Raj Kumar Agarwal, Kanpur V. Income Tax Officer-1(3), Kanpur

ITA 414/LKW/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87748 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-11-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 25-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: IN ITS APPEAL I E I T A NO LKW
• Keywords: Unexplained cash credit; Corroborative evidences
• Section: 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.414/LKW/2012 ASSESSMENT YEAR:2002 - 03 SHRI RAJ KUMAR AGARWAL, 35/48, BANGALI MOHAL, KANPUR. PAN:ADNPA5935E VS. INCOME TAX OFFICER - 1(3), KANPUR. (APPELLANT) (RESPONDENT) ITA NO.471/LKW/2012 ASSESSMENT YEAR:2002 - 03 INCOME TAX OFFICER - 1(3), KANPUR. VS. SHRI RAJ KUMAR AGARWAL, 35/48, BANGALI MOHAL, KANPUR. PAN:ADNPA5935E (APPELLANT) (RESPONDENT) O R D E R PER A. K. GARODIA, A.M. THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE, WHICH ARE DIRECTED AGAINST THE ORDER OF CIT(A) - II, KANPUR DATED 28/05/2012 FOR ASSESSMENT YEAR 2002 - 2003. 2. THE GROUNDS RAISED BY THE ASSESSEE IN ITS APPEAL I.E. I.T.A. NO.414/LKW/2012 ARE AS UNDER: 1. BECAUSE THE CIT(A) HAS ERRED ON FACTS AND I N LAW IN UPHOLDING THE ADDITIONS OF RS.99,80 0 / - AND RS.51,000 / - BEING THE SALE PROCEEDS OF SHARES RECEIVED FROM RAJESH AGARWAL, TREATING IT TO BE UNEXPLAINED DEPOSIT U/S.68 OF THE ACT 1961. ASSESSEE BY SHRI RAKESH GARG, ADVOCATE REVENUE BY SHRI AMIT NIGAM, D. R. DATE OF HEARING 28/11/2014 DATE OF PRONOUNCEMENT 1 6 /01/2015 2 2. BECAUSE THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITIONS OF RS.3,50,000 / - BEING THE SALE PROCEEDS OF SHARES RECEIVED FROM VIKAL AGARWAL, TREATING IT TO BE UNEXPLAINED DEPOSIT U/S.68 OF THE ACT 1961 . 3. BECAUSE THE CIT(A) HAS FAILED TO APPRECIATE THE EXPLANATION FILED AND HAS NOT CONSIDERED THE ENTIRE FACTUAL POSITION DULY EXPLAINED BY THE ASSESSEE. 4. BECAUSE THE CIT(A) HAS NOT APPRECIATE THE FACTS AND CIRCUMSTANCES OF THE CASE WHICH IS UNJUST, BAD IN LAW AND THE ADDITIONS MADE BY THE AO DESERVES TO BE DELETED. 3. THE GROUNDS RAISED BY THE RE VENUE IN ITS APPEAL I.E. I.T.A. NO.471/LKW/2012 ARE AS UNDER: 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.13,51,150/ - ON ACCOUNT OF UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF INCOME TAX ACT, 1961 WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ABOVE ADDITION ON ACCOUNT OF UNEXPLAINED BANK TRANSACTIONS (CASH CREDIT) U/S 68 OF THE INCOME TAX ACT, 1961 IGNORING THE FACT THAT THE ASSESSEE COULD NOT PRODUCE ANY SUPPORTING EVIDENCE REGARDING SHARE TRANSACTIONS IN SPITE OF BEING GIVEN SEVERAL OPPORTUNITIES DURING TH E COURSE OF ASSESSMENT PROCEEDINGS. 3. THE COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION PERTAINING TO UNEXPLAINED BANK TRANSACTION IN THE NAMES OF SH. ARVIND MITTAL (RS.5,00,150/ - ) AND SH. SANJAY GUPTA (RS.51,000/ - & RS.3,00,000/ - ) AS THE GROUND THAT THE SAID CREDIT ENTRIES HAD BEEN ACCEPTED BY AO IN HIS REMAND REPORT DATED 26.03.2012, WHEREAS THE AO, IN HIS SAID REPORT, HAS NO WHERE ACCEPTED THE SAME. 3 4. THAT THE ORDER OF LD. COMMISSIONER OF INCO ME TAX (APPEALS) - II, KANPUR DT. 28.05.2012 NEEDS TO BE QUASHED AND ORDER DATED 28.02.2005 PASSED BY THE ASSESSING OFFICER TO BE RESTORED. 4. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORD ER OF CIT(A) WITH REGARD TO THE APPEAL OF THE REVENUE . REGARDING THE APPEAL OF THE ASSESSEE, HE SUBMITTED THAT THE RECEIPT FROM SHRI VIKAL AGARWAL WAS NOT ACCEPTED BY CIT(A) FOR THE REASON THAT THE ASSESSEE COULD NOT PRODUCE THE BANK ACCOUNT OF THIS PERSO N. HE SUBMITTED THAT ON PAGE NO. 15 OF THE PAPER BOOK IS NOTICE ISSUED BY UNION BANK OF INDIA IN DAINIK JAGRAN DATED 18/03/2012 REGARDING RECOVERY NOTICE FROM SHRI VIKAL AGARWAL. HE ALSO SUBMITTED THAT AFFIDAVIT OF SHRI VIKAL AGARWAL IS AVAILABLE ON PAGE NO. 32 AND PAGES 65 AND 66 IS COMPLETE DETAILS REGARDING PURCHASE AND SALE OF SHARES DURING THIS YEAR WHICH INCLUDES SALE OF SHARES OF RS.3.5 LAC TO SHRI VIKAL AGARWAL, RS.3.50 LAC TO SHRI RAJESH AGARWAL AND SALE OF SHARES OF RS.1,00,300/ - TO SHRI RAJESH AGARWAL. HE SUBMITTED THAT SINCE THESE RECEIPTS ARE ON ACCOUNT OF SALE OF SHARES, THE ADDITION U/S 68 IS NOT JUSTIFIED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE ISSUE WAS DECIDED BY CIT(A) ON THE BASIS THAT THE ASSESSEE HAS GIVEN FU LL DETAILS OF THE PERSONS FROM WHOM THE AMOUNT WAS RECEIVED I.E. PAN, AFFIDAVIT ETC. BUT HE A.O. HAS NOT EXAMINED THIS ASPECT OF THE MATTER THAT THE RECEIPTS IN QUESTION IS ON ACCOUNT OF SALE OF SHARES. AS PER THE DETAILS AVAILABLE ON PAGE NO. 65 & 66 OF THE PAPER BOOK, IT IS SEEN THAT 600 SHARES OF RELIANCE INDUSTRIES WERE SOLD BY THE ASSESSEE TO SHRI RAJESH AGARWAL AND 1,400 SHARES OF THE SAME COMPANY WERE SOLD TO SHRI VIKAL AGARWAL. SIMILARLY, THE ASSESSEE IS SHOWING PURCHASE OF 20 0 0 SHARES OF RIL. SHARES OF RANBAXY LAB 750 WERE SOLD TO NANDANI MITTAL & CO. AND 1,700 SHARES OF RIL WERE SOLD TO RICH CAPITAL & FINANCE. 900 SHARES OF RCFT AND 1,000 SHARES OF RIL WERE SOLD TO SHRI SANJAY GUPTA. THE ACQUISITION OF THESE SHARES ARE SHOWN BY WAY OF PURCHA SE F OR RS. 18,54,010/ - . IT IS SEEN THAT IN PARA 4 OF THE ASSESSMENT ORDER, IT WAS NOTED BY 4 THE ASSESSING OFFICER THAT IT WAS SUBMITTED BY THE ASSESSEE BEFORE HIM THAT THE INCOME OF RS.2,119/ - SHOWN UNDER THE HEAD INCOME FROM OTHER SOURCES, REPRESENTS INTE REST INCOME AND INCOME FROM DEALING/TRADING OF SHARES. REGARDING INTEREST INCOME, IT IS NOTED BY THE ASSESSING OFFICER THAT AS PER THE BANK INTEREST, THE ASSESSEE HAS EARNED RS.10/ - AS INTEREST INCOME. THE ASSESSING OFFICER HAS NOTED IN THE SAME PARA THA T THEREFORE, THE ASSESSEE HAS SHOWN RS.2,109/ - AS INCOME ON ACCOUNT OF DEALING/TRADING OF SHARES. THE ASSESSING OFFICER ESTIMATED THE SAME AT RS.5,000/ - . HENCE, WHEN THE ASSESSING OFFICER HAS HIMSELF ACCEPTED THE ACTIVITY OF PURCHASE AND SALE OF SHARES A ND ASSESSED THE INCOME ON THAT ACCOUNT, RECEIPT ON ACCOUNT OF SALE OF SHARES AND ASSESSED RS. 5,000/ - AS INCOME ON THIS ACCOUNT AS AGAINST RS. 2,109/ - DECLARED BY THE ASSESSEE, THE RECEIPT IN COURSE OF SALE OF SHARES CANNOT BE SUBJECTED TO ADDITION U/S 68 OF THE ACT. HENCE, IN OUR CONSIDERED OPINION, NO SUCH ADDITION IS JUSTIFIED IN THE FACTS OF THE PRESENT CASE. THEREFORE, THE ENTIRE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED AND THAT OF THE REVEN UE IS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 6 /01/2015 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR