HANSA H. VASA, MUMBAI V. ITO 21(1)(3), MUMBAI

ITA 6417/MUM/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9192 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 19-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K GOPTAL; SATENDER PANDEY
• Keywords: Share purchase agreement; Accommodation entries
• Section: 69

Judgement Text

. , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI , BEFORE SHRI R. K. GUPTA , JM ITA NO. 6416 / MUM/ 20 1 2 ( ASSESSMENT YEAR : 200 5 - 20 0 6 ) MRS. HETAL K. VASA, 8, RAM NIWAS, SOUTH POND ROAD, VILE PARLE (W), MUMBAI - 400 056. VS. ITO 21(1)(3), M UMBAI PAN/GIR NO. : A DCPV 5777 C ( APPELLANT ) .. ( RESPONDENT ) AND I TA NO. 6417 /MUM/20 1 2 ( ASSESSMENT YEAR :200 5 - 200 6 ) MRS. HANSA H . VASA, 8, RAM NIWAS, SOUTH POND ROAD, VILE PARLE (W), MUMBAI - 400 056. VS. ITO 21(1)(3), MUMBAI PAN/GIR NO. : A ACPV 1760 E ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : MR. K.GOPTAL & MR. SATENDER PANDEY /REVENUE BY : MR. MOHIT JAIN DATE OF HEARING : 5 TH DEC . , 2012 DATE OF PRONOUNCEME NT : 7 TH DEC. ,2012 O R D E R TH ESE TWO APPEALS HAVE BEEN PREFERRED BY THE TWO DIFFERENT ASSESSEE S AGAINST THE ORDER OF LEANED CIT(A) - 32 , MUMBAI RELATING TO THE ASSESSMENT YEAR 2005 - 0 6 . 2. SINCE, T HE COMMON ISSUE IS INVOLVED IN BOTH THESE APPEALS, THEREFORE, THEY ARE DISPOSED OF BY A SINGLE ORDER. ITA NO S . 6416 & 641 7 /20 1 2 2 3 . THE FIRST ISSUE IS AGAINST CONFIRMATION OF ADDITION OF RS. 63,000/ - AND RS. 52,500/ - MADE BY THE ASSESSING OFFICER UNDER SECTION 69 RESPECTIVELY IN BOTH THESE CASES. ON RECEIVING SOME INFORMATIO N FROM DEPARTMENTAL AUTHORITY THAT ONE SHRI NARENDRA R. SHAH, WHO HAD ADMITTED TO BE RUNNING HAWALA RACKET AND PROVIDED THE LIST OF PERSONS WHO HAD LAUNDERED THEIR MONEY AND BECAME THE BENEFICIARIES OF HIS RACKET BY TAKING ACCOMMODATION ENTRIES ON SALE, P URCHASE OF PENNY STOCK COMPANY M/S OSIAN LPG BOTTLING LTD. IN THE SAID LIST PROVIDED BY MR. NARENDER SHAH, THE NAME S OF THE ASSESSEE S W ERE ALSO APPEARING. THEREFORE, THE ASSESSING OFFICER ISSUED NOTICE UNDER SE CTIONS 147/148 TO THE ASSESSEES FOR FILING THE IR RETURNS. R ETURNS WERE FILED. THEREAFTER THE ASSESSING OFFICER FOUND THAT BOTH THE ASSES S EES INDULGED IN ACQUIRING SHARES OF M/S OSIAN LPG BOTTLING LI M ITED FOR RS. 63,000/ - AND RS. 52,500/ - , RESPECTIVELY. THE ASSESSEES WERE ASKED TO EXPLAIN THE SOURCE. IT WAS EXPLAINED THAT THE ASSESSEES HAVE EARNED SPECULATIVE PROFIT FROM SOME BROKERS THROUGH WHOM SHARES WERE PURCHASED AND MOSTLY WERE SETTLED AND, THEREFORE, THERE IS NO UNDISCLOSED INVESTMENTS BY THESE PERSONS, HOWEVER, THE ASSESSING OFFICER WAS NOT SATISF IED. ACCORDINGLY, HE MADE ADDITION OF RS. 63,000/ - AND RS. 52,500/ - IN THE HANDS OF THESE TWO ASSESSEES RESPECTIVELY. 4 . BEING AGGRIEVED WITH THE ACTION OF THE ASSESSING OFFICER, THESE TWO ASSESSES HAVE PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A) , BEFORE WHOM, THE REOPENING OF THE ASSESSMENT AS WELL AS ADDITION ITA NO S . 6416 & 641 7 /20 1 2 3 MADE ON MERIT WERE CHALLENGED. LEARNED C IT (A) WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. ACCORDINGLY, HE DISMISSED THE APPEAL OF THE ASSESSEES. NOW, BOTH THE ASSESSEES ARE IN APPEAL HER E BEFORE THE TRIBUNAL. 