLICANT, THE BANK ACCOUNT NUMBER, CHEQUE NUMBER G IVEN BY THEM ETC. THESE DETAILS HAVE NEITHER BEEN CONTROVERTED NOR DISPROVED BY THE REVENUE. HE HAS ALSO RECORDED A FINDING ON PAG E 10 THAT ALL THE CO-APPLICANTS ARE INCOME TAX ASSESSEES AND THEIR PE RMANENT ACCOUNT NUMBERS WERE GIVEN. IN VIEW OF THE TOTALITY OF ABO VE FACTS, IN OUR OPINION, THE LEARNED CIT(A) WAS FULLY JUSTIFIED IN DELETING THE ENTIRE ADDITION WHICH WAS MADE BY THE ASSESSING OFFICER FO R UNEXPLAINED INVESTMENT. WE UPHOLD THE ORDER OF LEARNED CIT(A) AND REJECT REVENUES GROUND OF APPEAL. ITA NO.5764/DEL/2011 ITA NO.5764/DEL/2011 ITA NO.5764/DEL/2011 ITA NO.5764/DEL/2011: :: :- -- - 7. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSES SEE CONTENDED THAT AS PER CENTRAL BOARD OF DIRECT TAXES, INSTRUCT ION NO.3/2011 DATED 09 TH FEBRUARY, 2011, THE REVISED LIMIT FOR PREFERRING R EVENUES APPEALS HAS BEEN INCREASED FROM `2 LACS TO `3 LACS, ALTHOUG H THE TAX EFFECT IN THE PRESENT REVENUES APPEAL IS ONLY `40,000/- WHIC H IS BELOW THE PRESCRIBED LIMIT OF `3 LACS. IN VIEW THEREOF, THE R EVENUES APPEAL MAY BE DISMISSED AS THE TAX EFFECT BEING BELOW THE PRES CRIBED LIMIT. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE AGREES T HAT THE TAX EFFECT IN THE REVENUES APPEAL IS ONLY ` 40,000/-. 9. WE HAVE HEARD BOTH SIDES. THE CBDT, VIDE ABOVE I NSTRUCTION HAS CLEARLY LAID DOWN THAT THE REVENUE SHOULD NOT PREFE R APPEALS AGAINST ASSESSEES BEFORE ITAT IF THE TAX EFFECT INVOLVED IN THE APPEAL, EXCLUDING INTEREST, IS LESS THAN `3 LACS. THE TAX P AYABLE IN THE PRESENT APPEAL BEING BELOW `3 LACS, THE REVENUES APPEAL IS DISMISSED AS NOT MAINTAINABLE IN VIEW OF CBDT INSTRUCTION. ITA-4112, 5764 & 5765/D/2011 6 ITA NO.5765/DEL/2011: ITA NO.5765/DEL/2011: ITA NO.5765/DEL/2011: ITA NO.5765/DEL/2011:- -- - 10. IN THIS APPEAL, THE REVENUE HAS TAKEN THE FOLLO WING GROUND:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN : DELETING THE PENALTY AMOUNTING TO RS.8,48,384/- IMP OSED BY THE AO U/S 271(1)(C). 11. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE RE LEVANT MATERIAL PLACED BEFORE US. SINCE THE ADDITION ON WHICH PENA LTY IS LEVIED ITSELF HAS BEEN DELETED, THE PENALTY THEREON CANNOT STAND. THEREFORE, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE OR DER OF LEARNED CIT(A). THE SAME IS SUSTAINED AND THE REVENUES APPEAL IS D ISMISSED. 12. IN THE RESULT, ALL THE APPEALS OF THE REVENUE A RE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 18 TH MAY, 2012. SD/- SD/- ( (( (A.D.JAIN A.D.JAIN A.D.JAIN A.D.JAIN) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 18.05.2012 VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR