Sh. Siddharth Aggarwal, New Delhi V. ITO, New Delhi

ITA 923/DEL/2014

• Counselvise Citation: 92320114 RSA 2014
• Duration Of Justice: 1 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC 1
• Next Hearing Date: 24-08-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 17-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: SUDHIR KUMAR BHUTANI
• Keywords: Reopening of assessment; Gift; Accommodation entries; Assessment record
• Section: 147; 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC-I : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NO.923/DEL/2014 ASSESSMENT YEAR : 2003-04 SIDDHARTH AGGARWAL, E-16/1178, 1 ST FLOOR, KHALSA NAGAR, KAROL BAGH, NEW DELHI. PAN : AAKPA1497R VS. ITO, WARD-33(1), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR KUMAR BHUTANI, CA RESPONDENT BY: SHRI R.S. NEGI, SR.DR DATE OF HEARING : 24.08.2015 DATE OF PRONOUNCEMENT: 26.08.2015 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 26.12.2013 IN RELATION TO THE ASSESSMENT YEAR 2003-04. 2. THE FIRST GROUND IS AGAINST THE INVALIDITY OF RE ASSESSMENT FOR NON- SUPPLY OF REASONS RECORDED BY THE AO. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THAT THE ASSESSE E TOOK UP THIS ISSUE BEFORE ITA NO.923/DEL/2014 2 THE LD. CIT(A) ALSO CONTENDING THAT THE REASONS REC ORDED BY THE AO, BEFORE INITIATING THE ASSESSMENT PROCEEDINGS, WERE NOT CON FRONTED TO THE ASSESSEE. THE LD. CIT(A) HAS DISCUSSED THIS ASPECT IN PARA 5. 4 OF THE IMPUGNED ORDER. HE SUMMONED THE ASSESSMENT RECORDS AND NOTICED THAT THE REASONS WERE SUPPLIED TO THE ASSESSEE ON 22.4.2010 AND THE ORDER SHEET OF THE AO INDICATING SUPPLY OF SUCH REASONS, WAS DULY SIGNED BY THE LD. AR. IN VIEW OF THE ABOVE DISCUSSION, IT IS CLEAR THAT THERE CAN BE NO SCOPE FOR ARGUING THAT THE REASONS FOR INITIATING THE ASSESSMENT PROC EEDINGS WERE NOT SUPPLIED TO THE ASSESSEE. THIS GROUND FAILS. 4. THE ONLY OTHER GROUND IS AGAINST THE CONFIRMATIO N OF ADDITION OF RS.2,63,612/- MADE BY THE AO U/S 68 OF THE ACT. 5. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE DIRECTORATE OF INCOME TAX (INVESTIGATION), NEW DELHI CARRIED OUT INVESTIG ATION IN THE CASES OF CERTAIN GROUP OF PERSONS WHO WERE ENGAGED IN PROVID ING ACCOMMODATION ENTRIES. DURING THE COURSE OF SURVEY IN THE CASE O F M/S GURCHARAN JEWELLERS, WHOSE PROPRIETOR SHRI ASHOK KUMAR CHAUH AN ADMITTED TO HAVE TAKEN CHEQUES UNDER THE GARB OF GIFTS AFTER GIVING CASH TO THE ENTRY OPERATOR, CERTAIN CAMOUFLAGED TRANSACTIONS CAME TO LIGHT. PR OBE WAS INITIATED INTO THE ACCOUNTS OF THE PERSONS WHO WERE PROVIDING ACCOMMOD ATION ENTRIES. THE ITA NO.923/DEL/2014 3 INVESTIGATIONS LED TO THE REVEALING OF MANY MORE BA NK ACCOUNTS WHICH WERE BEING USED BY THE ENTRY OPERATORS FOR THE PURPOSE O F GIVING ACCOMMODATION ENTRIES. THE ASSESSEE IS ONE OF THE BENEFICIARIES OF SUCH ACCOMMODATION ENTRIES, THE DETAIL OF WHICH HAS BEEN REPRODUCED A T THE BOTTOM OF PAGE 2 OF THE ASSESSMENT ORDER. THIS DETAIL INDICATES THAT TH E ASSESSEE RECEIVED A SUM OF RS.2,63,612/- BY MEANS OF CREDIT ENTRY EMANATIN G FROM S.J. CAPITAL LTD., WHICH WAS CREDITED TO HIS BANK ACCOUNT ON 15.5.2002 . STATEMENT OF SHRI MAHESH GARG WAS RECORDED U/S 131 ON 10.9.2003 AND 2 2.9.2003 WHO ADMITTED THAT