ITO, New Delhi V. M/s Prompt Buildcap (P) Ltd., New Delhi

ITA 68/DEL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86971 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 17-02-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 06-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MISHRA
• Assessee Lawyers: VIKRAM SAHAY
• Keywords: Additional evidence; Accommodation entries

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL IN (DELHI BENCH F NEW DELHI) BEFORE SHRI B.C.MEENA, ACCOUNTANT MEMBER AND SHRI C.M.GARG, JUDICIAL MEMBER ITA NO. 68/DEL/2011 (ASSESSMENT YEAR: 2002-03) ITO VS. PROM PT BUILDCAP (P) LTD. WARD 14(4), F-22. FIRST FLOOR, C.R.BUILDING, I.P.ESTATE GEETA NJALI ENCLAVE NEW DELHI NEW DELHI PAN : AAACP8669D (APPLICANT) (RESPONDENT) ASSESSEE BY : SH. VIKRAM SAHAY, SR. DR. REVENUE BY : SHRI P.K. MISHRA, CA DATE OF HEARING : 17.02.2015 DATE OF PRONOUNCEMENT : 25.02.2015 ORDER PER C.M.GARG, JUDICIAL MEMBER : THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE AGA INST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) XVII DATED 29.10.2010 IN APPEAL NO. 188 / CIT(A) XVII/ DEL/ 2 009-10 FOR ASSESSMENT YEAR 2002-03. ITA NO. 68/ DEL/2011 2 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS IN THIS APPEAL :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 52,54,284/- MADE BY THE AO ON ACCOUNT OF ACCOMMODAT ION ENTRIES RECEIVED DURING THE YEAR FROM M/S JRD STO CK BROCKER PVT. LTD. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN IGNORING THE FACT THAT THE ASSESSEE HAD INTRODUCED UNACCOUNTED MONEY IN THE BOOKS OF ACCOUNTS WITH THE HELP OF ACCOMMODATION ENTRY PROVI DERS WHICH HAS BEEN EXPOSED BY DEEP AND DETAILED INVESTIGATION CARRIED OUT BY THE INVESTIGATION WING OF THE DEPARTMENT. 3. THAT THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) FAILED TO APPRECIATE THE FACTS THAT THE ASSESSEE WAS UNCOOPERATIVE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND DID NOT PRODUCE THE DIRECTOR OF M/S , J R D STOCK BROCKERS PVT. LTD. AND ALSO THE BANK ACCOUNT OF THIS COMPANY AND THEREFORE THE A O HAD TO COMPLETE THE O RDER ON THE BASIS OF THE INFORMATION AVAILABLE WITH THE INVESTIGATION WING. 3. BRIEFLY STATED THE FACTS GIVING RISE TO THI S APPEAL ARE THAT THE ASSESSING OFFICER ASKED THE ASSESSEE TO FILE THE DE TAILS OF SALE AND PURCHASE OF SHARES ALONG WITH CONFIRM COPY OF ACCOU NT OF BROKER AND THE COPY OF BANK STATEMENT. THE AO ALSO ASKED THE ASSESSEE TO RECONCILE THE COPY OF ACCOUNT OF SALE AND PURCHASE OF SHARES AND COMPLETE COPY OF ACCOUNT OF J R D STOCK BROCKERS FR OM WHERE THE ASSESSEE HAS TAKEN ACCOMMODATION ENTRY AND THE COPY OF ACCOUNT OF ITA NO. 68/ DEL/2011 3 VAISH COOPERATIVE BANK, KAMLA NAGAR FROM ENTRY HAS BEEN RECEIVED BY THE ASSESSEE AND COPY OF STATEMENT OF AVN AMRO B ANK IN WHICH THE AMOUNT HAS BEEN DEPOSITED. THE ASSESSING OFFICE R NOTED THAT THE ASSESSEE HAD NOT FILED THE COPY OF ACCOUNT OF J R D STOCK BROKERS AND THEIR BANK STATEMENT. THE AO AFTER EXAMINE THE EXPLANATION AND DETAILS SUBMITTED BY THE ASSESSEE CONCLUDED THAT TH ERE WAS AN ARRANGEMENT BETWEEN THE ASSESSEE AND M/S J R D STOC K BROKERS PVT. LTD. TO TAKE ENTRY FROM A BOGUS CONCERN AND TH E ASSESSEE MADE CASH PAYMENT TO THE SAID BROKER AND IN TURN THE ASS ESSEE RECEIVED CHEQUE FROM SUCH ENTRY PROVIDER. THE AO TREATED THE ENTIRE AMOUNT OF RS. 52,54,284/- THE INCOME OF THE ASSESSEE AND THE SAME WAS ADDED TO THE RETURN INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 4. THE ASSESSEE PREFERRED AN APPEAL BEFORE CI T(A) WHICH WAS ALLOWED GRANTING RELIEF FOR THE ASSESSEE ON THIS IS SUE. NOW, THE REVENUE IS BEFORE THIS TRIBUNAL ON THIS ISSUE WITH THE GROUNDS HAS REPRODUCED ABOVE. ITA NO. 68/ DEL/2011 4 5. APROPOS, GROUND NO. 1, 2 & 3 OF THE REVENUE, T HE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT THE CIT(A) ERRED IN DELETING MADE BY THE AO ON ACCOUNT OF ACCOMMODATION ENTRIES RECEIVED DURING THE YEAR BY THE ASSESSEE FROM M/S J R D STOCK BROKERS PVT. LTD. THE LD. DR , FURTHER, CONTENDED T HAT THE FIRST APPELLATE AUTHORITY IGNORED THE FACT THAT THE ASSE SSEE HAD INTRODUCED ITS OWN UNACCOUNTED MONEY IN THE BOOK OF ACCOUNTS W ITH THE HELP OF ACCOMMODATION ENTRY PROVIDERS WHICH HAS BEEN EXPOSE D BY DEEP AND DETAILED INVESTIGATION CARRIED OUT BY THE INVES TIGATION WING OF THE DEPARTMENT. THE LD. DR ALSO CONTENDED THAT THE CIT( A) FAIL TO APPRECIATE THE RELEVANT FACT THAT THE ASSESSEE WAS NOT COOPERATING DURING THE ASSESSMENT PROCEEDINGS AND DID NOT PRODU CE THE DIRECTOR OF M/S J R D STOCK BROKERS PVT. LTD. AND THEIR STAT EMENT OF BANK ACCOUNTS WITH THE ASSESSEE COMPANY. THEREFORE, THE ASSESSING OFFICER WAS QUITE JUSTIFIED IN COMPLETING THE ASSES SMENT AND MAKING THE ADDITION ON THE BASIS OF THE INFORMATION AVAILA BLE BEFORE HIM WHICH WAS RECEIVED FROM THE INVESTIGATION WING. ITA NO. 68/ DEL/2011 5 6. REPLYING TO THE ABOVE, THE LD. ASSESSEES REPRESENTATIVE (AR) CONTENDED THAT THE ASSESSEE SUBMITTED ALL REQUIRED DETAILS WHICH WERE AVAILABLE WITH IT DURING THE ASSESSMENT PROCEE DINGS EXCEPT SOME BANK STATEMENTS WHICH WERE ALSO SUBMITTED DURI NG FIRST APPELLATE PROCEEDINGS AS ADDITIONAL EVIDENCE. THE L D. AR, FURTHER, CONTENDED THAT THE CIT(A) ASKED THE AO TO SUBMIT R EMAND REPORT AND COMMENTS ON THE ADDITIONAL EVIDENCE AND THE ASS ESSING OFFICER DID NOT MADE ANY ADVERSE COMMENT THEREFORE, THE SA ME WAS RIGHTLY ADMITTED AND CONSIDERED BY THE CIT(A) WHILE ALLOWIN G APPEAL OF THE ASSESSEE. SUPPORTING THE IMPUGNED ORDER THE LD. AR VEHEMENTLY CONTENDED THAT WHILE THE AO COULD NOT BRING ANY POS ITIVE EVIDENCE ON THE RECORD TO SUBSTANTIATE HIS CONCLUSION AND THE D IRECTOR OF M/S J R D STOCK BROKER PVT. LTD. IN HIS STATEMENT RECORDED ON OATH BY THE AO HAS CONFIRMED THE TRANSACTION ENTERED INTO BY THE A SSESSEE THEN THE BASELESS ADDITION MADE BY THE AO CANNOT BE SUSTAINE D. 7. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIO NS AND PERUSAL OF THE RECORD PLACED BEFORE US, INTER ALIA, ASSESSMENT ORDER, IMPUGNED ORDER, REMAND REPORT AND OTHER RELEVANT DOCUMENTS A T THE OUTSET WE ITA NO. 68/ DEL/2011 6 NOTE THAT DURING THE ASSESSMENT PROCEEDINGS THE ASS ESSEE COULD NOT PRODUCE DIRECTOR OF M/S J R D STOCK BROKER PVT. LTD ., BUT DURING REMAND PROCEEDINGS THE AO RECORDED THE STATEMENT O F DIRECTOR SHRI ASHOK GUPTA ON OATH, WHO SUPPORTED THE TRANSACTION . WE ALSO NOTE THAT THE ASSESSING OFFICER ALSO FOUND HIMSELF SATIS FIED ABOUT THE EXPLANATION OF THE ASSESSEE THAT THE DIRECTOR SHRI ASHOK GUPTA AND SMT. NILIMA GUPTA WERE OUT OF INDIA FROM 20.12.2009 TO 08.02.2010. WE ALSO NOTE THAT DURING THE ASSESSMENT PROCEEDIN GS REQUIRED BANK STATEMENT WAS AND THE