Lalla Ram Maurya, New Delhi V. ITO, Ward-32(4), New Delhi

ITA 6752/DEL/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7171 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 24-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAINA SOIN KAPIL
• Assessee Lawyers: SAUBHAGYA AGARWAL
• Keywords: Unexplained cash credit; Income from undisclosed sources; Share purchase agreement; Reasonable cause
• Section: 68; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SH. R. K. PANDA, ACCOUNTANT MEMBER AND SH. KULDIP SINGH, JUDICIAL MEMBER ITA NO.6752/DEL/2018 ASSESSMENT YEAR: 2015-16 LALLA RAM MAURYA C-4/118, 4 TH FLOOR SAFDARJUNG ENCLAVE DEVELOPMENT AREA, NEW DELHI PAN NO.AFYPM2934G VS INCOME TAX OFFICER WARD 32 (4) NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SH. SAUBHAGYA AGARWAL, ADVOCATE RESPONDENT BY SHRI NAINA SOIN KAPIL, SR. DR DATE OF HEARING: 25/07/2019 DATE OF PRONOUNCEMENT: 29/07/2019 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 09.10.2018 OF THE CIT(A)-11, NEW DELHI RELATING TO A. Y. 2015-16. 2. THE ASSESSEE IN ITS VARIOUS GROUNDS OF APPEAL HA S CHALLENGED THE EX-PARTE ORDER OF THE CIT(A) IN CONF IRMING THE ADDITION MADE BY THE ASSESSING OFFICER AMOUNTING TO PAGE | 2 RS.1,52,50,975/- U/S. 68 R.W.S. 115 BBE OF THE ACT, 1961. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 16.03. 2016 DECLARING TOTAL INCOME OF RS.13,41,860/-. THE ASSE SSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED T HAT ASSESSEE HAS EARNED LONG TERM CAPITAL GAIN OF RS.1, 52,50,975/- ON ACCOUNT OF SALE OF SHARES OF M/S. SURBHI CHEMICA LS AND INVESTMENTS PRIVATE LIMITED AND CLAIMED THE SAME AS EXEMPT U/S. 10 (38) OF THE IT ACT. ON BEING QUESTIONED BY THE ASSESSING OFFICER THE ASSESSEE FILED THE FOLLOWING DOCUMENTS TO SUBSTANTIATE THE GENUINENESS OF THE LONG TERMS CAPI TAL GAIN :- A. COPY OF MONEY RECEIPT DATED 05.01.2013 FOR PURCHASE OF 30000 EQUITY SHARES BY EXPRESSION DEALERS PVT. LTD. B. DELIVERY NOTE OF PHYSICAL SHARE CERTIFICATES DATED 05.10.2013 C. PHOTOCOPY OF SHARE CERTIFICATE BEARING NO.893 IN TH E NAME OF EXPRESSION DEALERS PVT. LTD. KOLKATA D. COPY OF SHARE CERTIFICATE- DULY ENDORSED IN THE NAM E OF ASSESSEE DATED 21.01.2013. E. PHOTOCOPY OF REQUEST FOR DEMATERIALIZATION OF SHARE S DATED 11.10.2014. F. COPY OF DEMAT STATEMENTS OF THE ASSESSEE MAINTAINED WITH M/S. INTEGRATED MASTER SECURITIES LTD. BEARING CLIE NT ID 10153638 OF THE ASSESSEE SHOWING THE SHARES WERE HE LD IN DEMAT FORM DELIVERED TO THE BROKER IN DEMANT FORM. G. COPY OF CONTACT NOTES ISSUED BY M/S. SOUTH ASIAN ST OCKS LTD. HAVING SEBI REGISTRATION OF INB010907336 /NSDL : IN- DP-NSDL-3742014 FOR SALE OF SHARES. PAGE | 3 H. COPY OF STATEMENT OF AFFAIRS OF THE ASSESSEE AS ON 31.03.2013 & 31.03.2014 I. COPY OF BANK ACCOUNT OF THE ASSESSEE WITH STATE BAN K OF INDIA, VARANASI REFLECTING THE PAYMENT RECEIVED FOR SALE OF SHARES. 4. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE ARGUMENTS ADVANCED BY THE ASSESSEE AND REJECTED THE CLAIM OF EXEMPTION U/S. 10 (38) OF THE ACT ON ACCOUNT OF PRO FIT FROM SALE OF SHARES OF THE PENNY STOCK COMPANY. RELYING ON VA RIOUS DECISIONS INCLUDING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. SUMATI DAYAL REPORTED IN 214 IT R 801 AND VARIOUS OTHER DECISIONS THE ASSESSING OFFICER TREAT ED SUCH INCOME AS INCOME FROM UNDISCLOSED SOURCES AND BROUG HT TO TAX THE SAME U/S. 68 R.W.S. 115 BBE. HE ACCORDINGLY DE TERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS.1,65,92,840/ -. 6. SINCE NON APPEARED ON BEHALF OF THE ASSESSEE DES PITE NUMBER OF OPPORTUNITIES GRANTED, THE LD. CIT(A) IN THE EXPARTE ORDER PASSED BY HIM UPHELD THE ACTION OF THE ASSESS ING OFFICER. 7. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT THE COMMISSIONER OF INCOME TAX (A) IS ERRE D UNDER LAW WHILE DISMISSING THE APPEAL OF THE APPELL ANT EXPARTE INSPITE OF THE FACT THAT THE APPELLANT WAS PREVENTED BY REASONABLE CAUSE IN NOT APPEARING ON T HE DATE FIXED FOR HEARING BY THE LD. CIT(A). 2. THE COMMISSIONER OF INCOME TAX (A) IS ERRED UNDE R THE LAW WHILE CONFIRMING ADDITION OFRS.1,52,50,975/ - PAGE | 4 MADE BY A.O. ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S. 68 R.W.S. 115 BBE OF THE ACT WITHOUT APPRECIATING T HE MATERIAL FACTS OF THE CASE. 3. THAT THE REJECTION OF THE CLAIM OF THE APPELLANT U/S. 10 (38) OF THE ACT BY THE A.O. AND UPHOLD BY CIT(A) IS ARBITRARY, ILLEGAL AND UNSUSTAINABLE UNDER THE LAW. 4. THAT ANY OTHER GROUNDS OF APPEAL MAY BE ADDED/ DELETED OR AMENDED AT THE TIME OF HEARING. 8. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS MADE THE ADDITION ON WRONG AP PRECIATION OF FACTS. DESPITE SPECIFIC REQUEST MADE BY THE ASS ESSEE DURING THE ASSESSMENT PROCEEDINGS, THE COPY OF THE INVESTI GATION REPORT WAS NEVER SUPPLIED TO THE ASSESSEE. FURTHER OPPORTU NITY OF CROSS-EXAMINATION WAS ALSO NOT GRANTED. HE SUBMITTE D THAT THE LD. CIT(A) HAS ALSO DECIDED THE ISSUE AGAINST THE A SSESSEE IN THE EXPARTE ORDER. REFERRING TO THE DECISION OF THE COO RDINATE BENCH OF THE TRIBUNAL IN THE CASE ARUN KUMAR BHAIYA VS. I TO VIDE ITA NO.2701/DEL./2018 ORDER DATED 30.08.2018 FOR A. Y. 2014-15 HE SUBMITTED THAT UNDER IDENTICAL CIRCUMSTANCES THE MATTER HAS BEEN RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. HE ACCORDINGLY SUBMITTED THAT IN THE INTEREST OF JUSTICE THE MATTER SHOULD BE RESTORED TO THE FILE O F THE ASSESSING OFFICER WITH A DIRECTION TO GRANT ONE MORE OPPORTUN ITY TO THE ASSESSEE TO SUBSTANTIATE HIS CASE. 9. THE LD. DR ON THE OTHER HAND SUBMITTED THAT THE INVESTIGATION REPORT IS A PUBLIC DOCUMENT AND CAN B E DOWNLOADED FROM THE WEBSITE AND THEREFORE, ASSESSEE CANNOT PAGE | 5 BLAME THE ASSESSING OFFICER FOR NON SUBMISSION OF T HE SAME. SO FAR AS THE ISSUE OF CROSS-EXAMINATION IS CONCERNED SHE SUBMITTED THAT THE REPORT WAS GIVEN BY THE INVESTIG ATION WING AFTER THOROUGH ENQUIRY AND IS NOT A RANDOM ENQUIRY. REFERRING TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF UDIT KALRA SHE SUBMITTED THAT THE HONBLE HIGH COURT HAS DECIDED THE ISSUE AGAINST THE ASSESSEE. SHE HOWEVER SUBMITT ED THAT SINCE THE LD. CIT(A) HAS PASSED THE EXPARTE ORDER, THEREFORE, SHE HAS NO OBJECTION IF THE MATTER IS RESTORED TO HIS F ILE FOR GRANTING AN OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE HIS CASE. 10. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS RELIED BY BOT H THE SIDES BEFORE US. WE FIND THE ASSESSING OFFICER ON THE BA SIS OF THE REPORT OF THE INVESTIGATION WING AND AFTER RECORDIN G THE STATEMENT OF THE ASSESSEE U/S. 131, REJECTED THE CL AIM OF EXEMPTION U/S. 10 (38) OF THE ACT. WE FIND THE LD. CIT(A) IN THE EXPARTE ORDER UPHELD THE ADDITION MADE BY THE ASSES SING OFFICER. IT IS THE SUBMISSION OF THE LD. COUNSEL F OR THE ASSESSEE THAT THE ASSESSING OFFICER HAS MADE THE ADDITION ON WRONG APPRECIATION OF FACTS AND HAS NOT GIVEN A COPY OF T HE REPORT OF THE INVESTIGATION WING NOR ALLOWED THE CROSS-EXAMIN ATION TO THE ASSESSEE. IT IS ALSO HIS SUBMISSION THAT SINCE THE LD. CIT(A) HAS DECIDED THE ISSUE EXPARTE, THEREFORE, THE ASSESSEE SHOULD BE GIVEN ONE MORE OPPORTUNITY TO SUBSTANTIATE HIS CASE . CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE A ND IN THE INTEREST OF JUSTICE WE DEEM IT PROPER TO RESTORE TH IS ISSUE TO THE PAGE | 6 FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO G RANT ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE HIS CAS E AND DECIDE THE ISSUE AS PER FACT AND LAW. WHILE DOING SO HE S HALL ALSO KEEP IN MIND THE LATEST DECISION OF HONBLE DELHI HIGH C OURT IN THE CASE OF UDIT KALRA. THE GROUNDS RAISED BY THE ASSES SEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 29.07.2019. SD/- SD/- (KULDIP SINGH) (R.K PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER *NEHA* DATE:- 29.07.2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 29.07.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER