Dy.CIT.-Circle-1, Agra V. Sh. Ram Saran Mittal, Agra

ITA 90/AGR/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0420 (ITAT-AGRA)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 16-09-2010
• Assessment Year: 1999-2000
• Appeal Filed On: 07-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMPOORNANAND
• Assessee Lawyers: SAHIB P SANTSANGEE
• Keywords: Unexplained cash credit; Share purchase agreement; Source of fund; Assessment record
• Section: 133(6); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH : AGRA BEFORE SHRI R.K. GUPTA, J. M. AND SHRI P.K. BANSAL, A.M. PAN NO. ABLPM 281 M I.T.A.NO . 90/AGR/2010 A. Y. 1999-2000 DY. CIT, SHRI RAM SARAN MITTAL, CIRCLE 1, VS. 62B, NEHRU NAGAR, AGRA AGRA APPELLANT RESPONDENT C.O.NO . 28/AGR/2010 A. Y. 1999-2000 SHRI RAM SARAN MITTAL, DY. CIT, 62B, NEHRU NAGAR, VS. CIRCLE 1, AGRA AGRA CROSS OBJECTOR RESPONDENT DEPARTMENT BY : SHRI SAMPOORNANAND, JR.DR ASSESSEE BY : SAHIB P. SANTSANGEE, C. A. O R D E R PER R.K.GUPTA, J.M. THIS IS AN APPEAL BY THE DEPARTMENT AND CROSS OBJE CTION BY THE ASSESSEE FILED AGAINST THE ORDER OF LD. CIT (A)-I, AGRA, RELATING TO ASSESSMENT YEAR 1999-2000. 2. THE DEPARTMENT IS OBJECTING DELETING THE INCOME OF RS. 26,90,875/- AND RS. 40,362/- MADE ON ACCOUNT OF BOG US LONG TERM CAPITAL - 2 - 2 GAIN AND COMMISSION PAID TO OBTAIN ABOVE ENTRIES. T HE CROSS OBJECTION FILED BY THE ASSESSEE IS IN SUPPORT OF THE ORDER OF THE LD. CIT(A) . 3. PROCEEDINGS UNDER SECTION 147 WERE INITIATED IN THE PRESENT CASE, AS THE ASSESSING OFFICER RECEIVED INFORMATION FROM INVESTIGATION WING, AGRA, THAT THE ASSESSEE HAS OBTAINED BOGUS EN TRIES IN RESPECT TO, SALE OF SHARES. THEREAFTER, ASSESSMENT PROCEEDINGS WERE STARTED AND THE ASSESSEE WAS REQUIRED TO FILE THE DETAILS OF PURCHA SE OF SHARES, THE PERSONS FROM WHOM THE SHARES WERE PURCHASED WITH COMPLETE A DDRESSES WITH DISTINCTIVE NUMBER OF SHARES, RATE AND TOTAL VALUE OF PURCHASE OF SHARES AND ALSO PHOTOCOPY OF THE SHARE CERTIFICATES. DATE, MODE, AMOUNT AND SOURCE OF PAYMENT WITH EVIDENCE WERE ALSO REQUIRED. IT WAS ALSO REQUIRED THAT WHETHER THE IMPUGNED SHARES WERE PURCHASED DIR ECTLY FROM THE COMPANY BY THE ASSESSEE OR NOT. VIDE LETTER DATED 5 .9.2006, THE ASSESSEE HAS FILED DETAILED REPLY. THE DETAILS AS REQUIRED B Y THE ASSESSING OFFICER WERE ALSO FILED. AFTER EXAMINING THE DETAILS AND OT HER MATERIAL ON RECORD, THE ASSESSING OFFICER ISSUED A REQUISITION DATED 1. 1.2006 UNDER SECTION 133(6) OF THE ACT TO M/S J.K. FINANCE, SARITA VIHAR , NEW DELHI, CALLING FOR INFORMATION REGARDING PURCHASE OF SHARES BY THE ASSESSEE. IT WAS INFORMED THAT FOR ASSESSMENT YEAR 2004-05, THERE WA S NO SHARE TRANSACTION WITH SHRI RAM SARAN MITTAL, THE ASSESSEE. REGARDIN G 50,000 SHARES, IT WAS INFORMED THAT THESE SHARES WERE ALLOTTED TO SHR I RAM SARAN MITTAL ON 17.6.1996. IT WAS ALSO INFORMED THAT SHRI RAM SARAN MITTAL IS NOT - 3 - 3 SHAREHOLDER AT PRESENT. AFTER TAKING INTO CONSIDERA TION, THE ASSESSING OFFICER DREW AN ADVERSE INFERENCE AGAINST THE ASSE SSEE AND HELD THAT THE SHARE TRANSACTIONS ARE BOGUS. ACCORDINGLY, HE TREAT ED THE SALE CONSIDERATION OUT OF SHARE TRANSACTIONS AND FURTHER ADDED 1.5 % OF RECEIPTS AS COMMISSION PAID FOR OBTAINING SUCH ENTR IES. THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). AGAIN ALL T HE DETAILS RELATING TO PURCHASE AND SALE OF SHARES WERE FILED BEFORE THE L D. CIT(A). RELIANCE WAS PLACED ON THE DECISION OF DAULAT RAM RAWAT MULL , 87 ITR 349. PARAWISE REPLY OF THE ORDER OF THE ASSESSING OFFICE R WAS ALSO GIVEN. RELIANCE WAS ALSO PLACED ON VARIOUS CASE LAWS MENTI ONED IN THE ORDER OF LD. CIT(A) AT PAGE 12 TO 17. THE REPLY FILED BY THE ASSESSEE WAS TAKEN INTO CONSIDERATION BY THE LD. CIT(A) AND THE ASSESS ING OFFICER WAS DIRECTED TO MAKE ENQUIRIES WITH THE BANKERS OF M/S. ASHOK GUPTA &* COMPANY AND M/S. SUPRIYA INVESTMENT TO, VERIFY THE SOURCE OF FUNDS THROUGH WHICH REMITTANCES WERE MADE TO THE ASSESSEE . A REMINDER DATED 29.10.207 WAS ISSUED TO THE ASSESSING OFFICER BY TH E LD. CIT(A) AS NO COMMENTS WERE RECEIVED FROM THE ASSESSING OFFICER. HOWEVER, ON REMINDER ALSO, NO REPLY WAS RECEIVED FROM THE ASSES SING OFFICER. THEREAFTER, THE CIT(A) DISPOSED OF THE APPEAL OF TH E ASSESSEE BY ACCEPTING THE CLAIM OF THE ASSESSEE. THE FINDING OF THE LD. CIT(A) HAS BEEN GIVEN IN PARA 14, WHICH READS AS UNDER :- - 4 - 4 14. I HAVE CONSIDERED THE RELEVANT FACTS AND RIVAL CONTENTIONS AND FIND AS UNDER :- THE ADDITION OF RS. 4,9,125/- BEING REMITTANCE FROM ASHOK GUPTA & CO., IS CLAIMED BY THE APPELLANT TO B E REALIZATION OF DUES OF THE PRECEDING YEAR. ON PERUS AL OF THE ASSESSMENT RECORDS, IT IS OBSERVED THAT BEFO RE THE ASSESSING OFFICER, THE APPELLANT HAD FILED A CO PY OF HIS BALANCE SHEET WHICH SHOWS CLOSING BALANCE AS ON 31.3.198 AT RS. 6,29,372/- AND AS ON 31.3.1999 A T RS. 1,29,873/- IN THE NAME OF ASHOK GUPTA & CO. (BROKERS). THE APPELLANT HAS CLAIMED THAT THE DIFFERENCE OF RS. 4,9,49/- [RS. 6,29,372/- (-) RS. 1,29,873/-] REPRESENTS THE IMPUGNED REMITTANCE FROM ASHOK GUPTA & CO., WHICH WAS TREATED BY THE ASSESSING OFFICER AS UNEXPLAINED CREDIT. THE APPELL ANT HAS POINTED OUT THAT THE SAME AMOUNT WAS ADDED IN T HE ASSESSMENT ORDER PASSED ON 30.01.2006 FOR ASSESSMEN T YEAR 1998-99. IT IS ALSO OBSERVED THAT THIS FACT HA D BEEN STATED BY THE APPELLANT BEFORE THE ASSESSING OFFICER VIDE REPLY DATED 13.07.2006. THIS CLAIM OF THE APPELLANT HAS NOT BEEN REFUTED BY THE ASSESSING OFFICER WITH ANY EVIDENCE TO THE CONTRARY. THEREFOR E, - 5 - 5 SINCE THE IMPUGNED RECEIPT REPRESENTS REALIZATION O F DEBT OF THE EARLIER YEAR AND THE RELEVANT INCOME HA D ALREADY BEEN CONSIDERED IN THE ASSESSMENT ORDER FOR THAT YEAR, THE ADDITION OF THE SAME AMOUNT IN THIS YEAR IS NOT TENABLE AND HENCE DELETED. AS REGARDS THE ADDITION OF RS. 21,91,750/- ON ACCOU NT OF SALE OF SHARES OF GEEKAY FINANCE & LEASING CO. LTD. TREATED AS INCOME FROM OTHER SOURCES, IT IS SEEN THAT BOTH, THE COMPANY AS WELL AS THE BROKER HAVE CONFIRMED THE TRANSACTIONS WHICH IS NOT CONTROVERTE D BY ANY MATERIAL/ EVIDENCE ON RECORD. HENCE, THE ADDITION IS NOT SUSTAINABLE AND ACCORDINGLY, DELETE D. AS REGARDS THE ADDITION ON ACCOUNT OF COMMISSION DEEMED TO HAVE BEEN PAID FOR OBTAINING THE SUCH ENTRIES, THE SAME IS NOT SUSTAINABLE AS THERE IS NO EVIDENCE TO SHOW THAT ANY SUCH PAYMENT WAS MADE BY THE APPELLANT TO THE BROKER. ACCORDINGLY, THE ADDIT ION IS DELETED. IN THIS CONTEXT, RELIANCE IS PLACED ON DECISION OF CIT(A)-II, KANPUR IN THE CASE OF SHRI SUBHASH CHANDRA TIBEREWALA & HON'BLE I.T.A.T., LUCKNOW IN THE CASE OF BALRAM MANWANI VS. ACIT, IN 2005(6) MTC 974. - 6 - 6 4. THESE FINDINGS REMAINED UNCONTROVERTED AS NOTHING HAS BEEN FILED TO ESTABLISH OTHERWISE. THE LD. DR SIMPLY HAS PLACED RELIANCE ON THE ORDER OF ASSESSING OFFICER. THEREFORE, WE SEE NO RE ASON TO INTERFERE WITH THE FINDING OF THE LD. CIT(A). AFTER CONSIDERING TH E DETAILED EXPLANATION FILED ON BEHALF OF THE ASSESSEE AND VARIOUS CASE L AWS RELIED BEFORE HIM, HAVE ALLOWED THE CLAIM OF THE ASSESSEE. ACCORDINGLY , WE CONFIRM THE ORDER OF THE LD. CIT(A). 5. THE CROSS OBJECTION FILED BY THE ASSESSEE IS IN SUP PORT OF THE ORDER OF LD. CIT(A) DOES NOT REQUIRE ANY ADJUDICATI ON SEPARATELY. 6. IN THE RESULT, THE APPEAL OF THE DEPARTMENT AS WELL AS CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 17 TH SEPTEMBER, 2010. SD/- SD/- ( P.K. BANSAL ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AGRA DATED : 17 TH SEPTEMBER,2010. CPU* 1617 - 7 - 7 COPY FORWARDED TO :- THE APPELLANT THE RESPONDENT THE CIT THE CIT(A) CONCERNED. THE D.R, ITAT AGRA. GUARD FILE BY ORDER, AR, I.T.A.T., AGRA.