CONFIRMED COPY OF ACCOUNT OF J R D STOCK BROKERS PVT. LTD. WITH THE ASSESSEE FOR A. Y. 2002- 03 WAS ALSO SUBMITTED BY THE DIRECTOR SHRI ASHOK GUPTA BEFORE T HE AO DURING REMAND PROCEEDINGS EFFECTIVELY SUBSTANTIATING AND C ONFIRMING THE TRANSACTIONS EFFECTED DURING THE FINANCIAL YEAR REL EVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION WITH THE ASSES SEE. FROM THE OPERATIVE PARA 3.3. AT PAGE 9 OF THE IMPUGNED ORDER , WE OBSERVE THAT THE CIT(A), AFTER CONSIDERING THE REMAND REPORT, G RANTED RELIEF FOR THE ASSESSEE WITH FOLLOWING FINDINGS AND CONCLUSION : 3.3. I HAVE CAREFULLY CONSIDERED THE SUBMI SSIONS OF LD. AR, ASSESSMENT ORDER AND REMAND REPORT OF THE AO. I T IS SEEN THAT THE AO MADE ADDITION ON THE GROUND THAT T HE ITA NO. 68/ DEL/2011 7 APPELLANT HAS TAKEN ENTRY FROM M/S J R D ST OCK BROKERS (P) LTD. HOWEVER, THE AO COULD NOT BRING ANY POSITI VE EVIDENCE ON THE RECORD TO SUBSTANTIATE HIS CONCLUSI ONS. ON THE CONTRARY THE DIRECTOR OF M/S JRD STOCK BROKERS (P) LTD. IN HIS STATEMENT RECORDED ON OATH BY THE AO HAS CON FIRMED THE TRANSACTION ENTERED INTO BY THE APPELLANT. HE H AS ALSO SUBMITTED THE COPY OF THE ACCOUNT OF APPELLANT AND COPY OF CONTRACT NOTE AND BILLS IN RESPECT OF SALE AND PURC HASE OF THE SHARES. IN VIEW OF THE ABOVE FACTS, I AM OF THE VIEW THAT THE ADDITION MADE BY THE AO CANNOT BE SUSTAINED. THEREFORE, THE ADDITION MADE BY THE AO IS DELETED. THIS GROUND OF APPEAL IS ALLOWED. 8. IN VIEW OF ABOVE AND IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE ARE OF THE CONSIDERED OPINION THAT THE CIT(A) GRANTED RELIEF FOR THE ASSESSEE ON JUSTIFIED AND CO GENT REASONS. THE ASSESSING OFFICER MADE ADDITION ON INFORMATION OF I NVESTIGATION WING BUT THE AO COULD NOT BRING ANY POSITIVE OR SUSTAINA BLE EVIDENCE OR ANY OTHER ADVERSE MATERIAL ON THE RECORD TO SUBSTAN TIATE HIS CONCLUSIONS. PER CONTRA, THE ASSESSING OFFICER RECO RDED STATEMENT OF SH. ASHOK GUPTA, THE DIRECTOR OF THE J.R.D. STOCK B ROKER WHO CONFIRMED THE TRANSACTION SUPPORTING THE VERIFIED COPY OF ACCOUNT WITH THE ASSESSEE. IN VIEW OF ABOVE STATED FACTS AN D CIRCUMSTANCES, WE REACH TO THE CONCLUSION AND THE ADDITION MADE BY THE AO WAS NOT SUSTAINABLE WHICH WAS RIGHTLY DELETED BY THE CIT(A) DURING FIRST ITA NO. 68/ DEL/2011 8 APPELLATE PROCEEDINGS. WE ARE UNABLE TO SEE ANY INF IRMITY OR ANY OTHER VALID REASON TO INTERFERE WITH THE IMPUGNED ORDER AND THUS, WE UPHELD THE SAME. 9. IN THE RESULT GROUND NO. 1, 2 AND 3 OF THE REVENUE BEING DEVOID OF MERITS ARE DISMISSED. FINALLY, APPEAL OF THE RE VENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 25 TH FEBRUARY, 2015. SD/- SD/- (B.C. MEENA) (C.M.GARG) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED 25 TH FEB. 2015 B.RUKHAIYAR COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT (ITAT), NEW DELHI. AR, ITAT N. DELHI ITA NO. 68/ DEL/2011 9 SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 24.02.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 24.02.2015 3. DRAFT PLACED BEFORE THE SECOND MEMBER 24.02.2015 4. DRAFT APPROVED BY THE SECOND MEMBER 24.02.2015 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 24.02.2015 6. DATE OF PRONOUNCEMENT OF ORDER 25.02.2015 7. DATE OF FILE SENT TO THE BENCH CLERK 25.02.2015 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER ITA NO. 68/ DEL/2011 10