Preeti Agrawalla, Dhenkanal V. ITO, Dhenkanal

ITA 474/CTK/2011

• Counselvise Citation: 47422114 RSA 2011
• Duration Of Justice: 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 20-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 21-11-2011
• Court: TRIBUNAL
• Department Lawyers: A BHATTACHARJEE
• Assessee Lawyers: D K SETHK SETH ARS
• Keywords: Income from undisclosed sources; Assessment record

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM ITA NOS.474 AND 475/CTK/2011 (ASSESSMENT YEAR 2006 - 07 & 2007 - 08 RESPECTIVELY ) ITA NO.475/CTK/2011 1. SAGARMAL AGRAWALLA, ANAN D BAZAR, DHENKANAL - 759001. PAN : ADAPA 6805 A ITA NO.474/CTK/2011 2. SMT. PREETI AGRAWALLA, C/O. KALINGA JUTE PRODUCTS PVT. LTD., ANAND BAZAR, DHENKANAL PAN: ACEPA 5312 K VERSUS INCOME - TAX OFFICER , WARD 1, DHENK ANAL (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI D.K.SETH/K.SETH, ARS FOR THE RESPONDENT SHRI A.BHATTACHARJEE, DR DATE OF HEARING : 20.12.2011 DATE OF PRONOUNCEMENT : 13.01.2012 ORDER SHRI K.S.S.PRA SAD RAO, JM : THESE TWO APPEALS ARE FILED BY TWO DIFFERENT ASSESSEES AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME - TAX (APPEALS) FOR THE ASSESSMENT YEAR 2006 - 07 AND 2007 - 08 RESPECTIVELY . SINCE, COMMON ISSUES ARE INVOLVED IN BOTH THE APPEALS, THESE TWO A PPEALS WERE HEARD TOGETHER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE COMMON ISSUE INVOLVED IN THESE TWO APPEALS ARE THAT THE LEARNED CIT(A) IS WHOLLY UNJUSTIFIED TO UPHOLD ADDITION OF 27,07,836 (IN CASE OF THE ASSESSEE SRI SAGARMAL AGARWAL L A) AND 28,88,361 (IN CASE OF ASSESSEE SMT.PREETI AGARWALLA) AS INCOME FROM UNDISCLOSED SOURCES IN PLACE OF INCOME SHOWN BY THE ASSESSEES AS INCOME FROM EXEMPTED LONG TERM CAPITAL GAINS IN SHARES. 3. ON CAREFULLY CONSIDERATION OF THE M ATERIAL AVAILABLE ON RECORD IN THE LIGHT OF THE RIVAL SUBMISSIONS OF THE ASSESSEE, THE UNDISPUTED FACTS ARE THAT DURING THE ASSESSMENT YEAR UNDER CONSIDERATION THE ASSESSING OFFICER FOUND THAT THE ASSESSEE SRI SAGARMAL AGARWALLA HAS SHOWN LONG TERM CAPITAL GAINS ITA NOS.474 AND 475/CTK/2011 2 OF 38,13,361 FROM PURCHASE AND SALE OF 14000 SHARES OF BRAHMANAND HIMSAGAR LTD. IN THE CASE OF THE ASSESSEE SMT. PREETI AGARWALLA, THE ASSESSING OFFICER FOUND THAT SHE HAS SHOWN LONG TERM CAPITAL GAINS FROM PURCHASE AND SALE OF 15000 SHARES OF BRAHMANAND HI MSAGAR LTD. THE ASSESSING OFFICER OBSERVED THAT THE SHARE PRICE OF THE /COMPANY ROSE FROM 05 TO 188 WITHIN A SPAN OF TWO YEARS FOUR MONTHS IN CASE OF THE ASSESSEE S AGARMAL AGARWALLA, AND ONE YEAR AND EITHER MONTHS IN CASE OF THE ASSESSEE SMT.PREETI AGA RWALLA. THEREFORE, HE CONDUCTED ENQUIRY BY REFERRING TO THE SEBI AND CALCUTTA STOCK EXCHANGE U/S.136 OF THE INCOME - TAX ACT,1961 AND HE RECEIPT REPORT FROM THEM AND FROM THE REPORT, HE FOUND THAT THE BROKERS HAVE COMMITTED CROSS DEALS IN THE SHARES RESULTIN G IN CORRESPONDING INCREASE IN THE PRICE OF SHARES. THEREAFTER RELYING ON THE DECISIONS RENDERED IN THE CASE OF SUMATI DAYAL V. CIT [214 ITR 801 (SC)], THE ASSESSING OFFICER ASSESSED THE CAPITAL GAINS CLAIMED BY THE ASSESSEE AS INCOME DERIVED FROM UNDISCLO SED SOURCES AND TAXED THE SAME. AGGRIEVED BY THE ORDERS OF THE LEARNED CIT(A), THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A ). BEFORE THE LEARNED CIT(A), THE ASSESSEES HAVE RELIED ON THE DECISIONS OF THE ITAT, CUTTACK BENCH IN THE CASE OF JUHI AGRAWAL IN IT A NO.113/CTK/2010 DT.18.11.2010 AND IN THE CASE OF RAJBALA AGRAWAL & ORS IN ITA NO.104 TO 108/CTK/2010 DT.25.1.2011. THE LEARNED CIT(A) , AFTER HEARING THE ASSESSEES AND CONSIDERING THE ASSESSMENT RECORD AND TAKING INTO CONSIDERATION THE VIEWS TAKEN BY THE ASSESSING OFFICER AND RELYING ON THE DECISION OF THE ITAT, CUTTACK IN THE CASE OF MAHESH PRASAD AGRAWAL IN ITA NO.230/CTK/2008 DT.28.8.2009, UPHELD THE ACTION OF THE ASSESSING OFFICER, AGAINST WHICH THE ASSESSEES HAVE FILED THE PRESENT APPEALS BEFORE THE TRIBUNAL. 4. DURING THE COURSE OF HEARING, THE LEARNED AR OF THE ASSESSEE HAS ARGUED CONTENDING INTER ALIA THAT BOTH THE DEPARTMENTAL AUTHORITIES HAVE ITA NOS.474 AND 475/CTK/2011 3 ENTERTAINED DOUBTS ABOUT THE CAPITAL GAINS WITHOUT POINTING OUT AS TO HOW THE CAPITAL GAINS OFFERED BY T HE ASSESSEES. THEY HAVE DOUBTED THE CAPITAL GAINS SHOWN BY THE ASSESSEES BASING ON THE REPORT RECEIVED FROM THE CALCUTTA STOCK EXCHANGE, BUT AS CAN BE SEEN FROM THE IMPUGNED ORDERS THAT THE REPORT SO RECEIVED FROM CALCUTTA STOCK EXCHANGE AS A RESULT OF NOT ICE U/S.136 WAS NOT PUT TO THE ASSESSEES AND THE DEPARTMENTAL AUTHORITIES HAVE SIMPLY RELIED ON THAT REPORT IN PASSING THE ASSESSMENT ORDERS AND UPHELD BY THE LEARNED CIT(A). THE LEARNED AR OF THE ASSESSEE CONTENDED THAT ON THE ENTIRETY OF FACTS AND CIRCUM STANCES OF THE CASE, IT IS CLEARLY PROVED THAT THE DEPARTMENTAL AUTHORITIES HAVE NOT BROUGHT OUT ANY POSITIVE MATERIAL TO BELIE THE CLAIM OF THE ASSESSEES AND THEY HAVE RELIED ON THE EVIDENCE COLLECTED BEHIND THE BACK THE ASSESSEE AND NOT PUTTING TO THE AS SESSEE THOSE EVIDENCES BASING ON WHICH THEY HAVE PASSED THEIR RESPECTIVE ORDERS IN QUESTION. 5. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. 6. HAVING HEARD BOTH THE PARTIES AND CONSIDERING THE MATERIAL AVAILAB LE ON RECORD, WE FIND THAT ITAT, CUTTACK BENCH HAS PASSED AN ORDER DT.18.11.2011 IN THE CASE OF BINA DIDWANIA V. ASST. COMMISSIONER OF INCOME - TAX IN ITA NO.452/CTK/2011 ON VERY MUCH SIMILAR CIRCUMSTANCES THOSE WERE CONSIDERED BY THE DEPARTMENT FOR MAKING T HE ASSESSMENT IN THAT CASE HAS BEEN NEGATIVE BY THE TRIBUNAL. HENCE, RELYING ON THE RULE OF PRECEDENCE, WE FOLLOW THE SAID ORDER OF THE ITAT IN THE CASE OF BINA DIDWANIA,THE FACTS AND CIRCUMSTANCES BEING SIMILAR AS IN THE PRESENT CASES IN HAND, WE ARE OF THE CONSIDERED VIEW THAT THE ADDITION MADE ON THIS SCORE TO THE TOTAL INCOME OF THE RESPECTIVE ASSESSEES BEFORE US, IS UNSUSTAINABLE FOR LEGAL SCRUTINY AND THE SAID ADDITION IS HEREBY DELETED IN RESPECT OF BOTH THE ASSESSEES . ITA NOS.474 AND 475/CTK/2011 4 7. BESIDES THE ABOVE ISSUE, I N ITA NO.474/CTK/2011 IN CASE OF THE ASSESSEE SMT.PREETI AGRAWALLA, THE ASSESSEE HAS RAISED ANOTHER ISSUE THAT THE LEARNED CIT(A) IS WHOLLY UNJUSTIFIED TO CONFIRM THE ACTION OF THE ASSESSING OFFICER IN ESTIMATING THE AGRICULTURAL INCOME SHOWN BY THE ASSESS EE ATRS.4,41,748 TO 3,25,990 AND TREATING THE BALANCE AS INCOME FROM OTHER SOURCES. 8. HAVING HEARD BOTH THE PARTIES AND PERUSING THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW, IT IS SEEN THAT THE ASSESSEE HAS SHOWN AGRICULTURAL INCOME OF 4,41,748 AND S HE HAS OFFERED AGRICULTURAL INCOME THEREFROM. BUT THE ASSESSING OFFICER HAS DOUBTED ABOUT THIS AGRICULTURAL INCOME MERELY OBSERVING THAT THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE IS EXCESSIVE AS COMPARED TO THE LAND POSSESSED AND CROPS YIELDED. BUT HE HAS NOT GIVEN ANY DETAIL EITHER THE EXTENT OF LAND AND DETAILS OF THE CROPS. ADMITTEDLY THE ASSESSEE IS HAVING 6.05 ACRES OF AGRICULTURAL LAND AND SHE GAVE THE DETAILS OF CROPS RAISED BY HER IN THE SAID LAND AND THE SALE PROCEEDS RECEIVED BY HER ON SALE O F AGRICULTURAL PRODUCES. WHILE REDUCING THE AGRICULTURAL INCOME OFFERED BY THE ASSESSEE, THEAO HAS NOT POINTED OUT ANY POSITIVE MATERIAL TO SHOW THAT THE AGRICULTURAL INCOME OF THE ASSESSEE IS EXCESSIVE. THEREFORE, THE ESTIMATION MADE BY THE ASSESSING OFFI CER IS NOT SUSTAINABLE FOR LEGAL SCRUTINY. IN THIS VIEW OF THE MATTER, THE IMPUGNED ORDER OF THE LEARNED CIT(A) IN THIS REGARD IS SET ASIDE AND THE ADDITION MADE ON THIS SCORE IS HEREBY DELETED. 9. IN THE RESULT, BOTH THE APPEALS FILED BY THE RESPECTIVE AS SESSEES ARE ALLOWED. SD/ - SD/ - (K.K.GUPTA) ACCOUNTANT MEMBER ( K.S.S.PRASAD RAO) JUDICIAL MEMBER DATE: 13.01.2012 H.K.PADHEE, SENIOR PRIVATE SECRETARY. ITA NOS.474 AND 475/CTK/2011 5 COPY OF THE ORDER FORWA RDED TO : 1. THE APPELLANT: 1. SAGARMAL AGRAWALLA, ANAND BAZAR, DHENKANAL - 759001. PAN : ADAPA 6805 A 2. SMT. PREETI AGRAWALLA, C/O. KALINGA JUTE PRODUCTS PVT. LTD., ANAND BAZAR, DHENKANAL PAN: ACEPA 5312 K 2. THE RESPONDENT: INCOME - TAX OFFICER , WARD 1, DHENKANAL 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.