5 . LEARNED COUNSEL OF THE ASSESSEES HAS VEHEMENTLY ARGUED THAT THERE WAS NO MATERIAL ON WHICH BASIS THE ASSESSMENT WAS REOPENED. THE AO HAS NOT PROVIDED COPY OF THE REASONS, HOWEVER, THEY WERE PROVIDED BY THE LEARNED CIT(A) AND MERE LY ON SUSPICION, THESE ASSESSMENTS HAVE BEEN REOPENED . 6 . ON MERIT, LEARNED A R STATED THAT THEY DID NOT HAVE ANY LINK WITH MR. NARENDER R. SHAH. BOTH THESE ASSESSEES HAVE PURCHASED SHARES THROUGH M/S ABHIJAI INVESTMENT AND THEY HAVE RECEIVED THE SALE CER TIFICATE. COPIES OF THE SAME ARE PLACED ON RECORD. THOSE SHARES WERE TRANSFERRED IN THE NAME OF THESE TWO ASSESSEES. THERE WAS A CREDIT BALANCE IN RESPECT OF BOTH THESE ASSESSEES WITH M/S ABHIJAI INVESTMENT AND THE SAME WAS ADJUSTED AGAINST PURCHASE OF SHA RES, THEREFORE, THIS IS NOT A CASE OF UNDISCLOSED INVESTMENT. 7 . THE ATTENTION OF THE BENCH WAS DRAWN ON COP IES OF THE SHARE BROKER THROUGH WHOM SHARES WERE PURCHASED, WHICH ARE PLACED IN THE PAPER BOOK AT PAGES 15 TO 24 . IT WAS ALSO EXPLAINED THAT NEITH ER COPY OF STATEMENT OF SHRI NARENDRA R. SHAH WAS PROVIDED TO THE ASSESSEE NOR THE ASSESSEES WERE ALLOWED FOR CROSS - EXAMINATION. THEREFORE, THE ITA NO S . 6416 & 641 7 /20 1 2 4 ADDITION MADE BY THE ASSESSING OFFICER WAS WITHOUT ANY BASIS. RELIANCE WAS PLACED ON THE DECISION OF HON BLE SUP REME COURT IN THE CASE OF KISHINCHAND CHELLARAM VS. CIT, 125 ITR 713. 8 . LEARNED DR HAS STRONGLY PLACED RELIANCE ON THE ORDER OF THE CIT(A) AS WELL AS THE ASSESSING OFFICER. 9 . AFTER CONSIDERING THE ORDERS OF THE AUTHORITIES BELOW AND THE SUBMISSIONS O F PARTIES, I FOUND THAT BOTH THE ASSESSEE S DESERVE TO SUCCEED ON TH E POINT OF ADDITION MADE AND CONFIRMED BY THE LOWER AUTHORITIES . NEITHER COPY OF STATEMENT OF SHRI NARENDRA R. SHAH WAS PROVIDED TO THE BOTH THE ASSESSEES NOR THE ASSESSEES WERE ALLOWED FOR CROSS - EXAMINE THE PERSON ON THE BASIS OF WHOSE STATEMENT THE ADVERSE INFERENCE WAS DRAWN AGAINST THESE ASSESSEES. THE SHARES WERE PURCHASED THROUGH INDEPENDENT SHARE BROKERS. COPY OF THEIR ACCOUNTS IS PLACED ON RECORD. THE SHARE CERTIFICATE S WERE ISSUED T O THE ASSESSEES. KEEPING IN MIND ALL THESE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF VIEW THAT THE ADDITION MADE AND SUSTAINED , IS NOT JUSTIFIED AS THE SAME IS NOT SUSTAINABLE IN THE EYES OF LA W, B ECAUSE WITHOUT PROVIDING COPY OF STATEMENT OR ALLOWING F OR CROSS - EXAMINATION OF THE PERSON ON THE BASIS OF WHOSE STATEMENT, ADDITION HAS BEEN MADE IN THE HANDS OF THESE PERSONS. ACCORDINGLY, I DELETE THE ADDITION OF RS. 63,000/ - AND RS. 52,500/ - IN THE CASE OF BOTH THE ASSESSES, RESPECTIVELY. ITA NO S . 6416 & 641 7 /20 1 2 5 10 . SINCE I HAVE A LLOWED THE GROUNDS ON MERIT, THEREFORE, I AM NOT INCLINED TO DISPOSE OF THE LEGAL GROUNDS AT THIS STAGE. 11 . IN THE RESULT, APPEAL S OF THE ASSESSEE S ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 7 TH DAY OF DEC . 2012. 2012 SD/ - ( ) ( R.K.GUPTA ) / JUDICIAL MEMBER MUMBAI ; DATED : 07 / 1 2 / 2012 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPO NDENT. 3. / THE CIT(A) - X, MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI