ITO, New Delhi V. Sh. Shyam Lal Mittal (HUF), Delhi

ITA 5217/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61604 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 09-04-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 23-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S MOHANTHY
• Assessee Lawyers: A K JAIN
• Keywords: Accommodation entries; Block assessment
• Section: 143(3); 147; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G : NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER I.T.A. NO. 5217/DEL/2011 ASSESSMENT YEAR : 2001-02 ITO VS. SHYAM LAL MITTAL (HUF) WARD 25(1) 138, DEEPALI, PITAMPURA NEW DELHI. DELHI 110 034 AAAHS6122H (APPELLANT) (RESPONDENT) CO. NO. 3/DEL/2012 ASSESSMENT YEAR 2001-02 SHYAM LAL MITTAL (HUF) VS. ITO 138, DEEPALI, PITAMPURA WARD 25(1) DELHI 110 034 NEW DELHI. AAAHS6122H (APPELLANT) (RESPONDENT) APPELLANT BY : S. MOHANTHY, DR RESPONDENT BY : A.K. JAIN, CA O R D E R PER SHAMIM YAHYA ,AM THIS APPEAL BY THE REVENUE AND CO BY THE ASSESSEE EMANA TE OUT OF THE ORDER OF LD. CIT(A) DATED 21.9.2011 AND PERTAINS TO ASSTT. YEAR 2001-02. ITA NO. 5217/DEL-11 & CO. NO. 3/DEL/2012 ASSTT. YEA RS 2001-02 2 CO. 3/DEL/12 2. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT HE SHALL NOT PRESS FOR THE CO HENCE CO IS DISMISSED AS NOT PRESSED. REVENUES APPEAL 3. THE ISSUE RAISED BY THE LD. CIT(A) IN DELETING THE ADDITION OF ` 10,39,782/- MADE U/S 68 OF THE INCOME TAX ACT, 1961. 4. IN THIS CASE DCIT INTIMATED TO THE AO HIS FINDINGS G IVEN IN BLOCK ASSESSMENT ORDER U/S 158BC IN THE CASE OF M/S. FRIENDS PORT FOLIO (P) LTD. ESTABLISHING THAT THE COMPANY AND ONE OF ITS DIR ECTORS SHRI MANOJ AGGARWAL HAD GIVEN BOGUS ACCOMMODATION BOOK EN TRIES TO VARIOUS PERSONS ON COMMISSION BASIS. IT WAS STATED THAT ONE OF SUCH BENEFICIARY OF THE ASSESSEE NAMELY M/S. SHYAM LAL MITTAL (HUF) WHO RECEIVED THE ACCOMMODATION ENTRIES OF ` 10,39,782/- DURING THE FINANCIAL YEAR 2000-01 RELEVANT TO ASTT. YEAR 2001-0 2 AS ALLEGED SALE PROCEEDS OF SHARES. AFTER RECORDING HIS REASONS HE REOPEN ED THE CASE U/S 147 AND ISSUED NOTICE U/S 148, 142 ALONGWITH A QUEST IONNAIR . KEEPING IN VIEW THE INFORMATION RECEIVED FROM DCIT, NEW DELHI. AO MADE THE ASSESSMENT TO ` 10,39,782/- WITH REFERENCE TO THE ASSESSEE U/S 68 OF THE INCOME TAX ACT. AO CONCLUDED THAT THE ONUS WAS ON THE ASSESSEE TO ESTABLISH THE GENUINENESS OF SUCH TRANSACTION. HO WEVER ITA NO. 5217/DEL-11 & CO. NO. 3/DEL/2012 ASSTT. YEA RS 2001-02 3 KEEPING IN VIEW THE OVER-WHELMING EVIDENCE UNEARTHE D AGAINST FPPL IN CONSEQUENCES OF THE SEARCH AND THE BLOCK ASSESSMENT PROCEEDINGS, ALL THE EVIDENCE FURNISHED BY THE ASSESSEE L OSSES ALL RELEVANCE. AO HELD THAT EVIDENCE FURNISHED BY THE ASSE SSEE IS FOUND TO BE UNSATISFACTORY AND ACCORDINGLY REJECTED. CONSEQU ENTLY THE AO HELD A SUM OF ` 1039782/- IS HELD TO BE UNDISCLOSED IN COME OF THE ASSESSEE U/S 68 OF THE INCOME TAX ACT. AGAINST THE ABOVE ORDER ASSESSEE APPEALED BEFORE THE LD. CITA(). BEFORE LD. CI T(A) ASSESSEES SUBMISSIONS IN THIS REGARD WAS AS UNDER :- A) THAT THE ASSESSEE HAS ALSO FILED ITS RETURN OF WEALTH T ILL A.Y. 1999/2000. B) THAT THE ASSESSEE HAD MADE INVESTMENT IN SHARES, DETAIL ARE AS UNDER :- ASSESSMENT YEAR NAME OF THE SCRIP NO. OF SHARES AMO UNT(IN RS) 1997-98 UTI MASTER PLUS 33,500 6,39,075 1997-98 UTI MASTER GAIN 13,900 1,51,982 SUBTOTAL SUBTOTAL SUBTOTAL SUBTOTAL 7,91,057 7,91,057 7,91,057 7,91,057 1999/00 UTI MASTER GAIN 7,000 70,000 TOTAL TOTAL TOTAL TOTAL 54,400 54,400 54,400 54,400 8,61,057 8,61,057 8,61,057 8,61,057 C) THAT THE AFORESAID INVESTMENT HAS BEEN DULY REFLECT ED IN THE STATEMENT OF AFFAIRS OF THE ASSESSEE FOR THE YEAR ENDED 31.03.1998 AND 31.03.1999 AND HAS BEEN ACCEPTED BY T HE INCOME TAX DEPARTMENT IN ASSESSMENT PROCEEDING FOR THE A.Y. 1998/99 AND 1999-2000 UNDER INCOME TAX ACT AS W ELL AS WEALTH TAX ACT. D) IT IS PERTINENT TO NOTE THAT ASSESSMENT OF WEALTH FOR THE A.Y. 1998/99 HAS BEEN COMPLETED U/S. 16(3) OF WEALTH TAX A CT, ITA NO. 5217/DEL-11 & CO. NO. 3/DEL/2012 ASSTT. YEA RS 2001-02 4 1957 AND AFORESAID INVESTMENT OF THE ASSESSEE AS ON 31.03.1998 HAS BEEN ADMITTED IN THE ASSESSMENT ORDER DATED 31.03.2000 FRAMED U/S 16(3) OF WEALTH TAX ACT. E) IT IS ALSO PERTINENT TO NOTE THAT ASSESSMENT OF INCOME FOR THE A.Y. 1998/99 HAS BEEN COMPLETED U/S 143(3) OF I.T. AC T, 1961 AND AFORESAID INVESTMENT OF THE ASSESSEE AS ON 31.03.1998 HAS BEEN ADMITTED IN THE ASSESSMENT ORDER DATED 10.04.2000 FRAMED U/S 143(3) OF I.T. ACT, 1961. F) VALUE OF AFORESAID INVESTMENT IN SHARES AS ON 31.03.1 999 HAS BEEN DECLARED BY THE ASSESSEE IN ITS RETURN OF INCOME AND RETURN OF WEALTH FOR THE A.Y. 1999-2000 AND HAS BEEN SO ACCEPTED BY THE INCOME TAX DEPARTMENT. G) THE ASSESSEE HAS SOLD THE AFORESAID INVESTMENT THROUGH M /S. FRIENDS PORTFOLIO PRIVATE LIMITED ON 31.03.2000 I.E. IN A.Y. 2000-01 FOR ` 10,39,782.90/- FOR WHICH M/S. FRIENDS P ORTFOLIO PRIVATE LIMITED HAS ISSUED CONTRACT NOTE AND SALE BILL S DATED 30.03.2000. H) CAPITAL GAIN/LOSS ARISED AFTER INDEXATION ON SALE OF AFORESAID INVESTMENT HAS BEEN DECLARED IN THE RETURN OF INCOME FOR THE A.Y. 2000-01 AND HAS BEEN ACCEPTED BY THE INCOME TAX DEPARTMENT. I) HOWEVER PAYMENT FOR AFORESAID INVESTMENT SOLD THROU GH M/S. FRIENDS PORTFOLIO PRIVATE LIMITED ON 31.03.2000 REMA INED UNPAID AS ON 31.03.2000 THEREFORE THE SAME HAS BEEN SHOWN AS RECEIVABLE FROM M/S. FRIENDS PORTFOLIO PRIVATE LIMITED IN STATEMENT OF AFFAIRS OF THE ASSESSEE AS ON 31.03.2000. COPY OF THE SAME WAS ALSO ENCLOSED WITH THE RETURN OF INCOME OF THE ASSESSEE FOR THE A.Y. 2000-01 F ILED ON 31.08.2000 VIDE R.NO. 3281 AND DEPARTMENT HAS ACCEPT ED THE SAID STATEMENT OF AFFAIRS AS WELL AS THE CAPITAL GA IN/LOSS DECLARED BY THE ASSESSEE IN THE A.Y. 2000-01 J) THAT M/S. FRIENDS PORTFOLIO PRIVATE LIMITED HAS MAD E PAYMENT FOR THE SALE PROCEEDING OF SALE OF AFORESAID INVESTMENT VIDE CHEQUES NO. 038234 AND 038235 BOTH DA TED 11.05.2000 DRAWN ON VIJAYA BANK FOR ` 7,68,741.25/- AND ` 2,71,041,65/- RESPECTIVELY AND WAS CREDITED INTO THE BANK ACCOUNT OF THE ASSESSEE MAINTAINED WITH ANDHRA BANK. ITA NO. 5217/DEL-11 & CO. NO. 3/DEL/2012 ASSTT. YEA RS 2001-02 5 5. CONSIDERING THE AFORESAID SUBMISSIONS LD. CIT(A) OBSERV ED THAT THE INVESTMENT MADE BY THE ASSESSEE IN UTI MASTER PLUS AND UTI MASTER GAIN IN ASSTT. YEAR 1997-98 AND 1999-2000 FOR A N AMOUNT OF ` 8,61,057/- WHICH HAS BEEN DULY REFLECTED IN THE RETU RN OF INCOME FOR YEARS ENDING 31.3.1998 AND 31.3.1999 WHICH HAS BEEN D ULY ACCEPTED BY THE DEPARTMENT. THUS LD. CIT(A) OPINED THAT THE E XISTENCE OF THE ASSETS IS NOT IN DOUBT AS THEY HAVE BEEN AMPLY DOCUMENTE D AND ACCEPTED BY THE DEPARTMENT IN REGULAR ASSESSMENT OF INC OME AND WEALTH. FURTHER LD. CIT(A) OPINED THAT ASSESSEE HAS SUBMI TTED EVIDENCES OF HAVING SOLD THESE UNITS THROUGH M/S. FRIEND S PORTFOLIO PVT. LTD. ON 31.03.2000 FOR A SUM OF ` 10,39,782.90 AND THE RESULTING CAPITAL GAIN HAS ALSO BEEN DECLARED BY THE ASSESSEE IN HI S RETURN OF INCOME FOR ASSTT. YEAR 2000-01 WHICH HAS ALSO BEEN ACCE PTED BY THE DEPARTMENT. LD. CIT(A) FURTHER OBSERVED THAT IT IS O NLY THAT THE AMOUNT OF ` 10,39,782.90 HAS BEEN RECEIVED BY THE ASSE SSEE VIDE CHEQUE NUMBERS 038234 AND 038235 DATED 11.5.2000 DRA WN ON VIJAYA BANK FOR ` 7,68,741.25 AND ` 2,71,041.65 RESP ECTIVELY WHICH WAS DULY PAID IN THE BANK ACCOUNT OF THE ASSESSEE MAINTA INED IN ANDHRA BANK. LD. CIT(A) CONCLUDED THAT SINCE THE INV ESTMENT MADE HAS BEEN DECLARED AND ACCEPTED BY THE DEPARTMENT IN EARLIER YEARS AND THE SALE OF SUCH INVESTMENT HAS ALSO BEEN TAXED BY T HE DEPARTMENT IN ASSTT. YEAR 2000-01, IT WAS NOT POSSIBLE F OR THE DEPARTMENT TO TAX THE WHOLE RECEIPT OF ` 10,39,782. 90 IN ASSTT. YEAR ITA NO. 5217/DEL-11 & CO. NO. 3/DEL/2012 ASSTT. YEA RS 2001-02 6 2001-02 JUST BECAUSE IT HAS BEEN ACTUALLY RECEIVED IN THE ASSESSMENT YEAR WHATEVER BE THE STATUS OF M/S. FRIENDS PORTFOLIO P RIVAT LIMITED OR ITS DIRECTOR SHRI MANOJ AGGARWAL. LD. CIT(A) CONCLUD ED THAT THIS ADDITION DOES NOT STAND THE TEST OF JUDICIAL SCRUTINY A ND IS THEREFORE DELETED. AGAINST THE ABOVE ORDER LD. CIT(A) IS IN APP EAL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN THE LIGHT OF MATERIAL PRODUCED AND PRECEDENTS RELIED. WE FIND THAT AS PER A DMITTED FACTS OF THE CASE THE INVESTMENT IN THE SHARES HAS ALREADY BEEN M ADE AND DECLARED BY THE ASSESSEE IN EARLIER YEARS AND THE SAME WA S ACCEPTED BY THE DEPARTMENT. IN THIS REGARD ASSESSEE HAS FILED AMP LE EVIDENCES IN THE FORM OF INCOME TAX RETURNS IN EARLIER YEARS. F URTHER MORE THE SALE OF SUCH INVESTMENT AND THE RESULTING CAPITAL GAINS HAS ALSO BEEN TAXED IN ASSTT. YEAR 2000-01. THIS CLEARLY IMPLIES THAT THE SALE OF SHARES AND CAPITAL GAIN HAS BEEN ACCEPTED BY THE DEPAR TMENT. DURING THE CURRENT ASSTT. YEAR ONLY THE AMOUNT OF ` 10,39,7 82.90 WHICH WAS SHOWN AS RECEIVABLE FOR ASSTT. YEAR 2000-01 WAS RECEIVE D DURING THE PRESENT ASSTT. YEAR. IN THESE CIRCUMSTANCES WE FIND OURSE LVES IS IN AGREEMENT WITH THE LD. CIT(A) THAT WHEN THE PURCHASE AND SALE OF SHARES HAS BEEN ACCEPTED BY THE DEPARTMENTS IN EAR LIER YEARS. THE ITA NO. 5217/DEL-11 & CO. NO. 3/DEL/2012 ASSTT. YEA RS 2001-02 7 RECEIVABLE RECEIVED DURING THE YEAR CAN NOT BE TAXE D. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A ) AND WE UPHOLD THE SAME. 7. IN THE RESULT, APPEAL PASSED BY THE REVENUE STANDS DI SMISSED AND THE CO OF THE ASSESSEE IS DISMISSED AS WITHDRAWN. ORDER PRONOUNCED IN OPEN COURT ON 12 TH APRIL, 2012. SD/- SD/- (C.M. GARG) JUDICIAL MEMBER (SHAMIM YAHYA) ACCOUNTANT MEMBER DATED : 12.4.2012 VEENA COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER DEPUTY REGISTRAR, ITAT