ITO, New Delhi V. M/s. Jatin Investments Pvt. Ltd, New Delhi

ITA 4325/DEL/2009

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0074 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 08-04-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 12-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAURAV DUDEJA
• Keywords: Rejection of books of accounts; Income from undisclosed sources; Accommodation entries; Assessment record; Onus to prove; Reason to believe
• Section: 133(6); 147; 131; 148; 68

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL IN (DELHI BENCH D NEW DELHI) BEFORE SHRI N.K.SAINI, ACCOUNTANT MEMBER AND SHRI I.C. SUDHIR, JUDICIAL MEMBER ITA NO. 4325 & 4326 /DEL/2009 (ASSESSMENT YEAR: 2003-04) (ASSESSMENT YEAR : 2004-05) ITO VS. JATIN INVESTMENT PVT. LTD. WARD-4(2), ROOM NO. 413A, 104, SOU TH EXT. CENTRE C.R.BUILDING, I.P.ESTATE 2 73- MASJID MOTH, NDSE-II NEW DELHI NEW DELHI PAN : AAACJ1 585G PIN : 110049 (APPELLANT) (RESPONDEN T) APPELLANT BY : SH. GAURAV DUDEJA , SR. DR RESPONDENT BY : SH. VED JAIN, CA DATE OF HEARING : 13/04/2015 DATE OF PRONOUNCEMENT : 27 /05/2015 ORDER PER N.K.SAINI, A. M. : THESE APPEALS BY THE DEPARTMENT ARE DIRECTED AGAIN ST THE ORDER DATED 16/09/2009 OF CIT(A)- VII NEW DELHI. 4325 & 4326/ DEL/2009 2 2. FIRST WE WILL DEAL WITH THE APPEAL OF THE DEP ARTMENT IN ITA NO. 4325/DEL/2009. FOLLOWING GROUNDS HAS BEEN RAISED IN THIS APPEAL :- 1. THE ORDER OF THE LD. CIT (APPEALS ) IS ERRONEOUS & CONTRARY TO FACTS & LAW. 2. ON THE FACTS AND IN THE CIRCUMSTA NCES OF THE CASE AND IN LAW, THE LEARNED CIT (APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS. 93,45,000/- MADE U/S 6 8 OF THE I.T.ACT BEING THE UNACCOUNTED SALE PROCEEDS OF SHARES AND RS. 1,86,900/- ON ACCOUNT OF UNACCOUNTED COMMISSION. 2.1. LD. CIT(A) HAS IGNORED THE FACT THA T THE ASSESSEE FAILED TO DISCHARGE THE ONUS OF PROVING THE CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS O F THE TRANSACTION. 2.3. THE LD. CIT(A) HAS IGNORED THE MATE RIAL FINDING OF THE A.O. AND INVESTIGATION MADE DURING ASSESSMENT PROCEEDINGS. 3. THE APPLICANT CRAVES LEAVE TO ADD, TO ALTER, OR AMEND ANY GROUNDS OF THE APPEAL RAISED ABOVE AT THE TIME OF HEARING. 3. FROM THE ABOVE GROUNDS, IT WOULD BE CLEAR TH AT THE GRIEVANCE OF THE DEPARTMENT RELATES TO THE DELETION OF THE ADD ITION OF RS. 93,45,000/- MADE BY THE AO U/S 68 OF THE IT ACT 196 1 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) ON ACCOUNT OF UNAC COUNTED SALE PROCEEDS OF SHARES AND RS. 1,86,900/- ON ACCOUNT OF UNACCOUNTED COMMISSION. 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSEE FILED THE RETURN OF INCOME ON 24.10.2003 DECLARING AN INCOME OF RS. 1950/-, 4325 & 4326/ DEL/2009 3 THEREAFTER, THE AO ON THE BASIS OF INFORMATION REC EIVED FROM THE INVESTIGATION WING THAT THE ASSESSEE HAD RECEIVED A CCOMMODATION ENTRY OF RS. 96,25,000/- HAD REASON TO BELIEVE THAT THE SAID AMOUNT ESCAPED THE ASSESSMENT AND ACCORDINGLY THE CASE WAS REOPENED U/S 147 OF THE ACT, AFTER RECORDING THE REASONS. IN RESPONSE TO NOTICE U/S 148 OF THE ACT THE ASSESSEE STATED THAT THE RETURN ALREADY FILED ON 24.10.2003 MAY BE TREATED AS A RETURN FILE D. THE AO NOTICED THAT THE ASSESSEE HAD RECEIVED AMOUNTS FROM THE FOL LOWING PARTIES THROUGH CHEQUES / PAYEE ORDERS TOTALING TO RS. 93,4 5,000/-: NAME OF PART Y AMO UNT 1. ISHWAR SHARMA 1,00,000 2. PRAMOD KUMAR 2,90,000 3. RAJESH KUMAR GUPTA 3,50,000 4. ROHIT RANA 1,00,000 5. BALDEV HARISH ELECTRICALS 2,00,000 6. PROSAFE INVESTMENT PVT. LTD. 4,50,000 7. HARJEET SINGH 1,50,000 8. PARVATI VARSHNEY 2,40,000 9. MUKESH GUPTA 2,80,000 10. HARINDER DEV 2,10,000 11. ETHNIC CREATIONS P. LTD 9,00,000 12. KALPANA JHA 1,50,000 13. MAESTRO MKTG. & ADVERTISING 12,7 5,000 14. FAIR N SQUARE EXPORTS P. LTD. 9 ,50,000 15. ARUN FINVEST P. LTD. 10,00,000 16. STEERING SECURITIES P. LTD. 5,00,000 17. M.V. MARKETING P. LTD. 4,50,000 18. LABHTRONICS OVERSEAS P. LTD. 1,60 ,000 19. TASHI CONTRACTORS P. LTD. 9,00,000 20. SGC PUBLISHING P. LTD. 6 ,40,000 21. POLO LEASING & FINANCE P. LTD. 50,0 00 4325 & 4326/ DEL/2009 4 5. THE AO ISSUED NOTICES U/S 131 OF THE ACT T O THE ABOVE PARTIES FOR THE VERIFICATION OF THE IDENTITY OF THE PERSON AND THE GENUINENESS OF THE TRANSACTIONS BUT THE SUMMONS WERE RECEIVED UNSE RVED WITH THE REMARKS OF THE POSTAL AUTHORITIES AS NO SUCH PART Y. THE ASSESSEE SUBMITTED TO THE AO THAT THERE WAS NO INCREASE IN THE SHARE CAPITAL OF THE ASSESSEE AND UNSECURED LOANS DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE ALSO FURNISHED CONFIRMA TION, BANK STATEMENTS AND COPIES OF THE INCOME TAX RETURNS OF THE PARTIES FROM WHOM TRANSACTIONS HAD BEEN MADE. THE AO ASKED THE ASSESSEE TO PRODUCE THE PARTIES/ PERSONS FOR VERIFICATION OF TH E GENUINENESS OF AMOUNT IN QUESTION. THE AO MENTIONED THAT THE ASSE SSEE FAILED TO PRODUCE PARTIES FOR CROSS-VERIFICATION, THEREFORE, THE GENUINENESS OF THE TRANSACTION WAS NOT ASCERTAINED AND THAT THE A SSESSEE ROUTED ITS UNACCOUNTED MONEY IN ITS BOOKS WITH THE HELP OF ENTRY OPERATOR AND THERE WAS SYSTEMATIC PLAN FOLLOWED BY THE ASSES SEE IN WHICH CASH WAS GIVEN TO THE ENTRY PROVIDER WHO IN TURN IS SUED CHEQUES OF EQUAL AMOUNT AND FOR THIS SERVICE OF ISSUING CHEQUE S THE ENTRY OPERATOR CHARGED SOME COMMISSION. THE AO ALSO POINT ED OUT THAT DURING THE ENQUIRIES CONDUCTED BY THE INVESTIGATION WING OF THE 4325 & 4326/ DEL/2009 5 DEPARTMENT IT WAS CONCLUDED THAT THE MOST OF THE ENTRY OPERATORS WERE CHARGING COMMISSION AT THE RATE OF 2 % FOR GIV ING THE ACCOMMODATION