Shri Tarun Tejkumar Dugar(HUF), RAJKOT-GUJARAT V. The Income Tax Officer, Ward-2, GANDHIDHAM

ITA 67/RJT/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8283 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 26-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P S BHALLA
• Keywords: Accommodation entries
• Section: 133(6); 143(1); 201; 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: SHRI RAJPAL YADAV, JUDICIAL MEMBER AND S H RI AMARJIT SINGH , ACCOUNTANT MEMBER [CONDUCTED THROUGH E - COURT AT AHMEDABAD] SHRI TEJKUMAR M. GUGAR(HUF), DBZ - 2, GANDHIDHAM PAN: AABHT5545G (APPELLANT) VS THE ITO, WARD - 2, GANDHIDHAM (RESPONDENT) SHRI TARUN TEJKUMAR GUGAR(HUF), DBZ - 2, GANDHIDHAM PAN: AABHT5545G (APPELLANT) VS THE ITO, WARD - 2, GANDHIDHAM (RESPONDENT) REVENUE BY : S H RI P.S. BHALLA , SR. D . R. ASSESSEE BY: WRITTEN SUBMISSION DATE OF HEARING : 11 - 09 - 2 019 DATE OF PRONOUNCEMENT : 23 - 09 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - I T A NO S . 65 & 66 / RJT /20 16 A SSESSMENT YEAR 200 7 - 08 & 2008 - 09 ITA NO. 67 /RJT/20 16 A SSESSMENT YEAR 2008 - 09 I.T.A NO S . 65 TO 67 /RJT /20 16 A.Y. 2007 - 08 TO 2008 - 09 PAGE NO SHRI TARUN TEJKUMAR DUGAR (HUF) & OTHERS VS. ITO 2 TWO APPEALS OF THE ASSESSEE IN THE NAME OF SHRI TE JKUMAR M. DUGAR HUF AND OTHER APPEAL OF THE ASSESSEE IN THE CASE OF SHRI TARUN TEJKUMAR DUGAR HUF ARE FILED AGAINST THE DECISION OF LD. CIT(A) IN CONFIRMING THE ORDER OF ASSESSING OFFICER ON SIMILAR ISSUES PERTAINING T O REJECTING THE CLAIM U/S. 10(38) OF THE ACT AND CONFIRMING THE ORDER PASSED BY THE ASSESSING OFFICER U/S. 144 R . W . S . 147 OF THE ACT. SINCE THE COMMON ISSUE S ON SIMILAR FACT S ARE IN VOLVED IN ALL THE THREE APPEALS FILED BY THE ASSESSEES, THEREFORE, FOR THE SAKE OF CONVENIENCE , ALL THESE ARE ADJUDICATED TOGETHER BY TAKING THE FACTS OF ITA NO. 65 /AHD/52016 AS LEAD CASE AND ITS FINDING WILL BE APPLICABLE TO THE OTHER TWO CASES. 2. THE F ACT IN BRIEF IS THAT ASSESSEE HAS FILED RETURN OF INCOME ON 31 ST JAN, 2008 DECLARING TOTAL INCOME OF RS. 1 , 43 , 404/ - . THE RETURN OF INCOME WAS PROCESSED U/S. 143(1) OF THE ACT. SUBSEQUENTLY, NOTICE U/S. 148 OF THE ACT WAS ISSUED ON 25 TH MARCH , 2013. DUR ING THE COURSE OF ASSES SMENT, THE ASSESSING OFFICER STATED THAT THE SEARCH ACTION WAS CARRIED OUT IN THE CASE OF MAHA S AGAR GROUP IN MUMBAI. DURING THE COURSE OF SEARCH ACTION, STATEMENT OF ITS KEY PERSON SHRI MUK ESH CHOKSHI WAS RECORDED IN WHICH HE HAS A DMITTED THAT HE AND HIS GROUP WERE ENGAGED IN FRAUDULENT DEALING ACTIVITIES AND IN GIVING ACCOMMODATION ENTRIES IN ORDER TO ENABLE THE CLIENTS TO DECLARE SPECULATION PROFIT/LOSS, SHORT TE RM CAPITAL GAIN, LONG TERM CAPITAL PROFIT/LOSS ON ACCOUNT OF COMMODIT Y TRADING , INTRODUCE SHARE APPLICATION MONEY. MR. CHOKSHI HAS ADMITTED THAT HE WAS ONLY INVOLVED IN GIVING ACCOMMODATION ENTRIES. THE ASSESSEE WAS ALSO IDENTIFIED BY SHRI MUKESH CHOKSI AS ONE OF SUCH BENEFICIARIES . THEREFORE , ASSESSEE WAS ISSUED SHOW CAU SE TO EXPLAIN GENUINENESS OF PURCHASE AND SALE OF SHARES OF TALENT INFOWAYS LTD WHICH I.T.A NO S . 