ADDL CIT RG 24(2), MUMBAI V. NITI BAGADIA, MUMBAI

ITA 7227/MUM/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79404 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 08-07-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 21-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SA RAD PATEL
• Keywords: Additional evidence

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO.7227/MUM/2010, A.Y. 2006-07 THE DCIT 24(2), ROOM NO.601, 6 TH FLOOR, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI 400051 (APPELLANT ) VS. MS. NITI BAGAIDA, 3-B/104, MUKTANGAN, UPPER GOVIND NAGAR, KAISASPURI ROAD, MALAD (E), MUMBAI- 400097 PAN :AGAPB 5149D (RESPONDENT) APPELLANT BY : SHRI MAURYA PRATAP RESPONDENT BY : SHRI SA RAD PATEL DATE OF HEARING : 09/07/20 14 DATE OF PRONOUNCEMENT : 09/07/2014 ORDER PER I.P.BANSAL, J.M, THIS IS AN APPEAL FILED BY THE REVENUE AND IT IS D IRECTED AGAINST THE ORDER PASSED BY LD. CIT(A)-34, MUMBAI DATED 24/08/2010 FO R ASSESSMENT YEAR 2006- 07. GROUNDS OF APPEAL READ AS UNDER: 1.WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING RELIEF OF RS.16,23,463/- O N THE PROBABILITY OF WRONG PUNCHING OF SALES BY THE BROKER EMPLOYEE IN THE ASS ESSEES ACCOUNT, IGNORING THE FACTS OF THE CASE THAT THE ASSESSEE HAS NOT PRODUCE D ANY EVIDENCE IN SUPPORT OF HER CLAIM. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A ) ON THE GROUND BE SET ASIDE AND MATTER MAY BE DECIDED ACCORDING TO LAW. THE APPELL ANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD NEW GROUND WHICH MAY BE NE CESSARY. 2. IN PURSUANCE OF CERTAIN INFORMATION CALLED FOR B Y THE A.O FROM BSE AND NSE. IT WAS FOUND THAT WITH RESPECT TO TRANSACTIO NS OF THE ASSESSEE THROUGH ITA NO.7227/MUM/2010, A.Y. 2006-07 2 BONANZA PORTFOLIO LTD., THERE WAS DIFFERENCE IN THE TRANSACTION TO THE TUNE OF RS.74,34,453/- AND THE SAID AMOUNT WAS ADDED TO TH E INCOME OF THE ASSESSEE. BEFORE LD. CIT(A) CERTAIN ADDITIONAL EVIDENCES WERE FILED AND LD. CIT(A) CALLED FOR REMAND REPORT FROM AO ON THESE ADDITIONAL EVIDENCE S. THE AO SUBMITTED THE REMAND REPORT AND ACCEPTED THAT EXCEPT TRANSACTION OF RS.16,23,463/- THE ASSESSEE HAS RECONCILED THE DIFFERENCE. SO FAR AS IT RELATES TO AMOUNT OF RS.16,23,463/- THE REMAND REPORTED SUBMITTED BY THE AO HAS BEEN REPRODUCED IN THE ORDER OF LD. CIT(A) AND THE SAME READ AS UN DER: PUNCHING/HUMAN CLERICAL ERROR BY BROKERS EMPLOYEE S RESULTING INTO REDUCED TURNOVER OF RS.1 6,23,463/- MANY TIMES WRONG PUNCHING OF ASSESSEE CODE HAD TAK EN PLACE BY THE BROKERS STAFF. ON PREPARATION OF BILLS, THE BROKERS RECTIFY SUCH E RROR INTERNALLY BY ENTERING CORRECT CLIENTS CODE. WHEREAS, THE BSE/NSE DATA WILL REFLEC T THE CODE PUNCHED ORIGINALLY. THIS FACT HAS RESULTED INTO THE DIFFERENCE BETWEEN TURNOVER AS PER BOOKS OF ASSESSEE AND TURNOVER OF BSE/NSE DATASHEETS. THE ASSESSEE REPRESENTED THAT DURING STRESSFUL HOURS OF TRADING ON BOLT AND FLOW OF INST RUCTIONS FROM DIFFERENT CLIENTS, THE CONCENTRATION OF EMPLOYEES OF BROKER GET DISTURBED AND RESULTS INTO WRONG PUNCHING. THE ASSESSEE, FURTHER REPRESENTED THAT THE MATERIAL ITY OF SUCH HUMAN ERROR IS HARDLY 0.17% OF TOTAL TRADE VOLUME OF APPELLANT. RS.940 CR ORES. THEREFORE, SUCH ERROR BEING QUITE PROBABLE MUST BE DISREGARDED. IN SUPPORT OF HIS SUBMISSIONS THE AUTHORIZED REPRESENTATIVE SUBMITTED A SAMPLE LETTER DATED 13/0 3/2010 FROM HIS BROKER M/S. BONANZA PORTFOLIO LTD., CONFIRMING THE POSSIBILITY OF ERRORS. EVEN, THE DISREGARD OF THIS TURNOVER RESULTS INTO IRRATIONAL STOCK POSITIO N EITHER AS EXCESS STOCK OR LESSER STOCK THEN ACTUAL STOCK. I HAVE VERIFIED ALL BILLS OF BROKERS AND FOUND NET TURNOVER OF RS.16,23,463/- IN EXCESS AS COMPARED TO NET TURNOVE R AS PER BSE/NSE EXCHANGE DATA SHEET. THE ALLOWANCE OF THIS TURNOVER BE DECID ED ON MERITS. AFTER GOING THROUGH AFOREMENTIONED REMAND REPORT O F A.O, LD. CIT(A) HAS CONCLUDED THAT THERE WAS NO JUSTIFICATION IN MAKIN G SUCH ADDITION AS THE DIFFERENCE IS ATTRIBUTABLE TO PUNCHING/HUMAN ERROR BY BROKERS EMPLOYEES AND DURING THE REMAND PROCEEDINGS THE AO DID NOT FIND T HAT THE EXPLANATION OF THE ASSESSEE AND THE CERTIFICATE GIVEN BY THE PARTY REG ARDING PUNCHING/HUMAN CLERICAL ERROR OF BROKERS EMPLOYEES IS WRONG OR ADV ANCED WITH A VIEW TO DEFRAUD THE REVENUE. ITA NO.7227/MUM/2010, A.Y. 2006-07 3 3. ON AFOREMENTIONED FACTS, WHICH ARE NOT DISPUTED, WE HAVE HEARD BOTH THE PARTIES. AFTER CONSIDERING THEIR SUBMISSIONS AND T HE FINDINGS RECORDED BY LD. CIT(A) AND ALSO AFTER GOING THROUGH RELEVANT PORTI ON OF THE REMAND REPORT, WHICH IS REPRODUCED ABOVE, WE ARE OF THE OPINION THAT THE ASSESSEE WAS ABLE TO EXPLAIN THAT THIS DIFFERENCE WAS DUE TO PUNCHING ERROR BY BROKERS EMPLOYEES AND FROM THE DETAILS SUBMITTED BY THE ASSESSEE AND THE CERT IFICATE GIVEN BY M/S.BONANZA PORTFOLIO LTD., THE AO COULD NOT FIND ANY DISCREPAN CY. THEREFORE, WE ARE OF THE OPINION THAT LD. CIT(A) DID NOT COMMIT ANY ERROR IN DELETING THE ADDITION OF RS.16,23,463/-. WE DECLINE TO INTERFERE AND DISMIS S THE DEPARTMENTAL APPEAL. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09/07/2014 ! ' #$ % &'( 09/07/2014 ' ) SD/- SD/- ( /SANJAY ARORA ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; &' DATED 09/07/2014 ! ! ! ! ' '' ' *+, *+, *+, *+, -,$+ -,$+ -,$+ -,$+ / COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. *0./ / THE RESPONDENT. 3. 1 ( ) / THE CIT(A)- 4. 1 / CIT 5. ,2) *+' , , / DR, ITAT, MUMBAI 6. )3 4 / GUARD FILE. !' !' !' !' / BY ORDER, 0,+ *+ //TRUE COPY// 5 55 5 / 6 6 6 6 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ' . ./ VM , SR. PS