ACIT, New Delhi V. Sh. Gurnam Arora, New Delhi

ITA 4863/DEL/2011

• Counselvise Citation: 486320114 RSA 2011
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 05-01-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 03-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIS GILL
• Assessee Lawyers: SALIL KAPOOR ANKIT GUPTA; VIKAS JAIN ARS
• Keywords: Source of fund; Additional evidence
• Section: 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI C BENC H BEFORE SHRI R.P. TOLANI, JM & SHRI A.N. PAHUJA, AM ITA NO.4863/DEL/2011 ASSESSMENT YEAR:2002-03 ASSISTANT CIT CENTRAL CIRCLE-22, NEW DELHI V/S . SHRI GURNAM ARORA, 201, VIPPS CENTRE, 2 ,COMMUNITY COMPLEX, MASJID MOTH, G.K.-II, NEW DELHI ( PAN AAJPA 1064 F ) (APPELLANT) (RESPONDENT) ASSESSEE BY S/SHRI SALIL KAPOOR, ANKIT GUPTA & VIKAS JAIN, ARS REVENUE BY SHRI R.I.S. GILL, DR DATE OF HEARING 05-01-2012 DATE OF PRONOUNCEMENT 13-01-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 03.11.2011 BY THE REVENUE AGA INST AN ORDER DATED 23.08.2011 OF THE LEARNED CIT(A)-III, NEW DE LHI FOR THE AY 2002-03 , RAISES THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING TH E ADDITION OF ` ` 13,78,925/- MADE BY THE ASSESSING OFFICER ON ACCOUN T OF SALE OF SHARES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN ADMITTING A DDITIONAL EVIDENCE UNDER RULE 46A WHICH WAS NOT SUBMITTED BEF ORE THE ASSESSING OFFICER IN SPITE OF SEVERAL OPPORTUNITIES GIVEN TO THE ASSESSEE. 3. THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. ITA NO.4863/DEL./2011 2 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF TH E HEARING OF THE APPEAL. 2. ADVERTING FIRST TO GROUND NOS.1 & 2IN THE APPEA L, FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING INCOM E OF ` `53,13,045/-WAS FILED ON 28.10.2002 BY THE ASSESSEE. SUBSEQUENTLY, A SEARCH U/S 132 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS CONDUCTED IN THE PREMISES OF KOHINOOR FOODS LTD. GROUP OF CASES, INCLUDING THE A SSESSEE, ON 5 TH DECEMBER, 2007. CONSEQUENTLY, IN RESPONSE TO A NOTICE U/S 15 3A OF THE ACT, THE ASSESSEE FILED RETURN DECLARING INCOME OF ` ` 53,13,045/- ON 06.02.2009. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (A .O. IN SHORT) NOTICED THAT THE ASSESSEE SOLD 2000 SHARES OF M/S RANBAXY LAB. LTD. FOR A CONSIDERATION OF ` ` 13,78,925/- . IN RESPONSE TO A LETTER DATED 09.12.2 009 ISSUED BY THE AO, SEEKING DETAILS OF SALE AND PURCHASE OF THESE SHARE S, THE ASSESSEE DID NOT SUBMIT ANY REPLY. IN THE ABSENCE OF ANY EVIDENCE T O CORROBORATE THE CLAIM OF THE ASSESSEE, THE AO TREATED THE ENTIRE RECEIPT OF ` ` 13,78,925/- AS INCOME FROM OTHER SOURCES. 3. ON APPEAL, THE LEARNED CIT(A), AFTER ADMITTING ADDITIONAL EVIDENCE AND HAVING A REMAND REPORT FROM THE AO AS ALSO THE COMMENTS OF THE ASSESSEE THEREON, CONCLUDED AS UNDER:- 5. UPON A CAREFUL CONSIDERATION OF THE SUBMISSION S MADE BY THE APPELLANT, THE REMAND REPORT OF THE A.O. AND TH E COUNTER REPLY OF THE APPELLANT, IT IS SEEN THAT GROUND NO.1 TO 3 ARE ALL ESSENTIALLY ON THE SINGLE ISSUE THAT WHETHER THE INVESTMENT MAD E BY THE APPELLANT IN 2,000 SHARES OF RANBAXY LTD. IN THE FI NANCIAL YEAR 1999-2000 WERE DISCLOSED TO THE REVENUE AND WERE IN VESTED OUT OF ITS ACCOUNTED SOURCES OF INCOME OR NOT AND WHETHER THE SUBSEQUENT SALE OF THESE SHARES IN PERIOD RELEVANT TO A Y 02-03 HAVE, ACCORDINGLY RESULTED IN PROFIT OF RS.46,965/- WHICH HOWEVER WORKS OUT AS LOSS FOR RS.79,724/- AS PER COMPUTATIO N OF INCOME, AFTER THE BENEFIT OF INDEXATION IS GIVEN ON THESE S HARES. THE APPELLANT'S SUBMISSION IS THAT THE COST OF ACQU ISITION OF THESE SHARES IS FOR RS.13,31,960/- IN THE YEAR ENDING 31. 03.2000 FOR ITA NO.4863/DEL./2011 3 WHICH PAYMENTS HAVE BEEN MADE FROM THE APPELLANT'S ACCOUNT IN M/S SATNAM OVERSEAS (EXPORTS) WHERE THE APPELLANT I S A PARTNER. IN SUPPORT OF HIS CONTENTION THE APPELLANT HAS PROVIDE D THE STATEMENT OF ACCOUNT APPEARING IN BOOKS OF ACCOUNTS OF SATNAM OVERSEAS (EXPORTS) IN FY 1999-2000. FURTHER THE STATEMENT OF APPELLANT'S ACCOUNT WITH M/S JMC INVESTMENT CONSULTANTS, THE 'S TOCK AND SHARE BROKERS', TO WHOM THE PAYMENT HAS BEEN MADE, HAS ALSO BEEN PROVIDED. THE INVESTMENT HAS ALSO BEEN SHOWN I N THE BALANCE SHEET FOR THE YEAR ENDING 31.03.2000. THE APPELLANT HAS SUBSEQUENTLY SOLD HIS SHARES FOR A SALE OF CONSIDER ATION OF RS. 13,78,925/-: IN FY 2001-02 TO CM COMPOSITE SECURITI ES LTD. BETWEEN 12.09.01 TO 07.11.01, AS SEEN FROM THE TRAN SACTION STATEMENT FILED OF HIS SHARES DEPOSITORY ALANKIT AS SIGNMENTS LTD.. FURTHER, FROM THE STATEMENT OF INCOME FILED WITH TH E ORIGINAL RETURN OF INCOME FILED IT IS SEEN THAT THE APPELLANT HAS S HOWN TOTAL EXEMPTED DIVIDEND INCOME FOR RS.81,268/- THE BREAKU P OF WHICH INCLUDES A DIVIDEND OF RS.15,000/- RECEIVED ON ACCO UNT OF SHARES OF RANBAXY INDIA LTD. ON 05.07.2001. THE COPY OF DIVID END WARRANT DATED 04.07.01 HAS ALSO BEEN ENCLOSED IN THE SUBMIS SIONS. KEEPING IN VIEW THE ABOVE DETAILS, WHICH HAVE BEEN PLACED ON RECORD, IT IS APPARENT THAT THE TRANSACTION WITH RE SPECT TO INVESTMENT IN 2,000 SHARES OF RANBAXY LTD IN FY 1999-2000 AND IT'S SUBSEQUENT SALE IN FY 2001-02 IS EXPLAINED FOR AND THEREFORE THE ADDITION MADE FOR RS.13,78,925/- WHICH APPEARS TO B E BASED ON THE ASSUMPTION THAT THIS INVESTMENT WAS UNDISCLOSED, IS FOUND TO BE INCORRECT AND THEREFORE IS LIABLE TO BE DELETED. EVEN OTHERWISE, SINCE THIS TRANSACTION HAD BEEN REF LECTED IN EARLIER RETURN OF INCOME FILED ON 28.10.02 AND THE INCOME S TATEMENT SUBMITTED WITH THE RETURN AND AS NOTHING INCRIMINAT ING HAS BEEN FOUND WITH REFERENCE TO SUCH INVESTMENT DURING THE COURSE OF SEARCH, THEREFORE THE RATIO OF THE DECISIONS IN ANI L KUMAR BHATIA, LMJ INTERNATIONAL LTD., ANIL P. KHEMANI (SUPRA) ARE SQUARELY APPLICABLE TO THE FACTS OF THE CASE. THUS ON MERITS AS WELL AS RELYING ON THE RATIO OF T HE AFORESAID DECISIONS THE ADDITION MADE FOR RS.13,78,925/- IS D IRECTED TO BE DELETED. ACCORDINGLY THE GROUND OF APPEAL NO.1 TO 3 ARE ALLOWED. 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A).THE LD. DR SUPPORTED THE ORDER OF THE AO WHILE THE LD. AR ON BEHALF OF THE ASSESSEE RELIED UPON THE FINDIN GS OF THE LD. CIT(A). ITA NO.4863/DEL./2011 4 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROU GH THE FACTS OF THE CASE. INDISPUTABLY, THE LD. CIT(A), AFTER ALLOWING OPPORT UNITY TO THE AO AND HAVING A REMAND REPORT FOUND THAT THE ASSESSEE ACQUIRED 2, 000 SHARES OF RANBAXY LAB. LTD IN THE FY 1999-2000 FOR A CONSIDERATION OF ` 13,31,960/- AND THE PAYMENTS WERE MADE FROM THE ASSESSEES ACCOUNT WITH M/S SATN AM OVERSEAS (EXPORTS), WHEREIN THE ASSESSEE IS A PARTNER. THE INVESTMENT H AS BEEN SHOWN IN THE BALANCE SHEET AS ON 31.03.2000. THESE SHARES WERE S UBSEQUENTLY SOLD FOR A CONSIDERATION OF ` . 13,78,925/- IN THE YEAR UNDER CONSIDERATION, AS REVEALED FROM FROM THE TRANSACTION STATEMENT OF THE SHARES DEPOSI TORY ALANKIT ASSIGNMENTS LTD.. ACCORDINGLY, THE LD. CIT(A) CONCLUDED THAT INVESTME NT IN 2,000 SHARES OF RANBAXY LAB LTD IN THE FY 1999-2000 AND ITS SUBSEQU ENT SALE IN FY 2001-02 IS EXPLAINED AND DELETED THE ADDITION. THE REVENUE H AVE NOT PLACED BEFORE US ANY MATERIAL, CONTROVERTING THESE FINDINGS OF THE L D. CIT(A) NOR PLACED BEFORE US ANY MATERIAL SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER. IN THESE CIRCUMSTANCES, ESPECIALLY WHEN INVESTMENT IN THE AF ORESAID SHARES WAS MADE IN THE FY ENDING 31.3.2000 AND NOT IN THE YEAR UNDER C ONSIDERATION AND SOURCES OF INVESTMENT THEREIN HAVE BEEN EXPLAINED BEFORE THE L D. CIT(A), WE ARE NOT INCLINED TO INTERFERE. THEREFORE, GROUND NO.1 IN THE APPEAL IS DISMISSED. 6. AS REGARDS GROUND NO.2 ,NO SEPARATE SUBMISSI ONS OR ARGUMENTS HAVE BEEN MADE BEFORE US BY THE LD. DR ON ADMISSION OF ADDITI ONAL EVIDENCE BY THE LD. CIT(A). CONSEQUENTLY, THIS GROUND DOES NOT SURVIVE FOR OUR ADJUDICATION AND IS DISMISSED . HOWEVER, WE MAY CLARIFY THAT EVEN THOUG H THE LD. CIT(A) DOES NOT APPEAR TO HAVE RECORDED ANY REASONS ,IN WRITING, AS STIPULATED IN RULE 46A(2) OF THE IT RULES,1962, BEFORE ADMITTING ADDITIONAL EVID ENCE ,WE ARE OF THE OPINION THAT NO USEFUL PURPOSE WOULD BE SERVED IN REMANDING THE MATTER BACK TO THE LD. CIT(A), ESPECIALLY WHEN THE AO HAS BEEN GIVEN SUFFI CIENT OPPORTUNITY AND THE INVESTMENT WAS FOUND TO HAVE BEEN MADE IN THE FY EN DING 31.3.2000 AND NOT IN THE YEAR UNDER CONSIDERATION .MOREOVER, THE LD. CIT (A) HAS INHERENT POWERS IN TERMS OF RULE 46A(4) OF THE IT RULES,1962 TO DIREC T THE PRODUCTION OF ANY ITA NO.4863/DEL./2011 5 DOCUMENT, OR THE EXAMINATION OF ANY WITNESS, TO ENA BLE HIM TO DISPOSE OF THE APPEAL, OR FOR ANY OTHER SUBSTANTIAL CAUSE . 7. GROUND NO.3 IN THE APPEAL, BEING GENERAL IN NA TURE NOR ANY SUBMISSIONS HAVING BEEN MADE BEFORE US ON THIS GROUND , DOES NO T REQUIRE ANY SEPARATE ADJUDICATION WHILE NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND NO. 4 IN THE APPEAL, ACCORDINGLY, BOTH THESE GROUNDS ARE DISMISSED. 8. NO OTHER SUBMISSION OR ARGUMENT WAS MADE BEF ORE US. 9. IN THE RESULT APPEAL IS DISMISSED. SD/- SD/- (R.P. TOLANI) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NS COPY OF THE ORDER FORWARDED TO :- 1. ASSTT. C.I.T., CENTRAL CIRCLE-22, NEW DELHI. 2. SHRI GURNAM ARORA, 201, VIPPS CENTRE, 2 COMMUNIT Y COMPLEX, MASJID MOTH, G.K.-II, NEW DELHI 3. CIT(A)-III, NEW DELHI. 4. CIT CONCERNED. 5. DR, ITAT,C BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI ORDER PRONOUNCED IN OPEN COURT