65 TO 67 /RJT /20 16 A.Y. 2007 - 08 TO 2008 - 09 PAGE NO SHRI TARUN TEJKUMAR DUGAR (HUF) & OTHERS VS. ITO 3 WAS ONE OF THE GROUP COMPANY OF MR. MUKESH CHOKSI. IN THE SHOW CAUSE NOTICE, IT WAS STATED THAT NO SUFFICIENT CASH ON HAND WAS AVAILABLE WITH THE ASSESSEE AT THE TIME OF PURCHASE OF 4300 SHARES AT RS. 6 , 889/ - OF TALENT INFOWAYS LTD. ON 20 TH APRIL, 2006. DURING THE COURSE OF SEARCH ACTIO N, HE HAD IN HIS STATEMENT DATED 16 TH JAN, 2013 IDENTIFIED 82 BENEFICIARIES INCLUDING THE NAME OF ASSESSEE CERTIFIED THAT THERE WAS NO AC TUAL SALE OF SHARES AND THE ASSESSEE WAS GIVEN ONLY ACCOMMODATION ENTRY. DURING THE COURSE OF ASSESSMENT , THE ASSESSEE HAS PRODUCED THE COPY OF BILL OF THE SHARE BROKER. HOWEVER, THE ASSESSING OFFICER ON FURTHER VERIFICATION HAS FOUND THAT THE BROKER ME NTIONED THAT SHARES WERE PURCHASE D THROUGH NSE UNDER SETTLEMENT 200 6069 DATED 17 TH APRIL , 2006. HO WEVER, THE ASSESSING OFFICER FOUND THAT THE COMPANY NAMELY TALENT INFOWAYS LTD. WAS NEITHER LISTED PRESENTLY NOR WAS EVER LISTED WITH THE NSE. TH E ASSESSING OFFICER ALSO NOTICED THAT THE STATUS OF TALENT INFOWAYS LTD. WAS NOT TRACEABLE ON TRADING LIST OF EXCHAN GE AND THE ASSESSING OFFICER HAD MADE FURTHER INQUIRY FROM THE NSE U/S. 133(6) OF THE ACT AND IT WAS REPORTED BY THE NSE THAT AFORESAID COMPANY WAS NO T AND NEVER LISTED WITH THEM FOR ANY TRANSACTION. THE ASSESSING OFFICER HAS FURTHER NOTICED THAT SETTLEMENT NO. GIVEN BY THE ASSESSEE WAS NOT GENUINE. IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES, THE ASSESSING OFFICER OBSERVED THAT PURCHASE OF SHAR E OF TALENT INFOWAYS LTD. FOR RS. 6989 WAS MERELY AN ACCOMMODATION ENTRY , THEREFORE, THE SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 3. THE ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). T HE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE . I.T.A NO S . 65 TO 67 /RJT /20 16 A.Y. 2007 - 08 TO 2008 - 09 PAGE NO SHRI TARUN TEJKUMAR DUGAR (HUF) & OTHERS VS. ITO 4 4. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, NOBODY HAS ATTENDED FROM THE SIDE OF THE ASSESSEE. HOWEVER , THE ASSESSEE HAS FILED WRITTEN SUBMISSION. AFTER TAKING INTO CONSIDERATION THE WRITTEN SUBMISSION OF THE ASSESSEE AND AFTER HEARING LD. DEPARTMENTAL REPRESENTATIVE IT IS NOTICED THAT THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 6989 BY TREATING THE TRANSACTION OF PURCHASE OF SHARE OF TALENT INFOWAYS LTD. AS MERE ACCOMMODATION E NTRY. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFF ICER HAS MADE VERIFICATION FROM MUMBAI STOCK EXCHANGE AND NATIONAL STOCK EXCHANGE L TD. MUMBAI TO VERIFY THE GENUINENESS OF PURCHASE OF SHARES OF 4300 OF TAL ENT INFOWAYS LTD. AS PER THE REPORT/INFORMATION RECEIVED FROM THE EXCHANGE IT HAS BEEN CATEGORICALL Y ESTABLISHED THAT THE AFORESAID COMPANY WAS NOT AND NEVER LISTED WITH THEM FOR TRANSACTION AND IT WAS ALSO REPORTED THAT THE SETTLEMENT NO. GIVEN IN THE DOCUMENT PRODUCED BY ASSESSEE WAS NOT GENUINE. CONSIDERING THE ABOVE MATERIAL FACT, WE DO NOT FIND AN Y SUBSTANCE IN THE APPEAL OF THE ASSESS EE AND I T IS CLEARLY ESTABLISHED FROM THE VERIFICATION MADE BY THE ASSESSING OFFICER THAT THE CLAIM OF THE ASSESSEE WAS NOT GENUINE . REGARDING OTHER GROUNDS OF APPEAL OF THE ASSESSEE THAT ASSESSING OFFICER HAS PASSE D ORDER U/S. 144 R.W.S. 147, IN THIS REGARD, WE HAVE NOTICED THAT ASSESSING OFFICER HAS INCORPORATED ALL THE DETAILS AND SUBMISSION MADE BY THE ASSESSEE. THEREFORE, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL. ACCORDINGLY, THE APPEAL OF THE ASSESSE E IS DISMISSED. SIMILARLY ON IDENTICAL FACTS AND ISSUES THE OTHER APPEALS OF THE ASSESSEE VIDE ITA NO. 66/RJT/201 6 EXCEPT GROUNDS OF APPEAL NO. 4 AND 5 WHICH IS BEING ADJUDICATED SEPARATELY AND THE APPEAL ITA NO. 67/RJT/2016 OF SHRI TARUN TEJKUMAR DUGER ( HUF) ARE ALSO DISMISSED. I.T.A NO S . 65 TO 67 /RJT /20 16 A.Y. 2007 - 08 TO 2008 - 09 PAGE NO SHRI TARUN TEJKUMAR DUGAR (HUF) & OTHERS VS. ITO 5 GROUNDS OF APPEAL NO. 4 & 5 VIDE ITA NO. 66/RJT/2016 5. THE ASSESSING OFFICER HAD MADE ADDITION OF RS. 2 , 325/ - . THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE WAS HAVING TOTAL CASH BALANCE TO THE AMOUNT OF RS. 24 , 675/ - WHER EAS THE ASSESSEE HAD MADE TOTAL CASH PAYMENT TO THE AMOUNT OF RS. 27 , 000/ - . SINCE THE ASSESSEE COULD NOT EXPLAIN THE DISCREPANCY OF EXCESS CASH PAYMENT OF R S. 2 , 325/ - , THE ASSESSING OFFICER ADDED IT TO THE TO T AL INCOME OF THE ASSESSEE. THE LD. CIT(A) HA S SUSTAINED THIS ADDITION FOR NEGATIVE CASH BALANCE . ON PERUSAL OF THE MATERIAL ON RECORD, WE DO NOT FIND ANY SUBSTANCE IN THE CLAIM OF THE ASSESSEE STATING THAT CASH OF RS. 15000/ - HAD BEEN ERRONEOUSLY RECORDED ON 31 ST MARCH, 2007 WHICH WAS ACTUALLY RECE IVED ON 31 - 10 - 2007. THE ASSESSEE COULD NOT DISP ROVE THE INFIRM ITY IN THE FINDING OF LD. CIT(A) WITH ANY RELEVANT SUPPORTING MATERIAL THEREFORE THIS GROUND OF APPEAL OF THE ASSESSEE STANDS DISMISSED. GROUND NO. 5 6. DURING THE COURSE OF ASSESSMENT, THE ASS ESSING OFFICER NOTICED THAT ASSESSEE HAD RECEIVED CASH CREDIT OF RS. 10,000/ - FROM S HRI ARUN DUGER BUT TH E SAME WAS NOT SHOWN IN THE CASH ACCOUNT , THEREFORE , THE ASSESSING OFFICER HAD ADDED THE SAME INTO THE TOTAL INCOME OF THE ASSESSEE. THE LD. CIT(A) HAS DI SMISSED THE APPEAL OF THE ASSESSEE. 7. ON PERUSAL OF THE MATERIAL ON RECORD AND HEARING THE LD. DEPARTMENTAL REPRESENTATIVE , IT IS NOTICED THAT ASSESSEE HAD EXPLAINED THAT BECAUSE OF MISTAKE THE ACCOUNTANT HAD NOT SHOWN THE C ASH CREDIT IN THE CASH ACCOUNT AND THERE WAS NO UN ACCOUNTED MONEY RECEIVED. IN THIS REGARD, WE HAVE NOT ICED THAT THE ASSESSING OFFICER ACKNOWLEDGE D IN HIS F INDING THAT SHRI ARUN DUGER I.T.A NO S . 65 TO 67 /RJT /20 16 A.Y. 2007 - 08 TO 2008 - 09 PAGE NO SHRI TARUN TEJKUMAR DUGAR (HUF) & OTHERS VS. ITO 6 CONFIRMED THAT HE HAD PROVIDE D CASH CREDIT TO THE AMOUNT OF RS. 10,000/ - TO THE ASSESSEE. THE ASSESSIN G OFFICER HAS ACCEPTED THE SOURCE OF CASH CREDIT AND THE ASSESSING OFFICER HAD ALSO INCLUDED THE AMOUNT OF RS. 10,000/ - AS CASH IN HAND OF THE ASSESSEE WHILE ADJUDICATING NEGATIVE CASH BALANCE OF RS. 2325/ - AS PARA 5 OF THE ASSESSMENT ORDER. IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES, WE FIND MERIT IN THIS GROUND OF APPEAL OF THE ASSESSEE, THEREFORE, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, APPEAL ITA 65/RJT/2016 AND 67/RJT/2016 ARE DISMISSED AND APPEAL ITA 66/RJT/2016 IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OUR T ON 23 - 09 - 201 9 SD/ - SD/ - (RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 23 /09 /201 9 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT