Vinay Kumar Agarwal, Kanpur V. Income Tax Officer, Kanpur

ITA 492/LKW/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4784 (ITAT-LUCKNOW)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-01-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 13-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 492/LKW/2015 ASSESSMENT YEAR: 2002 - 03 VINAY KUMAR AGARWAL 204 - C, BLOCK PANKI KANPUR V . INCOME TAX OFFICER WARD 2(4) KANPUR T AN /PAN : ACFPA1437J (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. ABHINAV MEHROTRA, ADVOCATE RESPONDENT BY: SHRI. AMIT NIGAM, D.R. DATE OF HEARING: 14 01 201 6 DATE OF PRONOUNCEMENT: 03 02 201 6 O R D E R PE R SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON THE FOLLOWING GROUNDS: - 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN NOT APPRECIATING THAT NOTICE UNDER SECTION 148 HAD BEEN ISSUED ON THE BASIS OF GENERAL STATEMENT OF SMT. SUSHILA DEVI, PROP. M/S ANU SECURITIES AND SHRI MUKESH KUMAR GUPTA DIRECTOR OF M/S. C.M.S SECURITIES LTD. (APPEALS) WHICH WAS RECORDED BEHIND THE BANK OF THE ASSESSEE AND THEREFORE THE ENTIRE ASSESSMENT PROCEEDINGS ARE VITIATED. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AS WELL AS ON FACTS IN CONFIRMING ADDITION OF RS. 9,94,385 / - TREATING THE SAME AS FICTITIOUS LONG TERM CAPITAL : - 2 - : GAINS WITHOUT APPRECIATING FACTS OF THE CASE G IVING UNDUE EMPHASIS TO THE STATEMENT OF SHRI MUKESH KUMAR GUPTA AND SMT. SUSHILA DEVI OF M/S. ANU SECURITIES. 3. THAT THE ID. COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN LAW AS WELL AS ON FACTS IN NOT APPRECIATING THAT NO CONFRONTATION HAS BEEN ALLOWED TO THE APPELLANT AND THUS THE STATEMENT OF SHRI MUKESH KUMAR GUPTA AND SMT. SUSHILA DEVI OF M/S. ANU SECURITIES HAS BEEN USED BEHIND THE BACK OF THE APPELLANT. 4. THAT THE ID. COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN LAW AS WELL AS ON FACTS IN NOT APPRECIATING THAT NO SPECIFIC QUESTION REGARDING THE APPELLANT WAS ASKED PERTAINING TO THE TRANSACTION OF SALE AND PURCHASE OF SHARES WHILE EXAMINING ON OATH IN THE CASE OF SHRI MUKESH KUMAR GUPTA AND SMT. SUSHILA DEVI OF M/S. ANU SECURITIES. 5. THAT THE ID. COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN LAW AS WELL AS ON FACTS IN NOT APPRECIATING THAT THE A.O. COULD NOT BRING ANYTHING ON RECORD THAT THE ASSESSEE HAD PAID SO MUCH CASH EQUAL TO THE CAPITAL GAINS TO SMT. SUSHILA DEVI OF M/S. ANU SECURITIES. 6. THAT THE ID. COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN LAW AS WELL AS ON FACTS IN NOT TAKING ANY COGNIZANCE OF THE ASSESSMENT ORDERS PASSED IN THE CASE OF SMT. SUSHILA DEVI PROP. M/S. ANU SECURITIES , MUKESH KUMAR GUPTA AND M/S. CMS SECURITIES LTD. 7. THAT THE LD. COMMISSIONER OF INCOME TAX HAS FURTHER ERRED IN LAW AS WELL AS ON FACTS IN REQUIRING THE ASSESSEE TO PROVE SOURCE OF THE SOURCE. 8. THAT THE ID. COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN LAW AS WELL AS ON FACTS IN CONFIRMING ADDITION OF : - 3 - : RS.5000 0 / - ON THE BASIS OF THE STATEMENT OF SMT. SUSHILA DEVI PROP. M/S. ANU SECURITIES WITHOUT ANY MATERIAL ON RECORD. 2 . DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE REASONS RECORDED BY THE ASSESSING OFFICER FOR REOPENING THE ASSESSMENT. THE REASONS WERE REPRODUCED BY THE LD. CIT(A) IN HIS ORDER AT PAGE 7. THE ASSESSMENT WAS REOPENED BY THE ASSESSING OFFICER ON THE BASIS OF THE INFORMATIO N RECEIVED FROM THE DIRECTORATE OF INCOME TAX WITH REGARD TO THE LOAN RECEIVED BY THE ASSESSEE FROM SHRI. ANIL KUMAR KHANDELWAL. SOME OTHER PERSONS HAVE ALSO RECEIVED LOAN/GIFT FROM SHRI. ANIL KUMAR KHANDELWAL AND THEY HAVE SURRENDERED IT TO BE BOGUS GIFT /LOAN. ON THE BASIS OF THIS INFORMATION, THE ASSESSING OFFICER HAS FORMED A BELIEF THAT INCOME OF THE ASSESSEE FOR ASSESSMENT YEAR 2001 - 02 HAS ESCAPED ASSESSMENT TO THE TUNE OF RS.1 LAKH AND ACCORDINGLY ASSESSMENT WAS REOPENED UNDER SECTION 147 OF THE INC OME TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') . BUT WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER HAS NOT MADE ANY ADDITION OF THIS AMOUNT ON ACCOUNT OF LOAN RECEIVED FROM SHRI. ANIL KUMAR KHANDELWAL, BUT HE HAS MADE ADDITION ON DIFFE RENT GROUND I.E. ON ACCOUNT OF CL AIM O F LONG TERM CAPITAL GAIN , WHICH WAS HELD TO BE FICTITIOUS. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT AS PER PROVISIONS OF SECTION 147 OF THE ACT, THE ASSESSING OFFICER CAN MAKE ADDITION ON OTHER GROUNDS ALSO , IF ADDITION IS MADE FOR THE REASONS , ON WHICH ASSESSMENT WAS REOPENED UNDER SECTION 147 OF THE ACT. IF NO ADDITION IS MADE ON THE BASIS OF THE REASONS RECORDED FOR REOPENING THE ASSESSMENT, THE ASSESSING OFFICER CANNOT MAKE ADDITION ON OTHER GROUNDS AND IF IT IS SO, THAT ADDITION DESERVES TO BE DELETED. THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE JUDGMENT OF : - 4 - : THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. M/S JET AIRWAYS (I) LTD. I N INCOME TAX APPEAL NO.1714 OF 2009 , IN WHICH IT HAS BEEN HELD BY THE HONBLE HIGH COURT THAT IF NO ADDITION IS SUSTAINED ON A POINT FOR WHICH ASSESSMENT WAS REOPENED, THE ASSESSMENT WOULD NOT SURVIVE. 3 . THE LD. D.R., ON THE OTHER HAND, HAS SIMPLY PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). 4 . HAVI NG CAREFULLY EXAMINED THE LEGAL POSITION IN THE LIGHT OF THE SUBMISSIONS ADVANCED BY THE RESPECTIVE PARTIES, WE FIND THAT UNDISPUTEDLY THE ASSESSMENT WAS REOPENED BY THE ASSESSING OFFICER ON RECEIPT OF INFORMATION FROM THE DIRECTORATE OF INCOME TAX THAT TH E ASSESSEE HAS RECEIVED A LOAN OF RS.1 LAKH FROM SHRI. ANIL KUMAR KHANDELWAL AND SOME OTHER PERSONS HAVE ALSO RECEIVED LOAN/GIFT FROM SHRI. ANIL KUMAR KHANDELWAL AND LATER ON THEY HAVE MADE SURRENDER OF THE SAME AFTER TREATING IT TO BE BOGUS. BUT ON THIS ISSUE, NO ADDITION WAS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. THE ADDITIONS WERE MADE ON DIFFERENT COUNTS. THEREFORE, QUESTION ARISES WHETHER IN SUCH A CIRCUMSTANCE, THE REOPENING IS VALID AND THE ASSESSMENT FRAMED CONSEQUENT THERETO IS P ROPER. THIS ISSUE WAS ADJUDICATED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. M/S JET AIRWAYS (I) LTD. (SUPRA) AND THE HONBLE COURT HAS CATEGORICALLY HELD THAT IF NO ADDITION IS MADE ON THOSE ISSUE , FOR WHICH ASSESSMENT WAS REOPENED AND ADDIT IONS ARE MADE ON DIFFERENT ISSUE, THE REOPENING IS NOT VALID AND THE ASSESSMENT FRAMED CONSEQUENT THERETO DOES NOT SURVIVE. IN THE LIGH T OF TH IS LEGAL PROPOSITION, WE ARE OF THE VIEW THAT IN THE INSTANT CASE ALSO THE ASSESSMENT FRAMED CONSEQUENT TO THE RE OPENING DOES NOT SURVIVE , AS NO ADDITION WAS MADE ON THE GROUND FOR WHICH ASSESSMENT WAS REOPENED BY THE ASSESSING OFFICER UNDER SECTION : - 5 - : 147 OF THE ACT. WE ACCORDINGLY SET ASIDE THE ORDER OF THE LD. CIT(A) AND ANNUL THE ASSESSMENT FRAMED CONSEQUENT TO THE BAD REOPENING. 5 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENT I ONED ON THE CAPTION ED PAGE. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3 RD 1 . APPELLANT FEB R UARY, 2016 JJ: 1401 COPY FORWARDED TO: 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR