Mrs Saroj Mittal, New Delhi V. ITO, New Delhi

ITA 865/DEL/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1190 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 22-10-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 09-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K CHAND
• Assessee Lawyers: K R MANJANI
• Keywords: Reopening of assessment; Unexplained cash credit; Cost of acquisition; Corroborative evidences; Non compliance
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G : NEW DELHI BEFORE SHRI RAJPAL YADAV, JM AND SHRI R.C.SHARMA, A M ITA NO.865/DEL/2009 ASSESSMENT YEAR : 2004-05 MRS.SAROJ MITTAL, C-2/10, ASHOK VIHAR PHASE-I, NEW DELHI 110 052. PAN NO.AAOPM4611P. VS. INCOME TAX OFFICER, WARD-19(2), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.R.MANJANI, ADVOCATE. RESPONDENT BY : SHRI N.K.CHAND, SR.DR. ORDER PER R.C.SHARMA, AM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 2.2.2009 FOR THE AY 2004-05, IN THE MATTER OF ORDER PASSED U/S 143(3)/147 OF THE IT ACT. 2. IN THE GROUNDS OF APPEAL, THE ASSESSEE IS AGGRIE VED BY THE REOPENING OF ASSESSMENT AS WELL AS MERIT OF THE ADDITION OF RS.3 ,50,000/- MADE U/S 68 OF THE IT ACT. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. FACTS IN BRIEF ARE THAT RETURN FILED BY THE ASSESSEE WAS ORIGINALLY PR OCESSED U/S 143(1), THEREAFTER ACTION WAS TAKEN U/S 147 OF THE IT ACT ON THE PLEA THAT ASSESSEE HAS TAKEN A BOGUS ACCOMMODATION ENTRY AMOUNTING TO RS.3,50,000/- DURI NG THE YEAR UNDER CONSIDERATION. THE AO OBSERVED THAT ASSESSEE HAD R ECEIVED AN AMOUNT OF RS.3,50,000/- FROM M/S PARIVARTAN CAPITAL & FINANCI AL SERVICES WHICH WAS ITA-865/DEL/2009 2 CREDITED IN HER BANK ACCOUNT NO.13331 MAINTAINED WI TH PUNJAB NATIONAL BANK, WAZIRPUR, DELHI. ACCORDINGLY, THE ASSESSEE WAS REQ UIRED TO EXPLAIN THE NATURE OF TRANSACTION AND PROVE GENUINENESS THEREOF. IN THIS REGARD, THE ASSESSEES COUNSEL VIDE LETTER DATED 20.12.2007 SUBMITTED HIS EXPLANAT ION WHICH IS REPRODUCED AS UNDER:- THE ASSESSEE HAS RECEIVED RS.3,50,000/- FROM M/S P ARIVARTAN FINANCE PVT.LTD. AS ADVANCE TOWARD SALE OF PROPERTY . IN SUPPORT OF OUR CONTENTION WE ARE ENCLOSING HEREWITH FOLLOWING DOCUMENTS:- A) COPY OF MEMORANDUM OF UNDERSTANDING FOR SALE OF PROPERTY DATED 26.6.2003. B) AFFIDAVIT FROM MR. DURGA PRASAD IN HIS CAPACITY OF DIRECTOR OF M/S PARIVARTAN CAPITAL & FINANCIAL SERVICES PVT. LTD. CONFIRMING THE PAYMENT OF RS.3,50,000/- AS ADVANCE AGAINST PRO PERTY AND SPECIFICALLY DENYING RECEIPT OF ANY CASH/COMMISSION AGAINST THIS PAYMENT. C) PHOTOCOPY OF CHEQUE OF RS.3,50,000/- SIGNED BY M R.DURGA PRASAD GIVEN TO THE ASSESSEE AS ADVANCE AGAINST PRO PERTY. D) COPY OF INCOME TAX RETURN ALONG WITH PAN CARD OF M/S PARIVARTAN CAPITAL & FINANCIAL SERVICES PVT.LTD. 4. FURTHER VIDE LETTER DATED 24.12.2007, THE SUBMIS SION OF THE ASSESSEE ON THIS ISSUE IS REPRODUCED AS UNDER:- FURTHER YOUR HONOUR HAS DIRECTED TO PHYSICALLY PRO DUCE SHRI DURGA DASS AUTHORIZED SIGNATORY/DIRECTOR OF M/S PARIVARTA N CAPITAL & FINANCIAL SERVICES PVT.LTD. YOUR HONOUR WILL APPRE CIATE THAT THE ASSESSEE HAS TAKEN RS.3,50,000/- AS ADVANCE TOWARDS SALE OF HER PROPERTY DURING THE YEAR UNDER REVIEW. WHICH SHE H AS NOT RETURN BACK DUE TO DEFAULT ON THE PART OF PARIVARTAN CAPIT AL & FINANCIAL SERVICES PVT.LTD. 5. THE AO DID NOT AGREE WITH THE ASSESSEES CONTENT ION WITH REGARD TO RECEIPT OF MONEY AS ADVANCE AGAINST SALE OF HER PROPERTY. HE TREATED THE SAME AS ITA-865/DEL/2009 3 UNEXPLAINED CREDIT IN THE BANK ACCOUNT AND ADDED TH E SAME IN THE ASSESSEES INCOME AND THE SAME WAS CONFIRMED BY THE CIT(A). 6. IT WAS CONTENDED BY LEARNED AR THAT AO HAS ACTED ON THE VAGUE INFORMATION SO RECEIVED FROM THE DDIT, NEW DELHI AN D THAT HE HAS ACTED WITHOUT VERIFYING THE CORRECTNESS OR OTHERWISE OF THE INFOR MATION WHILE RECORDING SATISFACTION BEFORE INITIATING THE PROCEEDINGS U/S 147. AS PER LEARNED AR, THERE WAS NO JUSTIFIABLE REASON FOR REOPENING THE ASSESSM ENT. ON MERIT, HE CONTENDED THAT ASSESSEE HAS RECEIVED RS.3,50,000/- AS ADVANCE FROM M/S PARIVARTAN CAPITAL & FINANCIAL SERVICES PVT.LTD. THROUGH MR.DURGA DASS W HO WAS SIGNATORY ON BEHALF OF M/S PARIVARTAN CAPITAL & FINANCIAL SERVICES PVT. LTD. AN AFFIDAVIT OF SHRI DURGA DASS WAS FILED WHEREIN HE HAS CONFIRMED PAYME NT OF RS.3,50,000/- AS ADVANCE AGAINST PURCHASE OF PROPERTY. THE ASSESSEE HAS ADJUSTED THE SAME U/S 51 OF THE IT ACT, WHICH WAS WRONGLY TREATED BY THE AO AS INCOME FROM OTHER SOURCES. 7. ON THE OTHER HAND, CONTENTION OF LEARNED DR WAS THAT THERE WAS INFORMATION BY THE INVESTIGATION WING TO THE EFFECT THAT BOGUS ACCOMMODATION ENTRY WAS PROVIDED TO THE ASSESSEE, ACCORDINGLY REASON WAS RE CORDED AND REOPENING WAS DONE VALIDLY. ON MERIT, HE CONTENDED THAT MERE IDENTIFI CATION OF THE CREDITOR AND SHOWING THE MOVEMENT OF MONEY THROUGH BANKING CHANN EL IS NOT SUFFICIENT TO PROVE THE GENUINENESS OF THE AMOUNT SO RECEIVED. A S PER LEARNED DR, EVEN FILING OF AFFIDAVIT IS NOT SUFFICIENT AS AFFIDAVIT IS NOT ADMISSIBLE EVIDENCE. IN VIEW OF THESE FACTS, HE CONTENDED THAT REVENUE AUTHORITIES HAVE CORRECTLY ADDED THE AMOUNT IN THE INCOME OF THE ASSESSEE. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND DEL IBERATED UPON THE CASE LAWS CITED BY THE LEARNED AR AND LEARNED DR. FROM THE RECORD WE FOUND THAT ASSESSEE WAS IN RECEIPT OF RS.3,50,000/- AS ADVANCE TOWARDS SALE OF PROPERTY FROM M/S PARIVARTAN CAPITAL & FINANCIAL SERVICES PVT.LTD . THROUGH SHRI DURGA DASS, ITA-865/DEL/2009 4 SIGNATORY ON BEHALF OF M/S PARIVARTAN CAPITAL & FIN ANCIAL SERVICES PVT.LTD. THE MEMORANDUM OF UNDERSTANDING FOR SALE OF PROPERTY DA TED 26.6.2003 WAS ENTERED INTO. AS THE BUYER OF THE PROPERTY COULD NOT MAKE THE BALANCE PAYMENT AND DID NOT COMPLY WITH THE TERMS OF THE AGREEMENT, THE ASS ESSEE FORFEITED THE SAME AND ACCOUNTED THE AMOUNT SO RECEIVED U/S 51 OF THE IT A CT, TO BE ADJUSTED AGAINST THE ORIGINAL COST OF ACQUISITION OF ASSETS. THE ASSESS EE HAD ALSO FILED AN AFFIDAVIT FROM SHRI DURGA DASS IN HIS CAPACITY AS DIRECTOR OF M/S PARIVARTAN CAPITAL & FINANCIAL SERVICES PVT.LTD. CONFIRMING THE PAYMENT OF RS.3,50 ,000/- AS ADVANCE AGAINST PURCHASE OF PROPERTY, WHEREIN HE HAS SPECIFICALLY D ENIED RECEIPT OF ANY CASH/COMMISSION AGAINST THIS PAYMENT. PHOTOCOPY OF CHEQUE OF RS.3,50,000/- GIVEN BY M/S PARIVARTAN CAPITAL & FINANCIAL SERVICE S PVT.LTD. DULY SIGNED BY SHRI DURGA DASS WAS FURNISHED BEFORE THE AO. WITHOUT CO NTROVERTING THE CONTENTS OF THE SWORN AFFIDAVIT, THE AO HAS DECLINED THE SAME B Y STATING THAT IT WAS A SELF SUPPORTING EVIDENCE AND HELD THAT AFFIDAVIT IS NOT EVIDENCE SINCE IT IS NOT INCLUDED IN THE DEFINITION OF EVIDENCE U/S 3 OF THE INDIAN E VIDENCE ACT, 1872. THE ONLY GROUND BEFORE THE AO FOR REOPENING THE ASSESSMENT W AS INFORMATION RECEIVED FROM DIT(INV.) AND RELYING UPON THE STATEMENT OF ON E SHRI HARI OM BANSAL RECORDED BY THE INVESTIGATION WING. ON PERUSAL OF THE STATEMENT SO RECORDED, WE FOUND THAT THE STATEMENT OF SHRI HARI OM BANSAL IS GENERAL, NOWHERE IN THE STATEMENT SHRI BANSAL HAD MENTIONED THE NAMES OF TH E BENEFICIARIES MUCH LESS THE NAME OF THE ASSESSEE. THERE IS NO WHISPER OF SHRI DURGA DASS WHO HAD ENTERED INTO AGREEMENT WITH THE ASSESSEE FOR PURCHASE OF TH E FLAT AT DWARKA. BEFORE THE AO, THE ASSESSEE VIDE LETTER DATED 13.12.2007 SPECI FICALLY REQUESTED THE AO TO PRODUCE SHRI HARI OM BANSAL FOR CROSS EXAMINATION O N WHOSE STATEMENT THIS ALLEGATION HAD BEEN LEVIED AGAINST THE ASSESSEE, BU T THE AO COULD NOT PRODUCE SHRI BANSAL FOR CROSS EXAMINATION. 9. IN VIEW OF THE ABOVE OVERWHELMING EVIDENCES, WE DO NOT FIND ANY MERIT IN THE ACTION OF THE LOWER AUTHORITIES FOR MAKING ADDI TION IN THE HANDS OF THE ASSESSEE ITA-865/DEL/2009 5 ON ACCOUNT OF ADVANCE RECEIVED AGAINST SALE OF HOUS E, WHICH WAS FORFEITED FOR NON COMPLIANCE OF THE TERMS OF THE AGREEMENT, AND WHICH WAS ADJUSTED AGAINST THE COST OF ACQUISITION OF THE HOUSE PROPOSED TO BE SOLD, U/ S 51 OF THE IT ACT. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 30 TH OCTOBER, 2009. SD/- SD/- (RAJPAL YADAV) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30.10.2009. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR ITA-865/DEL/2009 6