Appeal Details
Counselvise Citation
[2019] 117 COUNSELVISE.COM (IT) 0683 (ITAT-AGRA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
6 year(s) 2 month(s) 16 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
16-05-2019
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
DB
Next Hearing Date
18-07-2013
Assessment Year
misc
Appeal Filed On
01-03-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.64/AGRA/2013 ASSESSMENT YEAR: 2002-03 SMT. SHAKTI DARGUN, VS. INCOME TAX OFFICER, 22, NEW RAJA MANDI COLONY, WARD 2(4), AGRA. AGRA. (PAN: ADHPD 1964 G). ITA NO.549/AGRA/2012 ASSESSMENT YEAR: 1999-2000 SMT. RENU AGARWAL, VS. INCOME TAX OFFICER 1(3), 22/44, NORTH VIJAY NAGAR COLONY, AGRA. AGRA. (PAN: ABDPA 2158 B). (APPELLANTS) (RESPONDENTS) APPELLANTS BY : SHRI RAKESH GUPTA, C.A. & SHRI SHASHANK AGARWAL, ADVOCATE RESPONDENTS BY : SHRI S.D. SHARMA, JR. D.R. DATE OF HEARING : 18.07.2013 DATE OF PRONOUNCEMENT : 26.07.2013 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THESE ARE APPEALS FILED BY TWO DIFFERENT ASSESSEES AGAINST TWO DIFFERENT ORDERS DATED 24.09.2012 AND 11.06.2012 PASSED BY TH E LD. CIT(A)-I, AGRA FOR THE ASSESSMENT YEARS 2002-03 & 1999-2000 RESPECTIVELY. ITA NOS.64/AGRA/2013 & 549/AGRA/2012 A.YS. 2002 03 & 1999-2000 2 2. THE ASSESSEES HAVE RAISED THE FOLLOWING GROUNDS OF APPEAL :- ITA NO.64/AGRA/2013 A.Y. 2002-03 - BY ASSESSEE SM T. SHAKTI DARGUN 1. BECAUSE THE A.O. ERRED BY INITIATING PROCEEDING S U/S 147 FOLLOWED BY ISSUE OF NOTICE U/S 148; THIS ACTION WR ONGLY CONFIRMED BY CIT(A). 2. BECAUSE THE ASSESSMENT ORDER PASSED U/S 147/143( 3) IS ILLEGAL AND LIABLE TO BE QUASHED. 3. BECAUSE THE A.O. HAS ERRED IN IGNORING THE ORIGI NAL AND REVISED RETURNS BY OVERLOOKING THE WRITTEN REPLY DT . 1.10.2007 IN COMPLIANCE OF NOTICE U/S 142(1). THE CIT(A) HAS WR ONGLY CONFIRMED THE VIEW OF A.O. 4. BECAUSE THE LONG-TERM CAPITAL GAIN WRONGLY TREAT ED BOGUS INCOME BY A.O. WHO FAILED TO DISCHARGE HIS ONUS OF PROOF. THE CIT(A) ERRED IN SUPPORTING BASELESS ASSTT. ORDERS. 5. BECAUSE A.O. ERRED TO DISBELIEVE THE PURCHASES A ND SALES OF SHARES SUPPORTED WITH CONCLUSIVE EVIDENCE AND CIT(A ) FAILED TO PUT ANY REASON TO SUPPORT FINDING OF A.O. MENTIONED IN ASSTT. ORDER. 6. BECAUSE THE SHARE BROKERS IS THE WITNESS OF THE DEPARTMENT AND A.O. DID NOT PRODUCE HIM FOR CROSS EXAMINATION BY A PPELLANT. THE CIT(A) HAS ILLEGALLY HELD THAT SHARE BROKER IS WITN ESS OF APPELLANT. 7. BECAUSE THE ADDITION OF RS.70000/-, RS.2024/- & RS.51,841/- ARE ADDITIONS FOR SAKE OF ADDITION. EVEN THE ACCOU NTED MONEY INVESTED IN PURCHASE OF SHARES, HAS BEEN TREATED UN EXPLAINED. 8. BECAUSE THE CASE LAWS RELIED UPON AND MENTIONED IN APPELLATE ARE NOT APPLICABLE TO FACTS OF THIS CASE. 9. BECAUSE THE APPELLANT CRAVES LEAVE TO AMEND/ALTE R OR ADD ANY GROUND IN THIS APPEAL MEMO AT TIME OF HEARING OF BE FORE HEARING. 10. BECAUSE THE ORDER OF THE ASSESSING AUTHORITY IS BAD & ILLEGAL BOTH ON FACTS AND UNDER LAW. ITA NOS.64/AGRA/2013 & 549/AGRA/2012 A.YS. 2002 03 & 1999-2000 3 ITA NO.549/AGRA/2012 AY 1999-2000- BY ASSESSEE SM T. RENU AGARWAL 1. BECAUSE THE ASSESSING AUTHORITY ERRED IN INITIA TING ACTION U/S 147 AND IT IS UNAUTHORIZED, ILLEGAL AND WITHOUT ANY BASIS AS NO INCOME HAS BEEN ESCAPED ASSESSMENT IN THE PRESENT CASE. T HE CIT(A) HAS WRONGLY AND ILLEGALLY SUPPORTED SUCH ACTION. 2. BECAUSE THE ASSESSING AUTHORITY HAS ERRED IN LAW AS WELL AS ON FACTS TO TREAT THE LONG TERM CAPITAL GAIN AS BOGUS INCOME. THE ASSESSING OFFICER HAS FAILED TO DISCHARGE HIS BURDE N FOR TREATING IT BOGUS INCOME. THE CIT(APPEALS) HAS ALSO WRONGLY HE LD OTHERWISE. 3. BECAUSE THE OFFICERS BELOW HAVE ACCEPTED THE PUR CHASE OF SHARES AS GENUINE BUT HAS ADDED THE SALE PROCEEDS A S BOGUS CAPITAL GAIN IGNORING THE FACT THAT 18700 SHARES STANDS OFF LOADED ACCORDINGLY TO THE COMPANY WHO ISSUED SHARES TO APPELLANT. 4. BECAUSE THE ASSESSING OFFICER HAS ERRED IN NOT A LLOWING CREDIT OF ALREADY ACCOUNTED FOR INVESTMENT IN SHARE PURCHASE. THE CIT(A) HAS WRONGLY IGNORED THIS FACT. 5. BECAUSE ASSESSING OFFICER HAS ERRED IN MAKING AD DITION OF RS.1227307/- AS AGAINST INFORMATION OF 449100/- COV ERED BY REASONS RECORDED. THE WRITTEN SUBMISSION MADE BEFORE A.O. & CIT(A) HAVE BEEN OVERLOOKED AND NOT GIVEN DUE CONSIDERATION. 6. BECAUSE THE ASSESSING OFFICER DID NOT ALLOW CROS S EXAMINATION WITH BROKER AND CIT(A) HAS IGNORED THIS LEGAL ASPEC T OF THE CASE AND THE FINDING OF HONBLE SUPREME COURT. 7. BECAUSE THE ORDER OF THE LD. ASSESSING OFFICE & CIT(A) ARE BAD AND ILLEGAL BOTH ON FACTS AND UNDER LAW. 8. BECAUSE APPELLANT CRAVES LEAVE TO AMEND, ALTER, CHANGE AND MAKE NEW GROUND OF THIS APPEAL MEMO BEFORE OR AT TH E TIME OF HEARING OF THIS APPEAL. 3. FIRST WE TAKE UP ITA NO.64/AGRA/2013 FOR A.Y. 2002-03 . GROUNDS NOS.1 TO 3 HAVE NOT BEEN PRESSED BY THE LD. AUTHORISED REPRE SENTATIVE, THEREFORE, THE SAME ARE DISMISSED AS NOT PRESSED. ITA NOS.64/AGRA/2013 & 549/AGRA/2012 A.YS. 2002 03 & 1999-2000 4 4. GROUNDS NO.4, 5 & 6 ARE PERTAINING TO ADDITION O F RS.10,36,824/-. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE PURCHASED 7 000 SHARES OF A COMPANY M/S. GOYAL ACHAL SAMPATI VIKAS & NIYOJAN NIGAM LIMITED O N 05.02.2000 @ RS.10/- PER SHARE, TOTAL RS.70,000/- THROUGH DEMAND DRAFT. OUT OF 7000 SHARES, 5200 SHARES WERE SOLD DURING THE FINANCIAL YEAR 2001-02 RELEVANT TO A.Y. 2002-03 I.E. THE YEAR UNDER CONSIDERATION FOR RS.10,38,908/-. T HE SALE CONSIDERATION WAS RECEIVED BY ACCOUNT PAYEE CHEQUE. THE ASSESSEE SOL D SHARES THROUGH BROKER, M/S. AGARWAL & CO., DELHI. THE ASSESSEE CLAIMED CAPITAL GAIN. THE ASSESSEE SUBMITTED BEFORE THE A.O. THAT THE SHARES WERE PURCHASED THRO UGH BANKING CHANNEL AND SALE CONSIDERATION WAS ALSO RECEIVED THROUGH BANKING CHA NNEL. THE ASSESSEE HAS FURNISHED THE RELEVANT DETAILS, ALLOTMENT LETTERS, COPY OF BILL, COPY OF QUOTATION OF STOCK EXCHANGE ETC. THE A.O., AFTER CONSIDERING TH E ASSESSEES REPLY, NOTED THAT THE ASSESSEE HAS RECEIVED DRAFT WORTH RS.10,36,824/ - THROUGH M/S. AGARWAL & CO., DELHI IN THREE INSTALLMENTS AS UNDER:- 24.09.2001 498477/- 16.10.2001 259201/- 08.11.2001 279146/- 1036824/- 5. THE A.O. MADE ADDITION OF RS.10,36,830/- ON THE GROUND THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE THAT THESE DRAFTS WERE R ECEIVED AGAINST THE SALE OF SHARES OF M/S GOYAL ACHAL SAMPATI VIKAS & NIYOJAN NIGAM LI MITED AND HE FURTHER NOTED ITA NOS.64/AGRA/2013 & 549/AGRA/2012 A.YS. 2002 03 & 1999-2000 5 THAT ALL THE LETTERS SENT TO THE COMPANY AND THE SH ARE BROKER RECEIVED BACK UN- SERVED. THE ASSESSEE HAS ALSO FAILED TO PRODUCE TH E CONCERNED PERSONS. IT HAS ALSO BEEN NOTED BY THE A.O. THAT THE ASSESSEE HAS FAILED TO FURNISH THE ORIGINAL SHARE CERTIFICATES OF REMAINING 1800 SHARES. 6. THE CIT(A) CONFIRMED THE ORDER OF A.O. HOLDING T HAT THE A.O. IS CORRECT IN TAKING SUCH SHARE TRANSACTION AS BOGUS SHARE TRANSA CTION. THE AMOUNT OF RS.10,36,824/- WAS SHOWN AS SALE CONSIDERATION ON S ALE OF THESE SHARES WHICH REMAINED UNEXPLAINED AND IS LIABLE TO BE ADDED TO T HE INCOME OF THE ASSESSEE AS UNDISCLOSED INCOME FROM UNDISCLOSED SOURCES. 7. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE SOLD 5200 SHARES OF M/S. GOYAL ACHAL SAMPATI VIKAS & NIYOJAN NIGAM LIMITED OUT OF 7000 SHARES ALLOTTED TO THE ASSESSEE IN EARLIER YEARS. ALLOTMENT OF THESE 7000 SHARES HAS BEEN CONFIRMED BY THE COMPANY AFTER THE A.O. MADE E NQUIRY FROM THE COMPANY IN THIS REGARD AND THESE SHARES HAVE ALSO BEEN FOUND R ECORDED IN THE SHARE HOLDER LIST OF THE COMPANY SUBMITTED DURING THE APPELLATE PROCE EDING BEFORE THE CIT(A). THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THIS F ACT HAS CLEARLY BEEN RECORDED BY THE CIT(A) IN HIS ORDER IN PARAGRAPH NO.6.6 AT PAGE NO.7 OF THE ORDER OF CIT(A). ITA NOS.64/AGRA/2013 & 549/AGRA/2012 A.YS. 2002 03 & 1999-2000 6 THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT TH E RELEVANT DOCUMENT ALLOTMENT OF SHARES CONFIRMED BY THE COMPANY HAS BEEN FURNISH ED OF WHICH COPY HAS BEEN PLACED AT PAGE NO.2 OF THE PAPER BOOK. HE FURTHER SUBMITTED THAT THE SHARES WERE SOLD THROUGH M/S. AGARWAL & CO. AND RELATED VOUCHER S WERE FURNISHED BEFORE THE A.O., COPY OF WHICH HAS BEEN PLACED AT PAGE NO.3 OF THE PAPER BOOK. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT PURCHASE B ILL AND CONFIRMATION OF THE AMOUNT FROM M/S. AGARWAL & CO. HAS ALSO BEEN PLACED ON RECORD, COPY OF WHICH HAS BEEN PLACED AT PAGE NOS.4 TO 6 OF THE ASSESSEE S PAPER BOOK. AS REGARDS THE RATE, THE ASSESSEE FURNISHED THE RELEVANT QUOTATION LIST AND COPY HAS BEEN PLACED AT PAGE NO.7 OF THE PAPER BOOK. 8. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT IN PARAGRAPH NOS.6 & 7 THE CIT(A) RECORDED THE FACT THAT THESE SHARES WERE SO LD THROUGH M/S. AGARWAL & CO. AND HAVE BEEN FOUND TO BE MEMBER OF DELHI SOCK EXCH ANGE. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE CIT(A) RECORDED T HAT THE SHARE BROKER HAS NOT REPORTED TRANSACTIONS AS PER SEBI GUIDELINES. HE S UBMITTED THAT FOR THAT THERE IS NO MISTAKE ON THE PART OF THE ASSESSEE. THE LD. AUTHO RISED REPRESENTATIVE SUBMITTED THAT ENQUIRY HAS ALSO BEEN MADE FROM M/S. AGARWAL & CO. WHO VIDE HIS LETTER DATED 17.06.2011 REPLIED THAT THE BROKER HAS NO SUC H RECORD AVAILABLE WITH HIM SINCE THE TRANSACTION IS ALMOST TEN YEARS OLD AND H E WAS NOT DOING ANY BUSINESS IN ITA NOS.64/AGRA/2013 & 549/AGRA/2012 A.YS. 2002 03 & 1999-2000 7 THE LAST 8 TO 9 YEARS. THE LD. AUTHORISED REPRESEN TATIVE SUBMITTED THAT THE CIT(A) AT PAGE NO.19 IN PARAGRAPH NO.6.7 NOTED THAT THE BR OKER HAS NEITHER CONFIRMED NOR DENIED ABOUT THE TRANSACTION SHOWN TO HAVE BEEN DON E THROUGH HIM BY THE ASSESSEE. THE CIT(A) NOTED THAT THE LICENCE OF M/S. AGARWAL & CO. HAS BEEN SUSPENDED BY SEBI W.E.F. 07.12.2009 DUE TO NON-PAYING OF ITS SEB I FEES. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE SUSPENSION OF THE LICENCE OF THE BROKER IS NOT RELEVANT TO THE ISSUE AS THE LICENCE WAS SUSPENDED W.E.F. 07.12.2009 WHEREAS THE TRANSACTION RELATED TO F.Y. 2001-02. THE LD. AUTHO RISED REPRESENTATIVE FURTHER SUBMITTED WITH REFERENCE TO PARAGRAPH NO.6.15 OF CI T(A)S ORDER AT PAGE NO.28 THAT THE CIT(A) RECORDED THE FACT THAT NO STATEMENT HAS BEEN GIVEN BY THE BROKER M/S. AGARWAL & CO. AGAINST THE ASSESSEE WHICH HAS BEEN USED BY THE A.O. FOR HOLDING THE SHARE TRANSACTION SHOWN BY THE ASSESSEE AS BOGU S TRANSACTION. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE CIT(A) HAS HIMSELF RECORDED THE FACT THAT M/S. AGARWAL & CO. DID NOT DENY THE TRANSACTIO N. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT ON IDENTICAL SET OF F ACTS, ADDITION HAS BEEN DELETED BY THE I.T.A.T., AGRA BENCH IN VARIOUS CASES INCLUDING THE FOLLOWING:- 1) ACIT VS. SHRI ASHOK KUMAR LAVANIA, ITA NO.112/AG R/2004. 2) ITO VS. SHRI KANTI PRASD AGGARWAL (HUF), ITA NO. 324/AGR/2006. 3) ACIT VS. SHRI BAIJNATH AGARWAL, ITA NO.133/AGR/2 005 4) DCIT VS. SHRI MUKESH KUMAR AGARWAL, ITA NO.151/A GR/2010 ITA NOS.64/AGRA/2013 & 549/AGRA/2012 A.YS. 2002 03 & 1999-2000 8 5) ACIT VS. SHRI RAM PRAKASH GARG, ITA NO.237/AGRA/ 2011, ORDER DATED 18.01.2013. 9. THE LD. DEPARTMENTAL REPRESENTATIVE REFERRED PAG E NO.3 OF ASSESSMENT ORDER AND SUBMITTED THAT THE ASSESSEE HAS FAILED TO FURNI SH THE RELEVANT DETAILS. THE ASSESSEE HAS FAILED TO FURNISH THE REMAINING CERTIF ICATES BEFORE THE A.O. AS WELL AS BEFORE THE CIT(A). 10. LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE CIT(A), AFTER DETAILED DISCUSSION, HAS CONFIRMED THE ORDER OF A.O. HE, TH EREFORE, SUBMITTED THAT THE ORDER OF CIT(A) MAY BE CONFIRMED. 11. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. THE ADMITTED FACTS OF THE CASE ARE THAT 7000 SHARES WERE PURCHASED/ALLOTTED IN THE EARLIER YEAR DATED 05.02.2000. THE ASSESSEE FURNIS HED ALLOTMENT LETTERS BEFORE THE A.O. THE ASSESSEE HAS ALSO FURNISHED COPIES OF BIL LS AND COPY OF QUOTATION OF STOCK EXCHANGE. THE TRANSACTION HAS BEEN DONE THRO UGH BANKING CHANNEL. THE SALE CONSIDERATION HAS BEEN RECEIVED THROUGH BROKER , M/S. AGARWAL & CO. AND M/S. AGARWAL & CO. CONFIRMED THE AMOUNT PAID TO THE ASSE SSEE. THE COMPANY HAS CONFIRMED THAT SHARES WERE ALLOTTED TO THE ASSESSEE . CONSIDERING THESE FACTS, WE ITA NOS.64/AGRA/2013 & 549/AGRA/2012 A.YS. 2002 03 & 1999-2000 9 FIND THAT ON IDENTICAL SET OF FACTS, THE ISSUE IS C OVERED IN FAVOUR OF THE ASSESSEE BY VARIOUS DECISIONS OF I.T.A.T., AGRA BENCH INCLUDING THE DECISION IN THE CASE OF ACIT VS. SHRI RAM PRAKASH GARG IN ITA NO.237/AGRA/2 011 VIDE ORDER DATED 18.01.2013. THE RELEVANT FINDING OF THE I.T.A.T. I S REPRODUCED AS UNDER :- 4. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSE SSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND R EFERRED TO PB-100 AND 101, WHICH IS THE REPLY FILED BEFORE THE AO ALO NG WITH THE EVIDENCE IN WHICH IT WAS EXPLAINED THAT THE SHARES OF M/S. B.T. TECHNET LTD. WERE DIRECTLY ALLOTTED TO THE ASSESSEE IN THE OFFERING T O THE PUBLIC ON 07.09.1999 AND SHARES WERE DIRECTLY ALLOTTED TO THE ASSESSEE A T RS.10/- EACH. COPIES OF THE SHARE CERTIFICATES, LETTER OF THE COMPANY AND P AYMENT PROOF WERE FILED FROM PAGES 10 TO 27. THE SHARES WERE ACQUIRED IN TH E EARLIER YEARS WHICH HAVE BEEN SHOWN IN THE BOOKS OF ACCOUNT AND HAVE NO T BEEN DOUBTED. THE SAME SHARES WERE SOLD IN THE ASSESSMENT YEAR UNDER APPEAL TO THE BROKER M/S. CMS SECURITIES LTD. DELHI @ 114/- EACH SHARE F OR A TOTAL CONSIDERATION OF RS.15,87,050/-. COPIES OF TRANSFER DEED, CONTRACT NOTES AND PAYMENTS WERE RECEIVED THROUGH DRAFTS ARE FILED IN THE PAPER BOOK AT PAGES 40 TO 50. PB-93 IS THE INFORMATION RECEIVED F ROM M.P. STOCK EXCHANGE REGARDING SALE VALUE OF SHARES OF B.T. TEC HNET LTD. AT RS.114/- EACH SHARE. HE HAS SUBMITTED THAT THE SOURCE OF PUR CHASE OF SHARES AND SOURCE OF SALE CONSIDERATION HAVE NOT BEEN DISPUTED BY THE AUTHORITIES BELOW AND IN THE CASES OF RAJESH GARG, RAM PRAKASH GARG, HUF AND SEEMA GARG, THE TRIBUNAL DELETED SIMILAR ADDITION I N RESPECT OF SHARES SOLD THROUGH THE SAME BROKER. COPY OF THE ORDER OF THE TRIBUNAL DATED 31.03.2009 IS FILED IN THE PAPER BOOK AND THE SAID DECISION OF THE TRIBUNAL HAS BEEN CONFIRMED BY THE HONBLE ALLAHABAD HIGH CO URT IN THE CASE OF CIT VS. RAJESH KUMAR GARG IN ITA NO. 323 OF 2009 VI DE ORDER DATED 15.02.2011 AND COPY OF ORDER OF HIGH COURT IS FILED AT PAGE 29 OF THE PAPER BOOK. HE HAS CONTENDED THAT ALL THE ENQUIRIES CONDUCTED AT THE BACK OF THE ASSESSEE AND STATEMENT OF SHRI MUKESH GUPTA AND HIS WIFE, THE DIRECTORS OF M/S. CMS SECURITIES LTD. WERE NEVER SU PPLIED TO THE ASSESSEE. THE ACTION OF THE AO HAS BEEN CRITICIZED BY THE TRI BUNAL IN THE CASE OF RAJESH GARG (SUPRA) AND NO RELIANCE HAS BEEN PLACE D ON THE SAME. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD AND DO NOT FIND ANY JUSTIFICATION TO INTERFE RE WITH THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDITION. THE AO, ON THE FACTS OF THE CASE FOUND ITA NOS.64/AGRA/2013 & 549/AGRA/2012 A.YS. 2002 03 & 1999-2000 10 THAT SIMILAR ISSUE HAVE BEEN CONSIDERED IN THE CASE OF HUF OF ASSESSEE AND OTHER FAMILY MEMBERS SHRI RAJESH KUMAR GARG AND SMT. SEEMA GARG WHO HAVE ALSO SHOWN LONG-TERM CAPITAL GAINS OF THE SIMILAR NATURE OF THE SAME BROKER AND OF THE SAME SCRIP IN THE ASSESSMENT YEAR UNDER APPEAL, WHICH WERE FOUND TO BE BOGUS BY THE AO AND ADDITION S HAVE BEEN CONFIRMED BY THE LD. CIT(A) AS WELL. HOWEVER, THE L D. COUNSEL FOR THE ASSESSEE FILED COPY OF THE TRIBUNAL ORDER IN THEIR CASES DATED 31.03.2009 IN WHICH THE ITAT, AGRA BENCH DELETED THE SIMILAR A DDITIONS AND NO RELIANCE WAS PLACED ON THE STATEMENT OF SHRI MUKESH GUPTA AND HIS WIFE. THE ORDER OF THE TRIBUNAL HAS BEEN CONFIRMED BY THE HONBLE ALLAHABAD HIGH COURT VIDE ORDER DATED 15.02.2011. IN THE AFOR ESAID DECISION, IT WAS FOUND THAT THOSE ASSESSEES HAD OBTAINED SHARES IN P REFERENTIAL ALLOTMENT DIRECTLY FROM THE COMPANIES AND THE PURCHASES DECLA RED IN THE BALANCE SHEET OF EARLIER YEARS, WHICH WERE ACCEPTED BY THE DEPARTMENT. SHARES WERE SOLD TO THE REGISTERED STOCK BROKERS AND STOCK EXCHANGE. BROKERS HAVE CONFIRMED THAT MONEY WAS GIVEN THROUGH DRAFT. HONBLE ALLAHABAD HIGH COURT, THEREFORE, ON CONSIDERATION OF THESE RE LEVANT CONSIDERATIONS, CONFIRMED THE FINDINGS OF THE TRIBUNAL THAT THE SAL ES ARE NOT SHAM TRANSACTIONS. ACCORDING TO THE AO, THE FACTS OF THE SE CASES ARE IDENTICAL TO THE CASE OF THE ASSESSEE, THEREFORE, WHEN IN THE ID ENTICAL CASES OF THE FAMILY MEMBERS OF THE ASSESSEE, ADDITIONS HAVE BEEN DELETED BY THE TRIBUNAL AND THE ORDER OF THE TRIBUNAL HAVE BEEN CO NFIRMED BY ALLAHABAD HIGH COURT, THEREFORE, ON SUCH REASON ITSELF, THE D EPARTMENTAL APPEAL IS LIABLE TO BE DISMISSED. FURTHER, THE ASSESSEE HAS F ILED PROPER EVIDENCES BEFORE THE AUTHORITIES BELOW TO SHOW THAT SHARES OF M/S. B.T. TECHNET LTD. WERE ALLOTTED DIRECTLY BY THIS COMPANY @ 10/- PER S HARE AND CONSIDERATION WAS TRANSFERRED THROUGH BANKING CHANNEL. ALL THE AL LOTMENT LETTERS, DRAFTS, CERTIFICATES OF THE COMPANY ARE FILED IN THE PAPER BOO;. THE PROFILE OF M/S. B.T. TECHNET IS ALSO FILED IN THE PAPER BOOK TO SHO W THAT IT WAS A GENUINE COMPANY. THE SAME WERE SHOWN IN THE BOOKS OF EARLIE R YEARS. THEREFORE, THE PURCHASE OF SHARES AND SOURCE OF PURCHASE COULD NOT HAVE BEEN DISPUTED. SAME SHARES WERE SOLD TO THE BROKER, M/S. CMS SECURITIES LTD. DELHI AND ALL THE CONTRACT NOTES, SALE CONSIDERATIO N THROUGH DRAFTS HAVE BEEN FILED IN THE PAPER BOOK TO SUPPORT THE CONTENT ION OF THE ASSESSEE. THE SALE RATE OF RS.114/- PER SHARE IS ALSO SUPPORTED B Y THE INFORMATION RECEIVED FROM M.P. STOCK EXCHANGE. WHATEVER STATEME NTS OF CMS SECURITIES LTD. THROUGH THEIR DIRECTORS WERE RECORD ED WERE NEVER CONFRONTED TO THE ASSESSEE. THEREFORE, THE SAME CAN NOT BE READ IN EVIDENCE, WHICH IS ALSO SUBSTANTIATED BY THE DECISI ON OF HONBLE SUPREME COURT IN THE CASE OF KISHAN CHAND CHELARAM VS. CIT, 125 ITR 713. CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES , IN THE LIGHT OF THE ITA NOS.64/AGRA/2013 & 549/AGRA/2012 A.YS. 2002 03 & 1999-2000 11 DECISION OF THE JURISDICTIONAL ALLAHABAD HIGH COURT IN THE GROUP CASES ABOVE, WE DO NOT FIND ANY JUSTIFICATION TO INTERFER E WITH THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDITION. THE ASSESSEE ON TH E BASIS OF EVIDENCE AND MATERIAL ON RECORD HAS BEEN ABLE TO PROVE THAT HE H AS RECEIVED ENTIRE SALE CONSIDERATION OF SHARES THROUGH KNOWN SOURCES. THER EFORE, NO ADDITION U/S. 68 COULD BE MADE AGAINST THE ASSESSEE. AS A RE SULT, THE DEPARTMENTAL APPEAL FAILS AND IS DISMISSED. 12. THE I.T.A.T., AGRA BENCH WHILE DECIDING THE ISS UE IN THE CASE OF ACIT VS. SHRI RAM PRAKASH GARG IN ITA NO.237/AGRA/2011 VIDE ORDER DATED 18.01.2013 CONSIDERED ALL THE RELEVANT JUDGEMENTS INCLUDING TH E JUDGEMENT OF HONBLE JURISDICTIONAL HIGH COURT OF ALLAHABAD IN THE CASE OF CIT VS. SMT. SEEMA GARG AND CIT VS. RAJESH KUMAR GARG IN INCOME TAX APPEALS NOS .323 OF 2009 AND 224 OF 2009, JUDGEMENT DATED 15.02.2011. THE RELEVANT FAC TS AND FINDING OF THE COURT ARE AS UNDER :- 1. THESE TWO APPEALS ARISES OUT OF THE ORDER DATED 31.03.2009 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, AGRA I N RESPECT OF ASSESSMENT YEAR 2001-02. 2. IAN THE RELEVANT ASSESSMENT YEAR, THE ASSESSEES HAD SOLD SHARES AND CLAIMED LONG TERM CAPITAL GRAINS. THIS WAS DIS ALLOWED BY THE ASSESSING OFFICER ON THE GROUND THAT THE SHARE TRAN SACTIONS WERE NO GENUINE. 3. THE ASSESSEES FILED THE APPEALS THAT WERE DISMIS SED BY THE COMMISSIONER (APPEALS). THE ASSESSEES FILED APPEAL S BEFORE THE TRIBUNAL THAT WERE ALLOWED. HENCE THE PRESENT APPE ALS. 4. WE HAVE HEARD SRI SHAMBHU CHOPRA, COUNSEL FOR TH E INCOME TAX DEPARTMENT (THE DEPARTMENT) AND SRI RAHUL AGARW AL FOR THE ASSESSEES. ITA NOS.64/AGRA/2013 & 549/AGRA/2012 A.YS. 2002 03 & 1999-2000 12 5. THE TRIBUNAL HAS RECORDED THE FINDING OF FACT TH AT THE SALES WERE GENUINE AND WERE NOT SHARE TRANSACTION. THIS FINDING WAS RECORDED ON CONSIDERING THAT: (I) THE ASSESSEE HAD OBTAINED SHARES IN PREFERENTIA L ALLOTMENT DIRECTLY FROM THE COMPANIES; (II) THE PURCHASES WERE ALSO DECLARED IN THE BALANC E SHEETS OF THE EARLIER YEARS THAT WERE ACCEPTED BY THE DEPARTMENT; (III) THE SHARES WERE SOLD TO THE REGISTERED STOCK BROKERS AND THE STOCK EXCHANGE; (IV) THE BROKERS HAD ALSO CONFIRMED THE TRANSACTION AND THE MONEY WAS GIVEN THROUGH DRAFT. 6. THE AFORESAID CONSIDERATIONS ARE RELEVANT CONSID ERATIONS. THE FINDING THAT THE SALES ARE NOT SHAM TRANSACTIONS IS NOT ILLEGAL. IT IS FINDING OF FACT. THERE IS NO ILLEGALITY IN THE SAME. 7. THERE IS NO MERIT IN THE APPEALS. THE APPEALS A RE DISMISSED. 13. CONSIDERING THE FACTS, WE NOTICE THAT THE ASSES SEE HAS DISCHARGED THE BURDEN THAT THE SHARE TRANSACTIONS WERE GENUINE. THE ASSE SSEE HAS FURNISHED ALL THE RELEVANT MATERIALS AS NOTED IN THE ABOVE JUDGEMENT OF HONBLE HIGH COURT. WE FIND THAT ON IDENTICAL SET OF FACTS, THE I.T.A.T., AGRA BENCH HAS DELETED SUCH ADDITION IN THE CASE OF ACIT VS. SHRI RAM PRAKASH G ARG (SUPRA). TO MAINTAIN CONSISTENCY, WE FOLLOW THE ABOVE ORDER OF I.T.A.T., AGRA BENCH AND IN THE LIGHT OF THAT, ADDITION OF RS.10,36,824/- IS DELETED. 14. GROUND NO.7 IS PERTAINING TO ADDITION OF RS.70, 000/-, RS.2,024/- AND RS.51,841/-. DURING THE ASSESSMENT PROCEEDINGS, TH E A.O. NOTICED THAT THE ASSESSEE ITA NOS.64/AGRA/2013 & 549/AGRA/2012 A.YS. 2002 03 & 1999-2000 13 HAS INFLATED OPENING BALANCE OF CAPITAL AS ON 01.04 .2001 BY RS.70,000/-. THE A.O. NOTICED THAT IN THE CAPITAL ACCOUNT ENCLOSED WITH T HE RETURN, OPENING CAPITAL WAS SHOWN AT RS.21,55,453/- BUT THE CAPITAL ACCOUNT FIL ED DURING THE COURSE OF ASSESSMENT PROCEEDING SHOWN A BALANCE OF RS.22,25,4 53/-. THE ASSESSEE FURNISHED EXPLANATION THAT THERE IS AN ADJUSTMENT OF RS.70,00 0/- ON ACCOUNT OF PURCHASE OF SHARES OF M/S. GOYAL ACHAL SAMPATI VIKAS & NIYOJAN NIGAM LIMITED WHICH WERE PURCHASED IN THE LAST YEAR AND THE SAME WAS BY MIST AKE NOT SHOWN IN THE CAPITAL ACCOUNT. THE A.O. HAS ALSO MADE ADDITION OF RS.2,0 84/- ON ACCOUNT OF DRAFT COMMISSION AND RS.51,841/- ON ACCOUNT OF COMMISSION WHICH WOULD HAVE BEEN PAID BY THE ASSESSEE ON THE AMOUNT OF RS.10,36,824/ -. THE ADDITION MADE BY HE A.O. HAS BEEN CONFIRMED BY THE CIT(A). 