HE WAS INDULGING IN GIVING ACCOMMODAT ION ENTRIES. THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY U/S 147 O N THE BASIS OF SUCH INFORMATION. THE ASSESSEE WAS CALLED UPON TO EXPLA IN WITH EVIDENCE THE SOURCE OF RS.2,63,612/- RECEIVED BY HIM. THE ASSES SEE SUBMITTED THAT THIS SUM WAS RECEIVED AS SALE CONSIDERATION OF SHARES OF M/S SUMA FINANCE AND INVESTMENTS LTD., IN WHICH TRANSACTION HE EARNED LO NG-TERM CAPITAL GAIN OF RS.2,51,824/- WHICH WAS EXEMPT FROM TAX AND THE SAM E WAS INVESTED IN PROPERTY. THE ASSESSEE ALSO FURNISHED SHARE CERTIF ICATES. SUCH SHARES WERE SHOWN TO HAVE BEEN PURCHASED AND SOLD THROUGH M/S S .J. CAPITAL LTD. THE ASSESSEE WAS CALLED UPON TO PRODUCE THE OWNER OF M/ S S.J. CAPITAL LTD., FOR PERSONAL DEPOSITION ALONG WITH HIS BOOKS OF ACCOUNT . THE ASSESSEE FAILED TO ITA NO.923/DEL/2014 4 COMPLY WITH THE SAID DIRECTION AND ALSO COULD NOT P RODUCE ANY EVIDENCE FOR THE INITIAL INVESTMENT FOR THE PURCHASE OF SAID SHA RES. THIS LED TO THE MAKING OF ADDITION OF RS.2,63,612/-. THE LD. CIT(A ) CONFIRMED THE ADDITION. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD. THE ASSESSEE CLAIMED TO HAVE PURCHASED 2800 SHARES OF AN UNKNOWN COMPANY, NAMELY, SUMA FINANCE AND INVESTMEN T LTD., IN CASH @ RS.4.21 PER SHARE ON 5.4.2001 FOR A TOTAL SUM OF RS .11,788/-. SUCH SHARES WERE CLAIMED TO HAVE BEEN SOLD ON 15.4.2002 @ RS.93 .14 PER SHARE WITH A TOTAL CONSIDERATION OF RS.2,63,612/-. IN THIS PROC ESS, THE ASSESSEE CLAIMED TO HAVE EARNED EXEMPT LONG-TERM CAPITAL GAIN OF RS.2,5 1,824/-. THERE IS NO DOUBT ABOUT THE VALIDITY OF REOPENING OF ASSESSMENT IN THIS CASE ON THE BASIS OF SCAM OF ACCOMMODATION ENTRY OPERATORS UNEARTHED BY THE REVENUE. NOT ONLY THAT, THE PERSONS INVOLVED IN PROVIDING SUCH A CCOMMODATION ENTRIES HAVE ADMITTED THAT THEY RECEIVED CASH FROM BENEFICI ARIES AND ISSUED CHEQUES AFTER DEDUCTING SOME COMMISSION. THE ASSESS EE IS ADMITTEDLY ONE OF SUCH BENEFICIARIES. IN THE LIGHT OF THE ABOVE F ACTS, THERE REMAINS NO DOUBT WHATSOEVER THAT THE CLAIM OF THE ASSESSEE FOR HAVIN G EARNED LONG-TERM CAPITAL GAIN OF RS.2.51 LAC FROM SALE OF SHARES OF AN UNKNOWN COMPANY, ITA NO.923/DEL/2014 5 NAMELY, M/S SUMA FINANCE AND INVESTMENT LTD., IS NO T GENUINE. THE ASSESSEE SHOWED TO HAVE PURCHASED THESE SHARES @ RS .4.21 PER SHARE ON 5.4.2001 AND SOLD THEM ON 15.4.2002 @ RS.94.14 PER SHARE. THERE IS NOTHING ON RECORD TO INDICATE JUSTIFICATION FOR SUC H AN UPSWING IN THE PRICE OF SHARES OF THIS COMPANY AND THAT TOO IN SUCH A SH ORT SPAN OF TIME. ALL THESE FACTS LEAD TO THE ONLY IRRESISTIBLE CONCLUSIO N THAT THE ASSESSEE PURCHASED EXEMPT LONG-TERM CAPITAL GAIN FOR THE PUR POSE OF INVESTING IN SOME PROPERTY. SINCE THE RACKET OF ACCOMMODATION E NTRIES HAS BEEN UNEARTHED BY THE REVENUE AND THE ASSESSEES NAME SP ECIFICALLY FIGURES IN THE SUCH LIST OF ACCOMMODATION ENTRIES, I AM OF THE CONSIDERED OPINION THAT THE VIEW TAKEN BY THE LD. CIT(A) CANNOT BE INTERFER ED. I ORDER ACCORDINGLY. 7. IN THE RESULT, THE APPEAL IS DISMISSED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 6 TH AUGUST, 2015. SD/- (R.S. SYAL) ACCOUNTANT MEMBER DATED: 26 TH AUGUST, 2015. DK ITA NO.923/DEL/2014 6 COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI