Smt. Sonam Agarwalla, Kolkata V. DCIT, Central Circle - VI, Kolkata, Kolkata

ITSSA 14/KOL/2011

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9360 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 21-06-2013
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 17-08-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 17-02-2011
• Court: TRIBUNAL
• Department Lawyers: RAVI TULSIYAN AR SHRI D
• Keywords: Search and seizure; Accommodation entries
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER IT(SS)A NO.14/KOL/2011 ASSESSMENT YEAR:2007-08 SMT. SONAM AGARWALLA F-3, CIRCULAR MANSION, 222, A.J.C. BOSE ROAD, KOLKATA 700 017 [ PAN NO.ABYPC6860F ] / V/S . DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE IV, 18, RABINDRA SARANI, KOLKATA 700 001 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI RAVI TULSIYAN, AR /BY RESPONDENT SHRI D.K.SONOWAL, SR-DR /DATE OF HEARING 12-06-2013 /DATE OF PRONOUNCEMENT 21-6-2013 /O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THIS APPEAL FILED BY ASSESSEE IS ARISING OUT OF OR DER OF COMMISSIONER OF INCOME-TAX (APPEALS)-CENTRAL-I, KOLKATA (CIT(A)FO R SHORT) IN APPEAL NO. 330/CIT(A),C-1/CC-VI/09-10 DATED 09-12-2010. THE AS SESSMENT WAS FRAMED BY DCIT, CC-VI, KOLKATA U/S.143(3) R.W.S 153A OF THE I NCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE ORDER D ATED 21-12-2009 FOR ASSESSMENT YEAR (AY) 2007-08. IT(SS)A NO.14/KOL/2011 A.Y.2007-08 SMT. SONAM AGARWALLA V. DCIT, CC-VI, KOL PAGE 2 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE ADDITION MADE BY ASSESSING OFFICER ( AO) FOR ACCOMMODATION ENTRY BY TREATING THE LONG TERM CAPITAL GAINS (LTCG FOR SHORT) AS BOGUS. FOR THIS, ASSESSEE HAS RAISED FOLLOWING EFFECTIVE GROUN DS NO.2 AND 3:- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTIONS OF THE AO BY FULLY RELYING ON THE ALLEGED CONFESSIONARY STATEMENTS OF THIRD PARTIES WITHOUT AFFORDING THE A PPELLANT PROPER OPPORTUNITY TO EXAMINE THEM AND IN CONCLUDING SOLELY ON THAT BASIS , THAT THE APPELLANT HAD SHOWN BOGUS LONG-TERM CAPITAL GAINS IN TRANSACTIONS OF SH ARES OF M/S. SHREE NIDHI TRADING CO. LTD., BY TAKING ACCOMMODATION ENTRIES AND, IN T HAT VIEW, IN ADDING BACK AN AMOUNT OF RS.9,19,354/- AS UNDISCLOSED INCOME OF TH E APPELLANT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITIONS OF RS.9,19,354/- AS UNDISCL OSED INCOME OF THE APPELLANT. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE BELON GED TO MAITHAN GROUP AND A SEARCH AND SEIZURE OPERATION U/S. 132 OF THE ACT WAS CONDUCTED BY DEPARTMENT ON MAITHAN GROUP ON 20-09-2007. DURING T HE COURSE OF SEARCH, STATEMENT U/S 132(4) OF THE ACT OF SHRI SUBHAS CHAN DRA AGARWALLA, DIRECTOR OF THE GROUP COMPANIES OF THE MAITHAN GROUP WAS RECORD ED ON 21-09-2007, WHEREIN HE ACCEPTED THAT SHRI ARUN KHEMKA EXTENDED ACCOMMODATION ENTRIES IN FORM OF BOGUS LTCG, UNSECURED LOAN AND SHARE CAP ITAL TO THE GROUP CONCERNED AND FAMILY-MEMBERS. SHRI ARUN KHEMKA OFFE RED RS.23 CRORES AS UNDISCLOSED INCOME DURING THE COURSE OF SEARCH. HOW EVER, THEREAFTER NEITHER ANY WORKING OF UNDISCLOSED INCOME WAS FILED NOR ANY ADDITIONAL INCOME WAS DISCLOSED. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS RELYING ON THE STATEMENT GIVEN BY SHRI ARUN KHEMKA ON 20-09-2007, DURING THE COURSE OF SURVEY PROCEEDINGS, IN THE CASE OF M/ S. GLOBE STOCK & SECURITIES LTD., TREATED THE LTCG DECLARED BY THE ASSESSEE AS UNDISCLOSED INCOME OF THE ASSESSEE. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFO RE CIT(A), WHO CONFIRMED THE ACTION OF AO. AGGRIEVED, NOW ASSESSEE IS IN SEC OND APPEAL BEFORE US. 4. BEFORE US, AT THE OUTSET, LD. COUNSEL FOR THE AS SESSEE FILED COPY OF TRIBUNALS ORDER IN GROUP CASES IN IT(SS)A NO.22-26 /KOL/2011IN THE CASE OF IT(SS)A NO.14/KOL/2011 A.Y.2007-08 SMT. SONAM AGARWALLA V. DCIT, CC-VI, KOL PAGE 3 SMT. RITA DEVI AND OTHERS DATED 14-07-2011, WHEREIN SIMILAR ADDITIONS WERE DELETED BY OBSERVING AS UNDER:- ON COMPARISON OF THE ABOVE TABLE WITH THAT OF THE O NE WHICH WERE ANALYSED BY THE LD. CIT(A) AND THE SEBI REPORT WHICH WAS RECORDED I N THE IMPUGNED ORDER BY THE LD. CIT(A), IT IS OBSERVED THAT THE SEBI HAS ANALYSED THE TRANS ACTIONS FOR THE PERIOD APRIL, 2005 TO NOVEMBER, 2005 IN RESPECT OF M/S. GL OBE STOCKS AND SECURITIES LTD., ONLY AND NOWHERE THEY HAVE MENTIONED IN RESPECT OF SHAR E TRANSACTIONS OF M/S. NIDHI TRADING CO. LTD., AND M/S. OFFSHORE FINVEST LTD., B UT HOWEVER, IN THE CASE OF THE ASSESSEE THE REVENUE HAS DISBELIEVED THE LONG TERM CAPITAL GAIN GAINED BY THE ASSESSEE AS WELL AS FAMILY MEMBERS OF THE ASSESSEE. IN RESPECT OF M/S. NIDHI TRADING LTD., AND M/S. OFFSHORE FINVEST LTD., ALONG WITH M/ S. GLOBE STOCKS AND SECURITIES LTD., AS REGARDING M/S. GLOBE STOCKS AND SECURITIES LTD., ALSO THE PERIOD OF INVESTIGATION BY THE SEBI IS FOR THE PERIOD APRIL, 2005 TO NOVEMBER, 2005 WHEREAS THE ASSESSEE AND HER FAMILY MEMBERS HAS MADE THE TR ANSACTIONS IN THE SHARE OF M/S. GLOBE STOCKS AND SECURITIES LTD., MUCH PRIOR TO APR IL, 2005 WHICH IS EVIDENT FROM THE ABOVE TABLE AS WELL AS THE LD. CIT(A)S ANALYSI S. FROM THIS FACT IT IS EVIDENT THAT THE OBSERVATIONS MADE BY THE LD. CIT(A) IN THE IMPU GNED ORDER AT PARA NOS. 4.6 TO 4.10 ARE MISPLACED BY THE REVENUE. SINCE IN OUR CONSIDE RED OPINION THE SEBI ON WHICH THE REVENUE PLACED RELIANCE IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. ON THE OTHER HAND, THE UNDISPUTED FACTS WHICH WAS A DMITTED BY THE REVENUE ARE THAT THE ASSESSEE HAS SUBMITTED THE REQUISITE DETAILS AN D EVIDENCES INCLUDING COPIES OF CONTRACT NOTES, DEMAT ACCOUNT, BANK STATEMENTS ETC. , WHICH WAS FILED BEFORE THE AO TO SUBSTANTIVE THE GENUINENESS OF THE LONG TERM CAP ITAL GAIN WHICH WAS DIS-REGARDED BY THE AO SIMPLY BASED ON THE STATEMENT OF SHRI ARU N KHEMKA AND SHRI SUBHASH CHANDRA AGARWALA ( WHICH WERE SUBSEQUENTLY RETRACTED BY THEM ) BY LINKING WITH THE SEBIS REPORT ( WHICH IS NOT RELEVANT IN OUR OPINION ) IT IS FURTHER OBSERVED THAT THE REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO T HE EFFECT THAT NEITHER THE ASSESSEE NOR THE FAMILY MEMBERS OF THE ASSESSEE ARE RESPONSIBLE FOR INFLATION /DEFLATION OF THE SHARE MARKET WHICH IS EVIDENT FRO M THE SHARE TRANSACTIONS RECORDED IN THE CALCUTTA STOCK EXCHANGE SUBMITTED BY THE ASS ESSEE IN THE PAPER BOOK. IT IS FURTHER OBSERVED THAT THE AO HAS SIMPLY ADDED THE L ONG TERMS CAPITAL GAIN AND 2% ON ACCOUNT OF COMMISSION IGNORING THE EVIDENCES WHI CH WAS ALREADY AVAILABLE WITH THE REVENUE AUTHORITIES. 6.1 KEEPING IN VIEW OF THE ABOVE FACTS WE ARE OF TH E CONSIDERED VIEW THAT THE RATIO LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF SUMATI DAYAL VS. CIT (SUPRA) ON WHICH THE REVENUE HAS RELIED IS NOT AT ALL APPLICAB LE TO THE PRESENT FACTS. THEREFORE, WE SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES CONSIDERING THAT ALL THE TRANSACTIONS MADE BY THESE ASSESSEES ARE GENUINE AN D SUPPORTED BY DOCUMENTARY EVIDENCES. ON THE OTHER HAND, THE REVENUES PRESUMP TION IS BASED ON SUSPICION, CAPRICIOUS AND PROBABILITIES AND WITHOUT ANY CONTRA DICTORY MATERIAL AGAINST THE ONE SUBMITTED BY THE ASSESSEE IN RESPECT OF GENUINENESS OF THE TRANSACTIONS. LD. COUNSEL FOR THE ASSESSEE STATED THAT THERE IS N O DIFFERENCE IN FACTS AND IT IS THE ASSESSEE FROM THE SAME FAMILY GROUP OF CASES, W HEREIN TRIBUNAL HAS DECIDED THIS ISSUE. ON QUERY FROM THE BENCH, LD. CO UNSEL FOR THE ASSESSEE HAS STATED THAT HE IS NOT AWARE WHETHER THE HONBLE HIG H COURT HAS DECIDED THIS ISSUE OR NOT. ON FURTHER QUERY FROM THE BENCH, LD. DR STATED THAT ISSUE IS IT(SS)A NO.14/KOL/2011 A.Y.2007-08 SMT. SONAM AGARWALLA V. DCIT, CC-VI, KOL PAGE 4 COVERED BY TRIBUNALS DECISION BUT HE IS NOT ALSO A WARE WHETHER THE DEPARTMENT IS IN APPEAL BEFORE HONBLE HIGH COURT O R NOT. HE FURTHER STATED THAT HE IS NOT AWARE OF ANY OUTCOME OF HONBLE HIGH COURTS DECISION. IN SUCH CIRCUMSTANCES, AND AS THE FACTS ARE EXACTLY IDENTIC AL BEFORE US ALSO, WHAT WAS BEFORE THE TRIBUNAL IN IT(SS)A NO.22-26/KOL/2011IN THE CASE OF SMT. RITA DEVI AND OTHERS (SUPRA), RESPECTFULLY FOLLOWING THE SAME, WE DELET E THE ADDITION EXACTLY ON SAME LINE. THIS APPEAL OF ASSES SEE IS ALLOWED. 5. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. 6. ORDER IS PRONOUNCED IN THE OPEN COURT ON 21 ST JUNE, 2013 SD/- SD/- (N.S.SAINI) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER *DKP DATE: 21ST JUNE, 2013 !'# - IT(SS)A NO.14/KOL/2011 A.Y.2007-08 SMT. SONAM AGARWALLA V. DCIT, CC-VI, KOL PAGE 5 %%& %%& %%& %%& '& '& '& '& / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. ''%( ) / CONCERNED CIT 4. ) - / CIT (A) 5. &*+ %%%( , %( / DR, ITAT, KOLKATA 6. +,- ./ / GUARD FILE. BY ORD ER/ , 0 '1 %(,