15. THE LD. AUTHORISED REPRESENTATIVE SUBLIMED THAT IT IS ADMITTED FACT THAT THE SHARES WERE PURCHASED ON 05.02.2000, THEREFORE, ADD ITION CANNOT BE MADE IN THE YEAR UNDER CONSIDERATION. HE FURTHER SUBMITTED THAT OTHER ADDITIONS ARE CONSEQUENTIAL TO THE ADDITION OF RS.10,36,824/-. 16. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTH ER HAND, RELIED UPON THE ORDER OF CIT(A). ITA NOS.64/AGRA/2013 & 549/AGRA/2012 A.YS. 2002 03 & 1999-2000 14 17. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. SHARES WERE PURCHASED N 05.02.2000 AND THERE IS A M ISTAKE ON THE PART OF THE ASSESSEE BY NOT SHOWING PROPERLY THE SHARES SOLD IN THE CAPITAL ACCOUNT. HOWEVER, IF ANY ADDITION IS REQUIRED TO BE MADE, THAT SHOULD BE MADE IN THE YEAR OF PURCHASE OF SHARES AND NOT IN THE YEAR UNDER CONSIDERATION. IN THE LIGHT OF THE FACT, THE ADDITION OF RS.70,000/- CANNOT BE MADE IN THE YEAR UNDER CONSIDERATION. OTHER ADDITIONS OF RS.2,084/- AND RS.51,841/- ARE CONSEQU ENTIAL TO THE TRANSACTION PERTAINING TO THE ADDITION OF RS.10,36,824/-. SINC E THE ADDITION OF RS.10,36,824/- HAS BEEN DELETED BY US, IN THE LIGHT OF THE FACT, T HESE ADDITIONS OF RS.2,084/- AND RS.51,841/- ARE ALSO DELETED. 18. GROUNDS NO.8, 9 & 10 ARE GENERAL IN NATURE REQU IRE NO FINDING. 19. IN THE RESULT, APPEAL OR THE ASSESSEE IS PARTLY ALLOWED AS INDICATE ABOVE. 20. NOW WE TAKE UP ITA NO.549/AGRA/2012 FOR A.Y. 1999-2000 . GROUNDS NO.1 & 2 HAVE NOT BEEN PRESSED BY THE LD. AUTHORISE D REPRESENTATIVE, THEREFORE, THE SAME ARE DISMISSED AS NOT PRESSED. ITA NOS.64/AGRA/2013 & 549/AGRA/2012 A.YS. 2002 03 & 1999-2000 15 21. THE REMAINING GROUNDS OF APPEAL PERTAIN TO ADDI TION OF RS.12,27,307/-. THE BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSEE MADE AN APPLICATION FOR SHARES OF BRILLIANT PORT FOLIO LIMITED AND APPLIED 2000 SHARE S @ RS.10/- PER SHARE. THE ALLOTMENT WAS MADE OF 18800 SHARES AND PAYMENTS WER E MADE OF RS.50,000/- WITH APPLICATION MONEY AND RS.1,38,000/- THROUGH D.D. DA TED 22.04.1997. THE ASSESSEE SOLD THE ABOVE SHARES THROUGH BROKER M/S. RAKESH NA GAR & CO. FOR RS.12,09,169/-. THE DETAILS OF PAYMENT RECEIVED AS NOTED FROM THE O RDER OF CITA) AT PAGE NO.11 ARE AS UNDER :- DD NO. DATE AMOUNT 296305 18.06.1998 399200 294442 24.07.1998 249500 294689 28.07.1998 108959 294873 05.08.1998 449100 ADD DD COMMISSION 2410 TOTAL AMOUNT 1209169 22. THE A.O. MADE TOTAL ADDITION OF RS.12,27,307/- INCLUDING PAYMENT OF COMMISSION RS.18,137/-. THE CIT(A) CONFIRMED THE O RDER OF A.O. ITA NOS.64/AGRA/2013 & 549/AGRA/2012 A.YS. 2002 03 & 1999-2000 16 23. THE LD. AUTHORISED REPRESENTATIVES SUBMITTED TH AT THE FACTS OF THE CASE ARE IDENTICAL TO THE FACTS OF THE CASE OF SMT. SHAKTI D ARGUN IN ITA NO.64/AGRA/2013 AND THE SUBMISSIONS ARE ALSO SIMILAR AS WERE MADE I N THE SAID CASE. 24. SINCE THE FACTS ARE IDENTICAL, WE, THEREFORE, F OLLOW THE ABOVE DISCUSSIONS MADE IN THE CASE OF SMT. SHAKTI DARGUN IN ITA NO.64 /AGRA/2013. FOLLOWING THE SAID DISCUSSIONS, WE DELETE THE ADDITION OF RS.12,2 7,307/-. THUS, THIS APPEAL IS ALSO PARTLY ALLOWED AS INDICATED ABOVE. 25. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE S ARE PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, AGRA TRUE COPY
