Dy.CIT.-Circle-1, Agra V. Sh. Mukesh Mittal, Agra

ITA 91/AGR/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0432 (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: 15-09-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 07-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SAHIB P SATSANGI
• Keywords: Accommodation entries; Capital Gains
• Section: 131

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. ABLPM2281M I.T.A.NO . 89/AGR/2010 A. Y. 1998-99 DY. COMMISSIONER OF INCOME-TAX, SHRI RAM SARAN MITTAL, 62B, NEHRU NAGAR, CIRCLE 1, VS. AGRA AGRA APPELLANT RESPONDENT C.O.NO . 29/AGR/2010 A. Y. 1998-99 SHRI RAM SARAN MITTAL, 62B, NEHRU NAGAR, DY. COMMISSIONER OF INCOME-TAX, AGRA VS. CIRCLE 1, AGRA CROSS OBJECTOR RESPONDENT PAN NO. ABFPM3793G I.T.A.NO . 91/AGR/2010 A. Y. 2000-01 DY. COMMISSIONER OF INCOME-TAX, SHRI MUKESH MITTAL, 62B, NEHRU NAGAR, CIRCLE 1, VS. AGRA AGRA APPELLANT RESPONDENT C.O.NO . 30/AGR/2010 A. Y. 2000-01 SHRI MUKESH MITTAL, 62B, NEHRU NAGAR, DY. COMMISSIONER OF INCOME-TAX, AGRA VS. CIRCLE 1, AGRA - 2 - 2 CROSS OBJECTOR RESPONDENT DEPARTMENT BY : SHRI VINOD KUMAR, JR. DR ASSESSEE BY : SHRI SAHIB P. SATSANGI, C. A. O R D E R PER BENCH THESE ARE TWO APPEALS OF THE DIFFERENT ASSESSEES B Y THE DEPARTMENT AND TWO CROSS OBJECTIONS BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A) RELATING TO ASSESSMENT YEARS 1998-99 AND 2000-01. 2. THE LD. DR HAS PLACED RELIANCE ON THE ORDER OF THE ASSESSING OFFICER AND LD.COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE ON THE ORDER OF THE LD. CIT(A) IN CASE OF BOTH THESE ASSESSEES. THE LD.COUNSEL FOR THE ASSESSEE FURTHER STATED THAT IF THE APPEALS OF THE DEPARTMENT ARE DISMISSED, THEN IN THAT CASE THE CROSS OBJECTIONS F ILED BY THE ASSESSEE MAY BE TREATED AS NOT PRESSED. 3. AFTER HEARING BOTH THE PARTIES AND TAKING INTO CONS IDERATION THE ORDERS OF THE LOWER AUTHORITIES, WE FIND THAT THE L D. CIT(A) WAS JUSTIFIED IN ALLOWING THE GROUNDS OF THE ASSESSEE IN BOTH THE SE CASES. 4. IN CASE OF RAM SARAN MITTAL, THE ASSESSING OFFICER MADE AN ADDITION OF RS. 5 LAKHS AND RS. 7500/- ON ACCOUNT O F BOGUS LONG TERM CAPITAL GAIN AND COMMISSION PAID TO OBTAIN THE ACCO MMODATION ENTRIES IN RESPECT OF SALE OF SHARES. THE ASSESSMENT IN THIS C ASE WAS REOPENED BY - 3 - 3 INVOKING THE PROVISIONS OF SECTION 147/148. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER REQUI RED THE ASSESSEE TO FILE THE DETAILS OF PURCHASE OF SHARES ALONGWITH TH EIR COMPLETE ADDRESS, DISTINCTIVE NUMBER OF SHARES, RATE AND TOTAL VALUE OF PURCHASE OF SHARES. THE ASSESSEE WAS ALSO REQUIRED TO FILE DATE, MODE, AMOUNT AND SOURCE OF PAYMENT WITH EVIDENCE. THE ASSESSEE WAS ALSO REQUIR ED TO FILE THE DETAILS WHETHER THE SHARES WERE PURCHASED DIRECTLY FROM THE COMPANY OR THROUGH SOME SHARE BROKER AND HOW THE DELIVERY OF SHARES WE RE OBTAINED. VIDE LETTER DATED 3.1.2006, THE ASSESSEE FILED ALL THESE DETAILS SHOWING THE SOURCE OF ACQUISITION OF SHARES AND THE DETAILS OF SHARES. IT WAS ALSO EXPLAINED THAT THE IMPUGNED SALES WERE DISCLOSED UN DER V.D.I.S. 197 AND THE DECLARATION OF SHARES HAS BEEN ACCEPTED BY THE DEPARTMENT. IT WAS FURTHER SUBMITTED THAT THESE SHARES HAD BEEN SOLD D URING THE YEAR UNDER CONSIDERATION I.E. ASSESSMENT YEAR 1998-99 AND THE AMOUNT HAS BEEN RECEIVED THROUGH BANK DRAFT WHICH HAS BEEN DEPOSITE D IN THE BANK ACCOUNT OF THE ASSESSEE. IT WAS FURTHER EXPLAINED T HAT THE SHARES WERE DELIVERED IN PHYSICAL FORM. FURTHER, THE DETAILS OF PURCHASES AND SALES WERE ALSO FILED. IT WAS ALSO SUBMITTED THAT THE PAR TIES IN RESPECT OF PURCHASES AND SALE OF SHARES MAY BE EXAMINED BY SUM MONING THEM UNDER SECTION 131 OF THE ACT. THE ASSESSING OFFICER, NOTE D THAT THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS LAY UPON HIM AND, THER EFORE, HE REJECTED THE CONTENTION OF THE ASSESSEE AND ADDED THE AMOUNT OF RS. 5 LAKHS RECEIVED - 4 - 4 BY THE ASSESSEE ON ACCOUNT OF SALE OF SHARES AND AL SO MADE AN ADDITION OF RS. 7,500/- BEING COMMISSION PAID ON ACCOUNT OF ACC OMMODATION ENTRY UNDER THE GARB OF SALE OF SHARES. THE ASSESSEE PREF ERRED THE APPEAL BEFORE THE LD. CIT(A). DETAILED SUBMISSIONS WERE FILED BEF ORE HIM. THE CERTIFICATE OF ACCEPTING THE DISCLOSURE UNDER VDIS 1997 WAS ALSO FILED. RELIANCE WAS PLACED ON VARIOUS CASE LAWS MENTIONED IN THE ORDER OF THE LD. CIT(A). ALL THE DETAILS WERE FILED BY THE ASSES SEE WERE SENT TO THE ASSESSING OFFICER FOR HIS COMMENTS. THE COMMENTS WE RE RECEIVED FROM THE ASSESSING OFFICER. AFTER CONSIDERING THE REPLY AND THE COMMENTS OF THE ASSESSING OFFICER, THE LD. CIT(A) FOUND THAT TH E ASSESSING OFFICER HAS DISALLOWED THE CLAIM ONLY ON ACCOUNT OF STATEMENT O F BROKER SHRI ASHOK KUMAR GUPTA & COMPANY, WHO STATED THAT HE WAS PROVI DING ACCOMMODATION ENTRIES TO VARIOUS HIS CLIENTS. THE L D. CIT(A) HAS NOTICED THAT NOWHERE THE NAME OF THE ASSESSEE WAS MENTIONED BY THE BROKER SHRI ASHOK KUMAR GUPTA & COMPANY. THEREFORE, THE GENERAL STATEMENT GIVEN BY SHRI ASHOK KUMAR GUPTA CANNOT BE APPLIED ON THE FACTS OF THE ASSESSEES CASE AS NO ADVERSE MATERIAL WAS FOUND AG AINST THE ASSESSEE. THE LD. CIT(A) HAS NOTED THAT THERE IS NO EVIDENCE ON RECORD, WHICH SHOWS INTRODUCTION OF UNACCOUNTED MONEY IN THE BANK ACCOUNT OF THE BROKER PRIOR TO ITS REMITTANCE TO THE ASSESSEE AS S ALE PROCEEDS OF SHARES. THEREFORE, HE ALLOWED THE GROUNDS OF THE ASSESSEE B Y DELETING THE ADDITION OF RS. 5 LAKHS AND THE ADDITION OF RS. 7500/-. - 5 - 5 5. THESE FINDINGS OF THE LD. CIT(A) REMAINED UNCONTROV ERTED AS NOTHING HAS BEEN BROUGHT ON RECORD TO, ESTABLISH TH AT THE ASSESSEE HAS INTRODUCED HIS OWN MONEY UNDER THE GARB OF SALE OF SHARES WITHOUT BRINGING ANY MATERIAL, THE REJECTION OF CLAIM OF SA LE OF SHARES, IN OUR CONSIDERED, VIEW, WAS NOT JUSTIFIED. IT IS ALSO A M ATTER OF FACT THAT THE INVESTMENT IN PURCHASE OF SHARES WAS SURRENDERED BY THE ASSESSEE UNDER VDIS 1997, WHICH HAS BEEN ACCEPTED BY THE DEPARTMEN T. ONCE PURCHASE HAS BEEN ACCEPTED BY THE DEPARTMENT, THEN NOT ACCEP TING THE SALE CONSIDERATION, IN OUR CONSIDERED VIEW, WAS NOT JUST IFIED. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE HOLD THAT THE LD. CIT(A ) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER . ACCORDINGLY, WE CONFIRM HIS ORDER. 6. SINCE WE HAVE DISMISSED THE APPEAL OF THE DEPARTMEN T, THEREFORE, THE CROSS OBJECTION FILED BY THE ASSESSE E IS DISMISSED AS NOT PRESSED. 7. IN CASE OF OTHER ASSESSEE I.E. SHRI MUKESH MITTAL, SIMILAR ISSUE IS INVOLVED. IN THIS CASE ALSO, THE DEPARTMENT IS OBJ ECTING THE DELETION OF ADDITION OF RS. 4,99,000/- MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN ON SALE OF SHARES. IN THIS CASE ALSO, NOTICE UNDER SEC TION 147/148 WAS ALSO ISSUED. DURING THE ASSESSMENT YEAR, THE ASSESSEE WA S REQUIRED TO FILE THE DETAIL OF PURCHASES OF SHARES ALONGWITH THE SOURCE OF INVESTMENT IN SHARES. THE ASSESSEE FILED ALL THE DETAILS. HOWEVER, THE AS SESSING OFFICER WAS NOT - 6 - 6 SATISFIED. THE INFORMATION WAS RECEIVED BY THE ASSE SSING OFFICER THAT ENTRY OF BOGUS LONG TERM CAPITAL GAINS OBTAINED BY THE ASSESSEE FROM M/S. AGARWAL & COMPANY, DELHI HAS BEEN SHOWN BY THE ASSE SSEE. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, THE ASSESSING OFFICE R TREATED THE SALE CONSIDERATION AS BOGUS AND MADE ADDITION OF RS. 4,9 9,000/-. THE DETAILED SUBMISSIONS WERE FILED ALONGWITH THE DETAIL OF PURC HASES AND DETAIL OF SALE OF SHARES. THE DETAILED SUBMISSIONS FILED ON B EHALF OF THE ASSESSEE HAS BEEN INCORPORATED BY THE LD. CIT(A) IN HIS ORDE R AT PAGE 4 TO 6. THEREAFTER, THE LD. CIT(A) FOUND THAT THE ASSESSEE HAS DISCHARGED THE ONUS LAY UPON IT. ACCORDINGLY, HE DELETED THE ADDITION. 8. AFTER CONSIDERING THE ORDER OF THE ASSESSING OFFICE R AND LD. CIT(A), WE FIND NO, INFIRMITY IN THE ORDER OF THE L D. CIT(A). FINDING OF THE LD. CIT(A) HAS BEEN RECORDED IN PARA 12 AS UNDE R :- 12. I HAVE CONSIDERED THE RELEVANT FACTS AND RIVAL CONTENTIONS AND FIND THAT THERE IS NO MATERIAL OR E VIDENCE ON RECORD TO SHOW THAT LONG TERM CAPITAL GAINS SHOWN B Y THE APPELLANT IN HIS RETURN OF INCOME IS NOT GENUINE. I T IS SEEN THAT THE APPELLANT HAD HIMSELF SOUGHT COPIES OF DOC UMENTS FILED ALONGWITH THE ORIGINAL RETURN OF INCOME FROM THE ASSESSING OFFICER. HOWEVER, IT APPEARS THAT NO SUCH DOCUMENTS ARE AVAILABLE EITHER IN THE ASSESSMENT RE CORDS OR IN THE APPELLANTS RECORDS. FROM THE MATERIAL FURNI SHED BY THE - 7 - 7 INVESTIGATION WING, THERE IS NO EVIDENCE TO SHOW TH AT THE BROKER M/S. AGARWAL & COMPANY HAS ADMITTED TO RIGGI NG SHARE PRICES AND PROVIDING SHARE SALE ENTRIES TO VA RIOUS PERSONS INCLUDING THE APPELLANT. THERE IS NO MATERI AL OR EVIDENCE ON RECORD TO REACH THE CONCLUSION THAT THE SHARE TRANSACTIONS SHOWN BY THE APPELLANT AND THE LONG TE RM CAPITAL GAINS DISCLOSED BY HIM ARE NON-GENUINE. FURTHER, TH ERE IS NO COMPARABLE CASE ON RECORD WHEREIN ON SIMILAR FACTS AND CIRCUMSTANCES, SUCH A CONCLUSION HAS BEEN UPHELD BY ANY APPELLATE OR JUDICIAL AUTHORITY. HENCE, THE FINDING OF THE ASSESSING OFFICER THAT OUT OF LONG TERM CAPITAL GAI NS OF RS. 8,49,873/-, RS. 4,9,00/- REPRESENTS THE APPELLANTS INCOME FROM OTHER SOURCES, IS NOT TENABLE. CONSEQUENTLY, T HE ASSESSING OFFICER, IS DIRECTED TO ADOPT THE INCOME AS PER RETURN.. 9. NEITHER THE ABOVE FINDING COULD BE CONVERTED BY THE LD. DR NOR ANY OTHER MATERIAL HAS BEEN BROUGHT ON RECORD. THEREFORE, IN VIEW OF THE REASONING GIVEN BY THE LD. CIT(A), WE CONFIRM H IS ORDER. 10. SINCE WE HAVE CONFIRMED THE ORDER OF THE LD. CIT(A) , THEREFORE, WE DISMISS THE CROSS OBJECTION FILED BY THE ASSESSE E, AS NOT PRESSED. 11. IN THE RESULT, THE APPEALS OF THE DEPARTMENT AS WE LL AS CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. - 8 - 8 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* 1516 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.