ENTRY. THE AO HELD THAT THE ASSESSEE FAILED TO DISCHARGE ITS ONUS TO PROVE THE IDENTITY AND CREDIT WORTHINESS OF THE CONCERN PARTIES AND GENUINENESS OF TRANSACTIONS IN TERMS OF PROVISIONS OF SECTION 68 OF THE ACT AND THAT THE AM OUNT OF RS. 93,45,000/- ALLEGEDLY RECEIVED FROM THE PARTIES REP RESENTED UNACCOUNTED MONEY OF THE ASSESSEE AND THE TRANSACTI ONS WERE ONLY A CAMOUFLAGE. HE, THEREFORE, MADE THE ADDITION OF R S. 93,45,000/- AND ALSO ADDED RS. 1,86,900/- ON ACCOUNT OF COMMISS ION. RELIANCE WAS PLACED ON THE FOLLOWING CASES LAWS :- - CIT VS. PRECISION FINANCE PVT. LTD. (1994) 208 ITR 465 (CAL.) - MC. DOWELL & CO. LTD, VS. ITO. 148 IT R 154 (S.C.) 6. BEING AGGRIEVED THE ASSESSEE CARRED THE MATT ER TO THE LD. CIT(A) AND THE SUBMISSIONS MADE AS INCORPORATED IN PARA 5 OF THE IMPUGNED ORDER ARE REPRODUCED VERBATIM .AS UNDER :- THE LEARNED ITO IS QUITE DESCRIPTIVE ABOUT THE INTRODUCTION OF UNACCOUNTED MONEY IN THE SHAPE OF SHARE CAPITAL AND/ OR UNSECURED LOANS. HE HAS INVOKED THE PROVISIONS OF S EC. 68 AND HAS MADE AN ADDITION OF RS. 93,45,000/-. THIS M ONEY HAS BEEN RECEIVED DURING THIS YEAR BY THE ASSESSEE FROM 4325 & 4326/ DEL/2009 6 21 PERSONS LISTED IN ASST. ORDER BEING SAL E PROCEEDS OF SHARES HELD BROUGHT FORWARD FROM PREVIOUS YEAR AS W ELL PURCHASED IN THIS YEAR. FIRST OF ALL WE SUBMIT THAT THE TOTAL OF BAL ANCE SHEET AS ON 31/03/2003 IS 1,81,35,543/- AND THE SAME FIGURE IS THE TOTAL OF BALANCE SHEET AS ON 31/03/2002. SO, NO NEW MONEY HAS BEEN INTRODUCED DURING THE RELEVANT PREVIOUS YEAR I N ANY FORM. THE DETAILED DISCUSSION BY ITO IN HIS ASST. O RDER IS FUTILE AS NO EFFORT IS THERE TO INTRODUCE ANY BLOCK MONEY IN ANY FORM. THE ITO HAS MECHANICALLY COPIED HIS EARLI ER YEAR ORDER WITHOUT CARING TO CONSIDER THE CHANGED FACTS OF THE CASE IN THIS YEAR. THE NATURE OF ASSESSEE COMPANYS MAIN OBJECT S IS BASICALLY INVESTMENTS AND ACCORDINGLY IT HAS MADE PURCHASE AND SALES IN SHARES. DETAILS OF ALL TRANSA CTIONS WAS FILED BEFORE THE ITO. IN THIS, ALL SHARES PURCH ASED AND SOLD ARE ENLISTED WITH THE NAME OF PARTIES, ADDRESS , CHEQUE NO/BANK NAME AND AMOUNT. THESE ALL TRANSACTIONS ARE DULY RECORDED IN THE BOOKS OF ACCOUNTS. BALANCE SHEET CO PY AS ON 31/03/2003 WITH PREVIOUS YEAR FIGURES IS ATTACHE D. IT SHOWS INVESTMENTS AS ON 31/03/2002 AT RS. 1,45,01,8 00/- AND AT 1,63,78,774.77 AS ON 31/03/2003. IT MEANS TH AT SOME OF THE INVESTMENTS HAVE BEEN DISPOSED OFF AND SOME NEW INVESTMENTS HAVE BEEN MADE IN THIS YEAR. THE SU RPLUS ON SALE HAS BEEN SHOWN AS INCOME IN P&L A/C AND ASSESSED AS DECLARED BY THE ITO. THE MONEY LISTED IN ASST. ORDER IS OUT THESE AGGREGATE TO RS. 93,45,000/- ENCASHED BY SALE FOR WHICH ENTRY TO ENTRY DETAILS WERE FILED BEFORE THE ITO. SO, THESE DEPOSI TS ARE NEITHER LOAN NOR SHARE APPLICATION MONEY AS ALLEGED MINDLESSLY BY THE ITO IN HIS ORDER. SEC 68 IS FOCUS ED ON LOANS AND SHARES CAPITAL. IT DOES NOT INCLUDE SALE PROCEEDS OF GOODS. WHEN OPENING STOCK AND NEW ACQUISITION OF GOODS STANDS ACCEPTED AND CLOSING STOCK AT THE YEAR END IS ALSO ACCEPTED, THE SALE PROCEEDS CAN NOT BE DOUBTED WHERE THE PAYMENT RECEIVED IS BY CHEQUE FROM TAX PA YING ENTITY. THE THIRD PARTY MIGHT NOT APPEAR FOR CONFIR MATION, THE ITO HAD OTHER SOURCES OF DIRECT VERIFICATION. THE O NE ASSET 4325 & 4326/ DEL/2009 7 HAS CONVERTED INTO OTHER SHAPE AND NO NEW D EPOSIT IS THERE IN THIS YEAR. IT IS IMPORTANT TO MENTION THAT AN INCOME/R ECEIPT CAN BE BROUGHT TO TAX ONLY ONCE. LAW DO NOT PROVIDE FOR TA X TWICE ON A TRANSACTION. WHEN SALE PROCEEDS OF THESE SHARE S APPEAR IN CREDIT SIDE, BEING OFFERED AS INCOME, THE SAME ONCE AGAIN CAN NOT BE BROUGHT TO TAX AS INCOME FROM UNDISCLOSED SOURCES. WHAT THE ITO HAS DONE IS DOUBL E TAXATION OF SAME RECEIPT-ONCE AS SALE OF INVESTMENT S AND AGAIN AS INCOME FROM UNDISCLOSED SOURCES. THIS IS N OT CORRECT/JUSTIFIED. THE ORDER OF THE ITO (PARA 4 OF THE ORDER) SA YS THAT THE CONFIRMATIONS, BANK STATEMENTS, COPY OF THE ITRS FR OM ALL THESE PARTIES WERE FILED BEFORE HIM. PLEASE FIND EN CLOSED HEREWITH ANOTHER SET OF ALL THOSE PAPER WHICH WERE FILED BEFORE THE ITO. THESE ARE ENOUGH TO TREAT AS PROPER DISCHARGE OF ONUS BY THE ASSESSEE. KINDLY NOTE -(A) ALL ARE INCOME TAX PAYEES (B) ALL TRANSACTION ARE BY A/C PAYEE CHEQUES THRO UGH THEIR BANK A/CS. (COPY ON ITO FILE IS THERE) (C) ALL PARTIES ARE CONFIRMING THE TRANSACTIONS. (D) ROC DETAILS IN CASE OF COMPANIES. MERELY FOR CERTAIN REASONS, THESE PARTIES DID NOT A PPEAR BEFORE THE ITO IN RESPONSE TO SUMMONS U/S 131, NO ADVERSE INFERENCE CAN BE DRAWN. THE ITO HAD THEIR PAN NO. & WARD. HE COULD HAVE MADE ENQUIRY FROM THEIR RESPECT IVE WARDS. DELHI FACED LOT OF DISTURBANCE DUE TO SEALIN G AND SHIFTING OF COMMERCIAL ESTABLISHMENTS FROM RESIDENT IAL AREAS. THE NOTICE SENT BY ITO RETURNED BACK AS THE TIME WHEN TRANSACTION TOOK PLACE AND DATE OF NOTICE, THE RE IS A GAP OF OVER 6 YEARS. THE OPPORTUNITY GIVEN BY THE I TO THEREAFTER TO THE ASSESSEE WAS TOO SMALL TO JUSTIFY THE SAME. IN THIS ASSESSEES OWN CASE FOR ASST. YEAR 2 002-03 IS APPEAL NO. 124/2007-08 ORDER DATE 05/01/2009 YOUR H ONOUR IN SIMILAR CIRCUMSTANCES OR SIMILAR EVIDENCES HAVE DELETED THE ENTIRE ADDITION MADE BY THE ITO. 7. RELIANCE WAS PLACED ON THE FOLLOWING CASE L AWS :- 4325 & 4326/ DEL/2009 8 (I) ANIS AHMAD AND SONS VS. CIT(A) & ORS 297 ITR 4 41 (SC); (II) CIT VS. ORISSA CORPORATION (P) LTD (1986) 159 ITR 78 (SC); (III) SAROGI CREDIT CORPORATION VS. CIT(1976) 103 I TR 344 (PATNA) ; & (IV) DCIT VS. ROHINI BUILDER (2002) 256 ITR 360 (GU J.), 8. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISS IONS OF THE ASSESSEE OBSERVED THAT THE AO BASED HIS ARGUMENTS P URELY ON THE BASIS OF INFORMATION FROM DIT (INVESTIGATION), NEW DELHI AND ENTIRELY RELIED UPON SUCH INFORMATION FOR REACHING SUCH CONC LUSION. ACCORDING TO THE LD. CIT(A), THE INFORMATION MIGHT HAVE BEEN A SUFFICIENT GROUND TO INITIATE RE-ASSESSMENT PROCEED INGS OF A CASE BUT TO MAKE AN ADDITION, THE AO HAS TO ESTABLISH THE FACT OF FRAUDULENT NATURE OF SUCH TRANSACTION AND THAT PURELY ON SURM ISES AND CONJECTURES NO TRANSACTION COULD HAVE BEEN HELD AS BOGUS UNLESS THE SAME WAS PROVED ON THE BASIS OF SOUND REASONING AND EVIDENCE ON THE PART OF THE AO BEFORE MAKING THE ADDITION. THE LD. CIT(A) FURTHER, OBSERVED THAT THE ASSESSEE FURNISHED ALL NECESSARY PROOFS IN SUPPORT OF ITS CLAIM. IT WAS ALL THE MORE NECESS ARY TO REBUT SUCH EVIDENCE WITH COGENT AND CREDIBLE EVIDENCE ON THE PART OF THE AO BEFORE MAKING THE ADDITION. THE LD. CIT(A) POINTED OUT THAT THE AMOUNT OF RS. 93,45,000/- HAD BEEN RECEIVED DURING THE YEAR UNDER CONSIDERATION BY THE ASSESSEE FROM 21 PERSONS LISTE D IN THE 4325 & 4326/ DEL/2009 9 ASSESSMENT ORDER, HOWEVER, THE BALANCE SHEET AS ON 31 ST MARCH, 2003 REVEALED THAT NO NEW MONEY HAD BEEN INTRODUCE D DURING THE YEAR UNDER CONSIDERATION WHICH ALSO IMPLIED THAT THERE HAD NEITHER BEEN FRESH LOAN NOR FRESH SHARE CAPITAL INTRODUCED IN THE ACCOUNTS OF THE ASSESSEE COMPANY DURING THE YEAR UNDER CONSIDE RATION. THE LD. CIT(A) ALSO POINTED OUT THAT THE ACCOUNTS OF TH E ASSESSEE DID NOT LEAVE ANY ROOM FOR DOUBT THAT THE SAID AMOUNT W AS NOTHING BUT THE SALE PROCEEDS OF THE SHARES WHICH HAD ALREADY B EEN SHOWN BY THE ASSESSEE IN THE P&L ACCOUNT FOR THE A.Y. 2003- 04 AND WHEN THE PROFIT HAD ALREADY BEEN OFFERED AS INCOME, IT COUL D NOT BE BROUGHT TO TAX AGAIN IN THE SAME ASSESSMENT YEAR. THE LD. CI T(A) OBSERVED THAT THE AO COULD NOT POINT OUT ANY DISCREPANCY IN THE EVIDENCES RELIED UPON BY THE ASSESSEE AND HAD NEITHER BROUGHT OUT ANY DIRECT OR INFERENTIAL EVIDENCE TO CONTRADICT THE CONTENTIO NS OF THE ASSESSEE. 9. THE LD. CIT(A) FURTHER OBSERVED THAT EVEN TH OUGH THE AO HAS VAST POWERS U/S 131 AND 133(6) OF THE ACT, HE HAD N OT USED ANY OFFICE POWER TO VERIFY THE GENUINENESS OF THE CLAIM OF THE ASSESSEE BY VERIFYING THE DOCUMENTS FURNISHED BY IT AND IF T HE AO HAD DOUBTED THE IMPUGNED TRANSACTION AFTER RECEIVING THE EVIDEN CES WHICH HAD BEEN PRODUCED BY THE ASSESSEE IN SUPPORT OF ITS CLA IM IT WAS VERY 4325 & 4326/ DEL/2009 10 MUCH OPEN TO THE AO TO DO HIS INDEPENDENT INQUIRY A ND VERIFICATION BUT THE SAME HAD NOT BEEN DONE BY THE AO. THE LD. C IT(A) CATEGORICALLY STATED THAT THE ASSESSEE HAD ADDUCED THE DOCUMENTARY EVIDENCES IN SUPPORT OF THE TRANSACTION IN QUESTION AND THAT THE IDENTITY OF THE PURCHASERS OF THE SHARES W AS ESTABLISHED. THE LD. CIT(A) OBSERVED THAT THE PURCHASERS HAD PA N CARD AND THERE WAS NO EVIDENCE OR MATERIAL EVEN TO SUGGEST T HAT THE CHEQUES DIRECTLY OR INDIRECTLY EMANATED FROM THE ASSESSEE S O THAT IT COULD BE SAID THAT THE ASSESSEES OWN MONEY WAS BROUGHT BACK IN THE GUISE OF SALE PROCEEDS OF THE SHARES. THE LD. CIT(A) ALSO OBSERVED THAT THOUGH THE PURCHASERS OF THE SHARES COULD NOT BE EX AMINED BY THE AO, BUT THEY WERE EXISTING ON THE FILE OF THE INCO ME TAX DEPARTMENT AND THEIR INCOME-TAX DETAILS WERE MADE AVAILABLE TO THE AO, IT WAS EQUALLY THE DUTY OF THE AO TO HAVE TAKEN STEPS TO V ERIFY THEIR ASSESSMENT RECORDS AND IF NECESSARY TO ALSO HAVE TH EM EXAMINED BY THE RESPECTIVE AOS HAVING JURISDICTION OVER THEM WHICH HAD NOT BEEN DONE. THE LD. CIT(A) ACCORDINGLY DELETED THE ADDITION OF RS. 93,45,000/- MADE BY THE AO ON ACCOUNT OF ACCOMMODAT ION ENTRY AND CONSEQUENTIAL ADDITION ON ACCOUNT OF COMMISSION AMOUNTING TO 4325 & 4326/ DEL/2009 11 RS. 1,86,900/- FOR OBTAINING THE SAID ACCOMMODATION ENTRIES WAS ALSO DELETED. NOW THE DEPARTMENT IS IN APPEAL. 10. THE LD. DR REITERATED THE OBSERVATIONS MADE BY THE AO AND FURTHER SUBMITTED THAT FOR THE ASSESSMENT YEAR 2003 -04 THE SALE WAS OF RS. 20,90,309/- ONLY THEREFORE, FINDING GIVEN BY THE LD. CIT(A) WAS ERRONEOUS. IT WAS STATED THAT EVEN IF IT IS PRE SUMED THAT AMOUNTS RECEIVED ON ACCOUNT OF SALE OF SHARES HAD B EEN DIRECTLY CREDITED TO INVESTMENTS ACCOUNT IN SCHEDULE 3 OF THE BALANCE SHEET, THE FIGURES DID NOT MATCH. IT WAS FURTHER, S TATED THAT THE OPENING BALANCE OF THE INVESTMENT AS ON 1.4.2003 WA S RS. 1,45,01,800/- AND THE CLOSING BALANCE AS ON 31 ST MARCH, 2003 WAS RS. 1,63,78,774.47. AND IF SHARES WORTH RS. 93,45, 000/- HAVE BEEN SOLD AT NO LOSS NO PROFIT BASIS, ONLY THE COMPOS ITION OF INVESTMENTS WILL CHANGE BUT OPENING AND CLOSING WOULD REMAIN TH E SAME AND IF THERE WAS SOME GAIN OR LOSS IN SALE OF SHARES THE S AME IS NOT REFLECTED IN THE P&L ACCOUNT. IT WAS ALSO STATED THAT SCHEDULE 3 OF THE AUDITED BALANCE SHEET ALSO REVEALED THAT IN ALL CASES THE INVESTMENT HAD INCREASED EXCEPT FOR LAST LINE ITEMS OTHERS WHICH HAD REDUCED FROM RS. 1,31,24,800/- TO RS. 67,11,774 /-. THEREFORE, IT WOULD BE LOGICAL TO PRESUME THAT SALE OF SHARE S HAD TAKEN PLACE 4325 & 4326/ DEL/2009 12 IN RESPECT OF THIS ITEM ONLY WHICH CAME TO RS. 64,1 3,023/-WHEREAS THE FIGURES OF RECEIPTS FROM ENTRY OPERATORS WAS RS . 93,45,000/-. THE LD. DR, FURTHER, SUBMITTED THAT THE LD. CIT(A) HAD NOT EXAMINED ANY CORROBORATIVE EVIDENCE IN SUPPORT OF ASSESSEES EX PLANATION SUCH AS - NATURE OF SHARES, WHAT WAS ACQUISITION PRICE, WHAT WAS SALE PRICE, RESULTANT GAIN/LOSS, RECEIPT OF MONEY ON SA LE IN BANK ACCOUNT OF ASSESSEE, WHETHER SHARE TRANSFER FORMS EXECUTING POSITION IN ROC RECORDS REGARDING ACTUAL HOLDING ETC., THEREFO RE, THE EXPLANATION FURNISHED BY THE ASSESSEE DID NOT MATCH WITH THE FIGURES & NUMBERS REFLECTED IN THE AUDITED BALANCE SHEET AS SUCH FINDINGS OF THE LD. CIT(A) WERE ERRONEOUS. HE ALSO SUBMITTED TH AT THE MATTER MAY BE REMANDED BACK TO THE AO FOR AN IN-DEPTH EXAM INATION OF RELEVANT FACTS AND THE EVIDENCES. 11. IN HIS RIVAL SUBMISSIONS, THE LD. COUNSEL FO R THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW AND FURTHER SUBMITTED THAT THE ASSESSEE WAS HAVING INVE STMENT IN SHARES ETC. WHICH WERE DULY SHOWN ON THE ASSET ASIDE OF TH E BALANCE SHEET, OUT OF THOSE INVESTMENTS SOME WERE SOLD AND FEW NEW WERE PURCHASED AND IF THERE WAS ANY GAIN ON THE SALE THE SAME WAS OFFERED FOR TAXATION. IT WAS FURTHER SUBMITTED THAT IN EARLIER YEAR 4325 & 4326/ DEL/2009 13 UNDER SIMILAR CIRCUMSTANCES, THE CASE WAS REOPENED U/S 147 OF THE ACT AND THE ADDITION MADE BY THE AO WAS DELETED BYT HE I.T.A.T. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE SOLD THE S HARES WHICH WERE EARLIER PURCHASED IN DIFFERENT YEARS AND DULY SHOWN IN THE BALANCE SHEET OF THE RESPECTIVE YEARS AND THAT THE ASSESSEE HAD SHOWN THE SALE PROCEEDS IN THE BOOKS OF ACCOUNTS, THE INVESTM ENTS WERE REDUCED AFTER MAKING THE SALES. IT WAS CONTENDED TH AT THERE WAS NO OBLIGATION UNDER THE LAW THAT THE ASSESSEE WAS REQ UIRED TO PROVE THE SOURCE OF PAYEE. IT WAS FURTHER CONTENDED THAT THE AO HAD NOT REJECTED THE BOOKS OF ACCOUNTS AND THE PURCHASES WE RE DULY ACCEPTED SO THERE WAS NO REASON TO DOUBT THE SALES . IT WAS SUBMITTED THAT THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. M/S VISHAL HOLDING AND CAPITAL PVT. LTD. IN ITA NO. 178 8/DEL/2009 ORDER DATED 17.07.2009 WHICH HAS BEEN UPHELD BY THE HONB LE JURISDICTIONAL HIGH COURT AS REPORTED IN (2011) 200 TAXMAN 186 (DELHI). IT WAS FURTHER, SUBMITTED THAT THE ISSUE I S ALSO COVERED BY THE ORDER OF THE ITAT, DELHI BENCH IN THE CASE OF ITO V S. GOODWILL CRESEC PVT. LTD. IN ITA NO. 4151/DEL./2010 ORDER D ATED 25.01.2012. RELIANCE WAS ALSO PLACED ON THE FOLLOWING CASES LAW S :- 4325 & 4326/ DEL/2009 14 1. CIT VS. SH. UDIT NARAIN AGGARWAL, ITA NO. 560 O F 2009, DT. 12.12.2012 2. CIT VS. SUDEEP GOENKA, ITA NO. 468 OF 2009, DT. 3.01.2013. 3. CIT VS. ANIRUDH NARAIN AGGARWAL, ITA NO. 195 OF 2010, DT. 16.01.2013. IT WAS POINTED OUT THAT THE SAME ISSUE HAS BEEN DECIDE D BY THE I.T.A.T. IN ASSESSEES OWN CASE IN I.T.A.T. NO. 1584/DEL./2009 FOR THE A.Y. 2002-03 VIDE ORDER DATED 13.11.2009, I N ASSESSEES FAVOUR (COPY OF THE ORDER WAS FURNISHED WHICH IS P LACED ON RECORD) 12. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH TH E PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE ASSESSEE PURCHASED T HE SHARES IN EARLIER YEARS WHICH WERE SHOWN AS INVESTMENT IN THE BOOKS OF ACCOUNTS AND REFLECTED IN THE ASSET SIDE OF THE BALANCE SHEET , OUT OF THOSE INVESTMENTS (COPY WHICH IS PLACED AT PAGE NO. 23 AN D 24 OF THE ASSESSEES PAPER BOOK), THE ASSESSEE SOLD CERTAIN INVESTMENTS AND ACCOUNTED FOR THE PROFIT / LOSS AND OFFERED THE SAM E FOR TAXATION. IN THE PRESENT CASE, THE AMOUNT IN QUESTION WAS NEITH ER A LOAN OR THE DEPOSIT , IT WAS ALSO NOT ON ACCOUNT OF SHARE APPLI CATION MONEY, THE SAID AMOUNT WAS ON ACCOUNT OF SALE OF INVESTMENT T HEREFORE THE PROVISIONS OF SECTION 68 OF THE ACT WERE NOT APPLIC ABLE AND THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION. IN OUR OP INION, THE LD. CIT(A) RIGHTLY DELETED THE ADDITION MADE BY THE AO. 4325 & 4326/ DEL/2009 15 13. ON A SIMILAR ISSUE THE HONBLE JURISDICTIONA L HIGH COURT IN THE CASE OF CIT VS. VISHAL HOLDING AND CAPITAL PVT. LTD . VIDE ORDER DATED 9 TH AUGUST, 2010 UPHELD THE ORDER DATED 30.7.2009 OF T HE ITAT IN ITA NO. 1788/DEL/2007 FOR THE ASSESSMENT YEAR 2000-2001 WHEREIN THE ORDER OF THE LD. CIT(A) MAKING THE SIMILAR DELETION WAS UPHELD BY OBSERVING IN PARA 6 AS UNDER :- WE ARE OF THE VIEW THAT THE ASSESSEE HAD PRODUCED COPIES OF ACCOUNTS, BILLS AND CONTRACT NOTES ISSUED BY M/S . MKM FINSEC PVT. LTD., AND HAD BEEN MAINTAINING BOOKS OF ACCOUNT AS PER COMPANIES ACT. THE ASSESSEE HAD ALSO DEMONSTRATED THE PURCHASE AND SALE OF SHARES OVER A PERIOD OF TIME AS SEEN FROM THE BALANCE SHEETS. IN OUR OP INION, THE ASSESSING OFFICER HAS SIMPLY ACTED ON THE INFORMATI ON RECEIVED FROM THE INVESTIGATION WING WITHOUT VERIFY ING THE DETAILS FURNISHED BY THE ASSESSEE. THE ASSESSEE HAS ALSO PRODUCED BEST POSSIBLE EVIDENCE TO SUPPORT ITS CLAI M. CONSEQUENTLY THE ADDITION MADE BY THE ASSESSING OFF ICER CANNOT BE SUSTAINED. 14. WE, THEREFORE, CONSIDERING THE TOTALITY OF T HE FACTS DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). ACCORDINGLY, WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. IN ITA NO. 4326/DEL./2009 OF THE ASSES SMENT YEAR 2004- 05 IDENTICAL ISSUE HAVING SIMILAR FACTS IS INVOLVE D, THE ONLY DIFFERENCE IS IN THE AMOUNT OF ADDITION WHICH WAS DELETED BY T HE LD. CIT(A). THEREFORE, OUR FINDINGS GIVEN IN FORMER PART OF THI S ORDER, IN RESPECT OF 4325 & 4326/ DEL/2009 16 ASSESSMENT YEAR 2003-04, SHALL APPLY MUTATIS MUTAND IS FOR ASSESSMENT YEAR 2004-05. IN THE RESULT, APPEALS OF THE DEPARTMENT ARE DISMIS SED. (ORDER PRONOUNCED IN OPEN COURT ON 27 TH MAY, 2015.) SD/- SD/- (I.C.SUDHIR) (N.K.SAINI) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED 27 TH MAY, 2015 B.RUKHAIYAR COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT (ITAT), NEW DELHI. AR, ITAT N. DELHI 4325 & 4326/ DEL/2009 17