ITO, BIKANER V. Shri Sunil Daftri, BIKANER

ITA 572/JODH/2013

• Counselvise Citation: 57223314 RSA 2013
• Duration Of Justice: 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 13-06-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 16-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: U C JAIN
• Keywords: Unexplained investment; Cost of acquisition
• Section: 133(6)

Judgement Text

IN TH E INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI , ACCOUNTANT MEMBER. ITA NO . 572 /J U /20 13 (A.Y. 200 9 - 1 0) THE INCOME - TAX OFFICER , VS. SHRI SUNIL DAFTRI WARD 1(4), S/O SHRI SUMER MAL DAFTRI BIKANER BEHIND KHADI BAZAAR HEAD RANI BAZAR, BIKANER PAN NO. A B MPD 6757 D (APPELLANT) (RESPONDENT) ASSESSEE BY : S HRI U.C. JAIN DEPARTMENT BY : SHRI N.A. JOSHI - D.R. DATE OF HEARING : 1 3 / 0 6 /201 4 . DATE OF PRONOUNCEMENT : 15 /0 7 /201 4 . O R D E R PER HARI OM MARATHA , J .M TH IS IS AN APPEAL BY THE DEPARTMENT DIRECTED AGAINST THE ORDER DATED 2 8 / 1 0/20 13 OF L D . CIT(A) , BIKANER . 2. THE FOLL O WING SOLE GROUND HA S BEEN RAISED IN THIS APPEAL : 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING ADDITION OF RS. 21, 87,500/ - MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT . 3 . BRIEFLY STATED, THE FACTS OF THE SOLE ISSUE RAISED IN THIS APP EAL ARE THAT THE A.O. HAS TREATED THE SALES OF UNQUOTED SHARES AS UNEXPLAINED INVESTMENT OF THE ASSESSEE. THE ASSESSEE DECLARED SALES CONSIDERATION FROM UNQUOTED SHARES OF RS. 42,57,500/ - WHEREAS THE A.O. HAS CONSIDERED IT ONLY AT RS. 20,70,000/ - . THE AS SESSEE HAS SHOWN SALE CONSIDERATION OF SHARES OF M/S RAJ LAND MARK LTD. AT RS. 42,57,500/ - AGAINST THE COST OF ACQUISITION BEING AT RS. 40,70,000/ - SALE HAS BEEN STATED TO BE MADE TO SHRI NARENDRA MODI, WHO, WHEN CALLED U/S 133(6) OF THE INCOME - TAX ACT, 19 61 ['THE ACT', FOR SHORT] STATED THAT HE HAD PURCHASED SHARES ONLY FOR RS. 20,70,000/ - . THE ASSESSEE SOLD 37000 SHARES OF M/S RAJ LAND MARK LTD. TO SHRI NARENDRA MODI AND FAMILY AS AGAINST WHICH THE A.O. HAS TREATED THE SALE ONLY TO SHRI NARENDRA MODI I NDEPENDENTLY. PERUSAL OF THE ANNUAL REPORT REVEALED THAT THE SHARES WERE SOLD PARTLY TO SHRI NARENDRA MODI AND REST TO OTHERS WHO ARE RELATED TO SHRI NARENDRA MODI. THE BREAK - UP OF THE SALES BEING 145000 SHARES WERE SOLD TO SHRI UMESH AGARWAL, 1,80,000 SHARES TO SHRI NARENDRA MODI AND RS. 45000 TO SEEMA MODI. THE SALE CONSIDERATION OF THESE SHARES IS REFLECTED IN THE BANK 3 ACCOUNT OF THE ASSESSEE. THE CASE OF THE ASSESSEE IS THAT ALL TRANSACTIONS ARE ROUTED THROUGH ACCOUNT PAYEE CHEQUES AND ARE VERIFIAB LE FROM BACK STATEMENTS COUPLED WITH ANNUAL REPORT OF THE COMPANY. THE A.O. WAS NOT AGREEABLE AND MADE THE IMPUGNED ADDITION. 4. BEFORE THE LD. CIT(A) , THE ASSESSEE REITERATED ALL THE REASONS STATED BEFORE THE A.O. AND ALSO ASSERTED THAT THE A.O. HAS NOT PASSED A SPEAKING ORDER AND HAS SIMPLY MADE ADDITION OF RS. 21,87,500/ - AS UNEXPLAINED INVESTMENT. BEING SATISFIED ABOUT THE SOURCE OF DEPOSIT IN THE BANK OF THE ASSESSEE ALONGWITH SOURCE THEREOF, THE LD. CIT(A) HAS DELETED THE ADDITION IN QUESTION. NOW THE REVENUE IS AGGRIEVED. 5. BOTH THE PARTIES HAV E REITERATED THE SAME ARGUMENTS. BEFORE US, BOTH THE PARTIES HAVE REITERATED THEIR ORIGINAL STAND. THIS IS A PIQUANT CASE. THE ASSESSEE HAS BEEN CLAIMING SALE CONSIDERATION OF SHARES AT RS. 42,57,500/ - AS AGAINST COST OF ACQUISITION OF RS. 40,70,000/ - . THE A.O. HAS RELIED ON EX PARTE EVIDENCE COLLECTED AND GATHERED BY RESORTING TO PROVISIONS OF SECTI ON 133(6) OF THE ACT AND WHICH EVIDENCE WAS NEVER CONFRONTED TOTE. THE A.O. HAS ALSO MADE A MISTAKE IN MENTIONING IN HIS ORDER THAT ALL THE SHARES WERE SOLD TO ONE PERSON ONLY WHEREAS THE ABOVE STATED BREAK - UP HAS NOT BEEN DISPUTED AND RATHER ACCEPTED BY THE 4 REVENUE. WHEN THE ASSESSEE HAS BEEN CLAIMING HIGHER SALE CONSIDERATION, THE A.O. IS BENT UPON TAKING LESSER FIGURE OF CONSIDERATION WITH A VIEW TO TREAT THE DIFFERENTIAL CREDIT AMOUNT IN THE BANK AS UNEXPLAINED AND BRINGING IT TO TAX. IT WAS SUBMITTE D BY THE LD. A.R. THAT THE ASSESSEE PURCHASED 370000 SHARES WHOSE BREAK UP IS AS UNDER: A. ANJU JOSHI 75000/ - B. RAM AVTAR JOSHI 100000/ - C. JOSHI TRAVEL (P) LTD. 30000/ - D. VINAY JOSHI 1,65,000/ - THIS FACT HAS NOT BEEN CONTROVERTED BY THE REVENUE. IT IS ALSO A FACT THAT THE ENTIRE PURCHASE CONSIDERATION WAS PAID BY THE ASSESSEE THROUGH ACCOUNT PAYEE CHEQUES AND THE REVENUE HAS NOT DISPUTED THIS FACT EITHER. THESE TRANSACTIONS ARE RECORDED IN THE BOOKS AND ALSO DECLARED BY THE COMPANY IN ITS ANNUAL REPORT FILED WITH THE REGISTRAR OF COMPANIES [ROC]. SALE OF ALL THESE SHARES IS ALSO NOT IN DISPUTE. AS PER THE ASSESSEE, ENTIRE LOT OF 3,70,000 SHARES WAS SOLD ON 7.5.2008 TO SHRI NARENDRA MODI AND HI S ASSOCIATE ETC. FOR A TOTAL CONSIDERATION OF RS. 42,57,500/ - , THE DETAIL OF WHICH WE HAVE ALREADY DISCUSSED. THE INFORMATION REGARDING SALE OF SHARES IS ALSO RECORDED IN THE BOOKS OF THE COMPANY AND ALSO REFLECTED IN THE ANNUAL REPORT SUBMITTED TO THE RO C. SALE CONSIDERATION OF RS. 5 42,57,500/ - WAS ALSO RECEIVED BY THE ASSESSEE BY WAY OF ACCOUNT PAYEE CHEQUES WHICH WERE CREDITED IN THE BANK ACCOUNT MAINTAINED IN THE AXIS BANK. THE ASSESSEE PRODUCED COPY OF BANK ACCOUNT WITH NARRATION ABOUT NATURE OF CRED IT. IN OUR CONSIDERED OPINION, ACTION TAKEN BY THE A.O. IS NOT JUSTIFIED. SHRI NARENDRA MODI HAS GIVEN SALE CONSIDERATION REGARDING 1,80,000 SHARES AND NOT REMAINING SHARES. THEREFORE, WE DO NOT FIND ANY FALLACY IN THE FINDING OF THE LD. CIT(A) AND ACCO RDINGLY, WE DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 6. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSED. ( ORDER PRONO UNCED IN THE COURT ON 15 TH JULY , 201 4 ) . SD/ - SD/ - (N.K.SAINI) ( HARI OM MARATHA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 15 TH JULY , 201 4 . VL / - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR .