Addl. CIT, Range- 36, New Delhi V. Parmanand Malani, New Delhi

ITA 7859/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8547 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2014-2015
• Appeal Filed On: 29-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHARAT B GARG
• Keywords: Capital Gains
• Section: 131; 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI F BEN CH, NEW DELHI (THROUGH VIDEO CONFERENCING] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND MS. MADHUMITA ROY, JUDICIAL MEMBER ITA NO. 7859/DEL/2017 [A.Y 2014-15] THE A. C.I.T VS. SHRI PARMANAND MALANI CIRCLE 36(1) 57, STATE BANK COLONY NEW DELHI G.T KARNAL ROAD, DELHI PAN : AAFPM 2920 E [APPELLANT] [RESPONDENT] DATE OF HEARING : 12.08.2021 DATE OF PRONOUNCEMENT : 12.08.2021 ASSESSEE BY : SHRI SANDEEP VIJH, CA REVENUE BY : SHRI BHARAT B. GARG, S R. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] - 12 NEW DELHI DATED 22.09.2017 PERTAINING TO ASSESSMENT YEAR 2014-15 . 2 2. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT TH E LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 4,37,50,000/- MADE ON ACCOUNT OF UNSECURED LOANS. 3. REPRESENTATIVES OF BOTH THE SIDES WERE HEARD AT LENGTH. CASE RECORDS CAREFULLY PERUSED. 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT D URING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE HAS SHOWN UNSECURED LOANS AMOUNTING TO RS. 5,95,49,722/- DURING THE YEAR UNDER CONSIDERATION OUT OF LOANS AM OUNTING TO RS. 4,37,50,000/-. 5. THE ASSESSEE WAS ASKED TO EXPLAIN THE TRANSACTIO N IN LIGHT OF PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT, 196 1 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT]. 6. THE ASSESSEE FILED DETAILED REPLY ALONGWITH CONF IRMATION, COPY OF INCOME TAX RETURN AND BANK STATEMENT. THE ASSESSEE HAS TAKEN UNSECURED LOAN FROM THE FOLLOWING PARTIES: 3 S.NO. NAME OF THE LENDER LOAN TAKEN DURING THE YEAR (IN RS.) SOURCE OF INCOME 1 ANJALI MALANI 5000000 CAPITAL GAIN &INTERST INCOME 2 RAMANAND MALANI 10600000 CAPITAL GAIN & INTEREST INCOME 3 MAMTA MALANI 19550000 CAPITAL GAIN &INTEREST INCOME 4 VIJAY LAXMI MALANI 4600000 CAPITAL GAIN & INTERST INCOME 5 KAILASH MALANI 4000000 CAPITAL GAIN & INTEREST INCOME TOTAL 4,37,50,000 7. AFTER PERUSING THE DETAILED SUBMISSIONS MADE BY THE ASSESSEE, OBSERVATIONS OF THE ASSESSING OFFICER ARE AS UNDER: 1. ANJALI MALANI - THE ASSESSEE SUBMITTED COPY OF T HE INCOME TAX RETURN AND BANK STATEMENT. THE LENDER RECEIVED THE MONEY FROM THE SALE OF SHARES OF M/S DHAN LEELA INVESTMEN T & TRADING COMPANY PVT. LTD., A PENNY STOCK COMPANY. SHE DID N OT APPEAR IN RESPONSE TO A SUMMONS ISSUED U/S 131 OF THE I.T. AC T. THE ASSESSING OFFICER OBSERVED THAT IT WAS A FACT THAT THE BLACK MONEY OF THE ASSESSEE ROUTED THROUGH THE FAMILY MEM BERS. 2. RAMANAND MALANI - THE ASSESSING OFFICER HAS GIVE N SIMILAR OBSERVATIONS AS GIVEN IN THE CASE OF MS. ANJALI MAL ANI, IN RESPECT OF LOANS AMOUNTING TO RS. 1,06,00,000/- TAKEN FROM THI S LENDER 3. MAMTA MALANI - THE APPELLANT HAS SHOWN LOAN OF R S. 1,95,50,000/- FROM THIS LENDER WHO IS ALSO ONE OF T HE RELATIVES. THE ASSESSING OFFICER HAS GIVEN SIMILAR OBSERVATIONS WI TH RESPECT TO THIS TRANSACTION AS IN THE CASE OF MS. ANJALI MALAN I. 4 4. VIJAY LAXMI MALANI - THE ASSESSEE HAS SHOWN LOAN OF RS.46,00,000/- FROM THIS LENDER. THE OBSERVATIONS O F THE ASSESSING OFFICER IN RESPECT OF MS. VIJAY LAXMI MAL ANI ARE SIMILAR TO ONE GIVEN IN THE CASE OF MS. ANJALI MALANI. 5. KAILASH MALANI - THE APPELLANT HAS SHOWN UNSECUR ED LOANS OF RS.40,00,000/- FROM SH. KAILASH MALANI. HE IS ALSO A RELATIVE. THE ASSESSING OFFICERS OBSERVATIONS ARE SIMILAR TO THA T GIVEN IN THE CASE OF MS. ANJALI MALANI. SH. KAILASH MALANI APPEA RED THE BUSINESS OR THE REASON FOR MAKING THE IN' COMPANY WHOSE SHAR ES WERE TRADED AT RS.3.4 PER SHARE. 8. AFTER REFERRING TO VARIOUS JUDICIAL DECISIONS, T HE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE ASSESSEE HAS NOT DI SCHARGED THE ONUS CAST UPON HIM U/S 68 OF THE ACT AND CONCLUDED THE A SSESSMENT PROCEEDINGS AFTER MAKING ADDITION OF RS. 4,37,50,00 0/-. 9. ASSESSMENT WAS ASSAILED BEFORE THE LD. CIT(A) AN D IT WAS VEHEMENTLY CONTENDED THAT THE ASSESSING OFFICER HAS NOT MADE ANY ADVERSE COMMENTS ON THE DOCUMENTS FILED BY THE ASSE SSEE. IT WAS EXPLAINED TO THE LD. CIT(A) THAT THE LOANS HAVE BEE N ADVANCED THROUGH BANKING CHANNEL AND THE LOAN CREDITORS HAD SUFFICIE NT BALANCE IN THEIR RESPECTIVE BANK ACCOUNTS DULY REFLECTED IN THE BANK STATEMENTS FILED 5 BY THE ASSESSEE. IT WAS ALSO CONTENDED THAT ALL TH E LOAN CREDITORS ARE ASSESSED TO TAX FROM PAST MANY YEARS. 10. AFTER CONSIDERING THE SUBMISSIONS AND EVIDENCES FILED BY THE ASSESSEE, THE LD. CIT(A) WAS CONVINCED THAT THE ASS ESSEE HAS DISCHARGED THE ONUS CAST UPON HIM BY PROVISIONS OF SECTION 68 OF THE ACT AND DELETED THE ADDITION. 11. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE ASSESSING OFFICER WAS OF THE FIRM BELIEF THAT THE LOAN CREDITORS HAVE GIVEN LOANS FROM THE CAPITAL GAINS D ERIVED FROM SALE OF PENNY STOCK OF M/S DHAN LEELA INVESTMENT & TRADING CO. LTD. WE FURTHER FIND THAT IN SAME SHARE, THE ASSESSEE HAS A LSO SHOWN LONG TERM CAPITAL GAIN OF RS. 2,02,40,377/- WHICH WAS DISALLO WED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A). HOWEVER, WE FIND THAT THE QUARREL RELATING TO THE CAPITAL GAINS DERIVED BY TH E ASSESSEE HAS BEEN SETTLED UNDER THE VIVAD SE VISHWAS SCHEME, 2020. 12. WE FIND THAT SIMILAR DISALLOWANCES WERE MADE IN THE HANDS OF THE FAMILY MEMBER OF THE ASSESSEE WHO CLAIMED TO HAVE E ARNED LONG TERM CAPITAL GAIN FROM SALE OF SHARES OF M/S DHAN LEELA INVESTMENT & 6 TRADING CO. LTD AND IN ALL SUCH CASES, THE QUARREL HAS BEEN SETTLED UNDER VIVAD SE VISHWAS SCHEME, 2020, 13. COMING TO THE FACTS OF THE FIVE LOAN CREDITORS, WE FIND THAT EACH LOAN CREDITOR HAD SHOWN HIS/HER SOURCE OF INCOME BE ING CAPITAL GAIN FROM SALE OF SHARES OF M/S DHAN LEELA INVESTMENT & TRADING CO. LTD. WE HAVE BEEN INFORMED THAT THE ASSESSING OFFICER OF THE DEPOSITORS HAVE ADDED INCOME RECEIVED FROM SALE OF SHARES OF M /S DHAN LEELA INVESTMENT & TRADING CO. LTD WHICH IN ITSELF PROVES THE SOURCE OF THE FIVE DEPOSITORS WHO HAVE LENDED THE MONEY TO THE AS SESSEE. 14. ONCE THE SOURCE OF THE FIVE LOAN CREDITORS HAS BEEN ESTABLISHED, THERE SHOULD REMAIN NO ALLEGATION ON THE ASSESSEE W ITHIN THE FOUR WALLS OF SECTION 68 OF THE ACT. IN OUR CONSIDERED VIEW, T HE ASSESSEE HAS SUCCESSFULLY EXPLAINED/PROVED THE IDENTITY, GENUINE NESS OF THE TRANSACTION AND THE CAPACITY OF THE DEPOSITORS AND HAS SUCCESSFULLY DISCHARGED THE INITIAL ONUS CAST UPON HIM BY PROVIS IONS OF SECTION 68 OF THE ACT. WE, THEREFORE, DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 7 15. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IN ITA NO. 7859/DEL/2017 IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 12.08. 2021 IN THE PRESENCE OF BOTH THE RIVAL REPRESENTATIVES. SD/- SD/- [ MADHUMITA ROY ] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 12 TH AUGUST, 2021 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI 8 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING 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 WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER