ACIT, New Delhi V. Smt. Kusum Gupta, New Delhi

ITA 6445/DEL/2015

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3713 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 04-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGAINST DATED PASSED
• Keywords: Unexplained cash credit; Additional evidence; Notional interest
• Section: 68

Judgement Text

1 ITA NO. 6445/DEL/2015 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 6445/DEL/20 15 (A.Y 2012-13) (THROUGH VIDEO CON FERENCING) ACIT CENTRAL CIRCLE-14, ROOM NO. 354, E-2, ARA CENTRE, JHANDEWALAN EXTENSION, NEW DELHI (APPELLANT) VS KUSUM GUPTA 21/40, SHAKTI NAGAR NEW DELHI AEDPG4771M (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST ORDER DATED 15/09/2015 PASSED BY CIT(A)-XXVI, NEW DELHI FOR ASSESSMENT YE AR 2012-13. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 3,41,812/- ON ACCOUNT OF ALV OF TWO PROPERTIES. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 1,77,20,000/- MADE BY AO ON ACCOUNT OF UNEXPLAINED CREDITS. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN APPELLANT BY SH. ROCKTIM SAIKIA, SR. DR RESPONDENT BY SH. DIVYANSH JAIN, ADV & SH. RAJAT JAIN, CA DATE OF HEARING 06.09.2021 DATE OF PRONOUNCEMENT 12.10.2021 2 ITA NO. 6445/DEL/2015 DELETING THE ADDITION OF RS. 1,23,600/- MADE BY AO ON ACCOUNT OF DISALLOWANCE OF INTEREST. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.4,13,172/- MADE BY AO O N ACCOUNT OF UNEXPLAINED SALE / PURCHASE OF SHARES. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.50,00,000/- MADE BY AO ON ACCOUNT OF UNEXPLAINED CREDITS U/S 68 OF THE INCOME TAX ACT, 1 961. 6. THAT THE CIT (A) HAS ERRED IN FACTS AND IN LAW I N ALLOWING THE APPEAL OF THE ASSESSEE WITHOUT INDEPENDENTLY VERIFYING THE FACTS OF THE CASE, BEING A FACT FINDING AUTHORITY AS MENDATED BY THE HONBLE JURISD ICTIONAL HIGH COURT DELHI IN THE CASE OF CIT VS. JANSAMPARK ADVERTISING RATHE R THAN GIVING OBSERVATION AS TO THAT THE A.O. HAS FAILED TO CONDUCT REQUISITE ENQUIRIES. 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT (A) HAS ERRED IN ADMITTING FRESH AND ADDITIONAL EVIDENCES IN THE COU RSE OF APPEAL WITHOUT ALLOWING ANY OPPORTUNITY TO THE AO. (A) THE ORDER OF THE LD. CIT(APPEALS) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. 3. THE ASSESSEE FILED E-RETURN OF INCOME AT LOSS OF RS. 3,79,885/- ON 29/9/2012. THE ASSESSEE DERIVED INCOME FROM HOUSE PROPERTY, INCOME FROM BUSINESS, INCOME FROM CAPITAL GAIN AND INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER MADE ADDITION OF RS. 3,41,815/- O N ACCOUNT OF ANNUAL LETTING VALUE OF TWO PROPERTIES, RS. 1,77,20,000/- ON ACCOU NT OF UNEXPLAINED CREDITS, RS. 1,23,600/- ON ACCOUNT OF DISALLOWANCE OF INTERE ST, RS. 4,13,172/- ON ACCOUNT OF UNEXPLAINED SALE/PURCHASE OF SHARES, RS. 50,00,000/- ON ACCOUNT OF UNEXPLAINED CREDIT U/S 68 OF THE INCOME TAX ACT , 1961. THUS, THE ASSESSING OFFICER ASSESSED THE INCOME OF THE ASSESS EE AT RS.2,45,18,025/-. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT (A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 3 ITA NO. 6445/DEL/2015 5. AS REGARDS TO GROUND NO. 1, THE LD. DR SUBMITTED THAT THE ASSESSEE HAS PAID HOUSE TAX OF RS.10,404/- AND RS. 1,289/-ON TWO PROPERTIES AND INFORMED THE ASSESSING OFFICER THE ALV OF PROPERTY NO. 1 AT RS.34,725/- AND REGARDING THE COMMERCIAL PROPERTY AT WAZIRPUR. THE LD. DR SU BMITTED THAT THE ASSESSEE IS PAYING MCD TAX OF RS.10,404/-. THE LD. DR SUBMI TTED THAT THE ALV OF THE BOTH PROPERTIES AT MINIMUM WILL BE RS.3,00,000/- PE R ANNUM AND HENCE ALV IS DETERMINING AT RS.3,00,000/-. 6. THE LD. AR SUBMITTED THAT IT IS JUST AN ESTIMATI ON OF ALV WITHOUT ANY SUPPORT OR FINDING BY THE ASSESSING OFFICER. THERE FORE, THE CIT(A) HAS RIGHTLY DELETED THIS ADDITION. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIALS AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT T HE ASSESSING OFFICER WITHOUT ANY BASIS, ESTIMATED THE ANNUAL LETTING VALUE OF TH E SAID PROPERTIES. THE SAID PROPERTIES WERE NOT LET OUT DURING THE PRESENT ASSE SSMENT YEAR. AS THOSE PROPERTIES WERE NOT IN HABITABLE CONDITIONS AND NO TENANT WAS FOUND IN RESPECT OF THOSE PROPERTIES. THEREFORE, THE CIT(A) HAS RIG HTLY DELETED THE ADDITION. THERE IS NO NEED TO INTERFERE WITH THE FINDINGS OF THE CIT(A). HENCE, GROUND NO. 1 OF THE REVENUES APPEAL IS DISMISSED. 8. AS REGARDS GROUND NO. 2 RELATING TO ADDITION OF RS. 1,77,020/-ON ACCOUNT OF UNEXPLAINED CREDITS, THE LD. DR SUBMITTED THAT T HE LOAN WAS TAKEN FROM THE DAUGHTER OF THE ASSESSEE AND THE ASSESSEE HAS NOT G IVEN ANY DETAILS RELATING TO THE AMOUNT OF RS. 61,00,000/-. THE LD. DR SUBMITTE D THAT THIS ASPECT NEEDS TO BE VERIFIED AND THE CIT(A) HAS INCORRECTLY DELET ED THIS ADDITION. 9. THE LD. AR SUBMITTED THAT THE IDENTITY, CREDITWO RTHINESS AND GENUINENESS OF THE TRANSACTION WITH REGARD TO THE A MOUNTS CREDITED AS LOAN FROM ASSESSEES DAUGHTER HAVE BEEN PROVED AS MS. AS IMA GUPTA HAS DISCLOSED 4 ITA NO. 6445/DEL/2015 THE PARTICULARS REGARDING LONG TERM CAPITAL GAIN EA RNED BY HER IN ASSESSMENT YEAR 2011-12. THE SOURCE OF CREDIT IN THE LENDERS BANK ACCOUNT ARE DIRECTLY RELATED TO SALES OF SHARES AND, THEREFORE, THERE IS NO REASON TO DOUBT THE GENUINENESS. THE LD. AR RELIED UPON THE ORDER OF T HE CIT(A). 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THE CIT(A) HA S OBSERVED THAT THE ASSESSING OFFICER HAS MISLEAD THE FACTS AS ONLY AN AMOUNT O F RS. 61,36,000/- HAD BEEN RECEIVED AS LOAN DURING THE YEAR UNDER CONSIDERATIO N FROM MS. ASIMA GUPTA. THE EVIDENCES SHOWN BEFORE THE ASSESSING OFFICER HA S ESTABLISHED THE GENUINENESS OF THE TRANSACTION AND DETAILS RELATED TO THE ORIGIN OF THE SALES OF THE SHARES WERE ALSO BEFORE THE ASSESSING OFFICER. THE CIT(A) HAS GIVEN A CATEGORICAL FINDING THAT THE SOURCES OF CREDIT IN T HE LENDERS BANK ACCOUNT ARE DIRECTLY RELATED TO THE PURCHASE OF SHARES AND THE SAME WAS ALSO PLACED BEFORE THE ASSESSING OFFICER. THEREFORE, THE CIT(A) HAS RIGHTLY DELETED THIS ADDITION. HENCE, GROUND NO. 2 OF THE REVENUES APPEAL IS DISM ISSED. 11. AS REGARDS GROUND NO. 3, RELATING TO ADDITION O F RS. 1,23,600/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE O F INTEREST, THE LD. DR SUBMITTED THAT THE ASSESSEE HAS GIVEN LOAN OF RS. 1 0,30,000/- WITHOUT ANY INTEREST TO HER SPOUSE. THE ASSESSING OFFICER HAS RIGHTLY CHARGED THE INTEREST ON THE SAID ADDITIONS AT THE RATE OF 12%. 12. THE LD. AR SUBMITTED THAT THE ASSESSEE HAS NOT RECEIVED ANY INTEREST ON THE SAID ADVANCE/LOAN TO HER HUSBAND AND THE ASSESS ING OFFICER HAS PRESUMED THE NOTIONAL INTEREST WHICH WAS RIGHTLY DELETED BY THE CIT(A). 13. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER HAS PRESUMED THE NOT IONAL INTEREST AT THE RATE OF 12% WITHOUT ANY BASIS. THE ASSESSING OFFICER MERELY ON SURMISES AND CONJUNCTURES OBSERVED THAT THE ADVANCE WAS INTEREST BOUND AND NOT INTEREST 5 ITA NO. 6445/DEL/2015 FREE. THE ASSESSEE HAS GIVEN AN ADVANCE TO HER HU SBAND WITHOUT CHARGING ANY INTEREST. THUS, IT IS RIGHTLY DELETED BY THE CIT(A) . GROUND NO. 3 OF THE REVENUES APPEAL IS DISMISSED. 14. AS REGARDS GROUND NO. 4 RELATING TO ADDITION OF RS. 4,13,172/- ON ACCOUNT OF UNEXPLAINED SALE/PURCHASE, THE LD. DR SU BMITTED THAT THE ASSESSEE HAS SOLD SHARES OF MOIL AT A CONSIDERATION OF RS. 1 6,91,903/- AGAINST PURCHASE OF RS. 21,05,075/- WITHOUT ANY DOCUMENTARY EVIDENCE IN RESPECT OF PURCHASE AND SALE. THE CIT(A) HAS DELETED THIS ADD ITION ONLY ON THE GROUND THAT THE DETAILS WERE THERE BEFORE THE CIT(A). THU S, THE LD. DR SUBMITTED THAT THE ADDITION MAY BE SUSTAINED. 15. THE LD. AR RELIED UPON THE ORDER OF THE CIT(A) AS WELL AS POINTED OUT PAGE NO. 46 AND 49 OF THE PAPER BOOK WHEREIN THE DETAILS OF OPENING AND CLOSING STOCK OF SHARES DURING THE FINANCIAL YEAR 2011-12 W AS SUBMITTED. 16. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THE CIT(A) HA S GONE THROUGH THE DETAILS WHICH WERE VERY MUCH BEFORE THE ASSESSING OFFICER AND AFTER GOING THROUGH THE SAME HAS DELETED THIS ADDITION. THE PURCHASE OF S HARES AS WELL AS THE SALES OF THE SAID SHARES WERE THROUGH RECOGNIZED STOCK EXCHA NGE AND IS SUPPORTED BY THE BROKER NOTE AND THE DETAILS THEREOF. THUS, THE TRANSACTIONS WERE GENUINE AND THE CIT(A) RIGHTLY DELETED THIS ADDITION. HENC E, GROUND NO. 4 OF THE REVENUES APPEAL IS DISMISSED. 17. AS REGARDS GROUND NO. 5 RELATING TO ADDITION OF RS. 50,00,000/- ON ACCOUNT OF UNEXPLAINED CREDITS U/S 68. THE LD. DR SUBMITTED THAT THE FUNDS HAVE BEEN TRANSFERRED IN KARNATAKA BANK FROM NINA B HARTIA OF RS.50,00,000/-, FOR WHICH THE ASSESSEE HAS NOT SUBMITTED ANY EVIDEN CE. THE LD. DR FURTHER SUBMITTED THAT THE CIT(A) HAS NOT TAKEN COGNIZANCE THAT NO EVIDENCE WAS FILED BEFORE THE ASSESSING OFFICER . 6 ITA NO. 6445/DEL/2015 18. THE LD. AR RELIED UPON THE ORDER THE CIT(A) AND FURTHER SUBMITTED THAT ALL THE CONFIRMATIONS IN RESPECT OF ADVANCE GIVEN A ND RECEIVED BACK FROM SMT. NINA BHARTIA WAS BEFORE THE ASSESSING OFFICER ALON G WITH HER ADDRESS AND PERMANENT ACCOUNT NUMBER (PAN) AS WELL AS OTHER DET AILS. THUS, THE ONUS OF IDENTITY, CREDITWORTHINESS AND GENUINENESS HAS BEEN ESTABLISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER DURING THE AS SESSMENT PROCEEDINGS. THEREFORE, THE CIT(A) HAS RIGHTLY ALLOWED THE CONTE NTIONS OF THE ASSESSEE AND DELETED THE ADDITION. 19. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT ALL THE RECOR DS WERE BEFORE THE ASSESSING OFFICER AND THERE IS A SINGLE SENTENCE IN THE ASSES SMENT ORDER STATING THAT THE ASSESSEE HAS NOT GIVEN ANY EVIDENCE. BUT, THE ASSES SEES REPLY ALONG WITH ANNEXURE-13 DATED 27/2/2015 WAS BEFORE THE ASSESSIN G OFFICER WHICH HAS EXPLAINED THE NATURE OF THE TRANSACTION AND THE ADV ANCE GIVEN BY NINA BHARTIA. HENCE, THE IDENTITY, GENUINENESS AND CREDITWORTHINE SS WAS ESTABLISHED BY THE ASSESSEE. THE CIT(A) HAS RIGHTLY GIVEN FINDING THA T THE TRANSACTION WAS GENUINE AND DELETED THE ADDITION. HENCE, GROUND NO. 5 OF R EVENUES APPEAL IS DISMISSED. 20. AS REGARDS GROUND NO. 6 TO 8, THEY ARE GENERAL IN NATURE. HENCE, NOT ADJUDICATED AND DISMISSED. 21. IN RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF OCTOBER, 2021 SD/- SD/- (N. K. BILLAIYA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 12/10/2021 R. NAHEED * 7 ITA NO. 6445/DEL/2015 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI