Appeal details
Counselvise Citation
[2015] 122 COUNSELVISE.COM (IT) 0996 (ITAT-INDORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 3 month(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
29-09-2015
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
DB
Assessment Year
2004-2005
Appeal Filed On
28-06-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO. 505/IND/2013 A.Y. : 2004-05 ACIT, SHRI PRAVIN MITTAL, CIRCLE 2(1), VS INDORE. INDORE APPELLANT RESPONDENT P.A.N. NO A FDPM - 4586R C.O.NO.107/IND/2013 (ARISING OUT OF I.T.A.NO. 505/IND/2013) A.Y. : 2004-05 SHRI PRAVIN MITTAL VS. ACIT, INDORE CIRCLE 2(1), INDORE CROSS OBJECTOR RESPONDENT -: 2: - 2 I.T.(SS).A.NO. 154/IND/2013 A.Y. : 2004-05 ACIT, SMT. VANDANA MITTAL, CIRCLE 2(1), VS INDORE. INDORE APPELLANT RESPONDENT P.A.N. NO AIWPM1000A C.O.NO.109/IND/2013 (ARISING OUT OF I.T.(SS).A.NO. 154/IND/2013) A.Y. : 2004-05 SMT. VANDANA MITTAL, VS. ACIT, INDORE CIRCLE 2(1), INDORE CROSS OBJECTOR RESPONDENT I.T.(SS).A.NO. 155/IND/2013 A.Y. : 2004-05 ACIT, SMT. URMILA MITTAL, CIRCLE 2(1), VS INDORE. INDORE APPELLANT RESPONDENT P.A.N. NO ABMPM6200B -: 3: - 3 C.O.NO.110/IND/2013 (ARISING OUT OF I.T.(SS).A.NO. 155/IND/2013) A.Y. : 2004-05 SMT. URMILA MITTAL, VS. ACIT, INDORE CIRCLE 2(1), INDORE CROSS OBJECTOR RESPONDENT I.T.(SS).A.NO. 156/IND/2013 A.Y. : 2004-05 ACIT, SMT. SHARDA DEVI MITTAL, CIRCLE 2(1), VS INDORE. INDORE APPELLANT RESPONDENT P.A.N. NO ACVPM4511B C.O.NO.111/IND/2013 (ARISING OUT OF I.T.(SS).A.NO. 156/IND/2013) A.Y. : 2004-05 SMT. SHARDA DEVI MITTAL, VS. ACIT, INDORE CIRCLE 2(1), INDORE CROSS OBJECTOR RESPONDENT -: 4: - 4 I.T.(SS).A.NO. 157/IND/2013 A.Y. : 2004-05 ACIT, SHRI MAHESH MITTAL, CIRCLE 2(1), VS INDORE. INDORE APPELLANT RESPONDENT P.A.N. NO ACVPM4802B C.O.NO.112/IND/2013 (ARISING OUT OF I.T.(SS).A.NO. 157/IND/2013) A.Y. : 2004-05 SHRI MAHESH MITTAL, VS. ACIT, INDORE CIRCLE 2(1), INDORE CROSS OBJECTOR RESPONDENT I.T.(SS).A.NO. 158/IND/2013 A.Y. : 2004-05 ACIT, SHRI KAPIL MITTAL, CIRCLE 2(1), VS INDORE. INDORE APPELLANT RESPONDENT P.A.N. NO A FIPM2508Q -: 5: - 5 C.O.NO.113/IND/2013 (ARISING OUT OF I.T.(SS).A.NO. 158/IND/2013) A.Y. : 2004-05 SHRI KAPIL MITTAL, VS. ACIT, INDORE CIRCLE 2(1), INDORE CROSS OBJECTOR RESPONDENT DATE OF HEARING : 18.08.2015 DATE OF PRONOUNCEMENT : 29 .0 9 .2015 APPELLANT BY SHRI RAJEEV VARSHANE, CIT DR RESPONDENT BY SHRI S.N. AGRAWAL AND SHRI PANKAJ MONGRA, CAS O R D E R PER GARASIA, J.M. APPEALS BY THE DEPARTMENT AND CROSS OBJECTIONS BY T HE ASSESSEES RELATE TO SAME GROUP OF ASSESSEES AND ARE DIRECTED AGAINST THE SEPARATE ORDERS OF LD. CIT(A)-I, INDORE , ALL DATED 26.03.2013 PERTAINING TO ASSESSMENT YEAR 2004-05. S INCE -: 6: - 6 COMMON GROUNDS ARE INVOLVED TAKEN BY THE REVENUE IN ALL THE APPEALS AND THE GROUNDS TAKEN IN THE CROSS OBJECTIO NS BY THE ASSESSEE, WE ARE DISPOSING OF ALL THESE APPEALS AND CROSS OBJECTIONS BY THIS COMMON ORDER FOR THE SAKE OF CON VENIENCE. 2. CROSS OBJECTIONS FILED IN ALL THE APPEALS ARE TIME BARRED. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMI TTED AN APPLICATION FOR CONDONATION STATING THAT THE APPEAL S RECEIVED BY THE ACCOUNTANT OF THE ASSESSEE GROUP SHRI YADVEN DRA JOSHI, WHO WAS UNDER THE IMPRESSION THAT SINCE THE APPEALS WERE DECIDED IN FAVOR OF THE ASSESSEES ON MERIT, NO APPEALS WERE REQUIRED TO BE FILED ON LEGAL ISSUE WHICH WAS DISMISSED BY THE LD. CIT(A). TO THIS EFFECT, AN AFFIDAVITS BY TH E ACCOUNTANT IS ALSO FILED IN ALL THE CROSS OBJECTIONS FILED BY TH E ASSESSEES. WE HAVE PERUSED THE RECORD. WE FIND THAT THE CAUSE IS REASONABLE AND WE CONDONE THE DELAY IN ALL THE CROSS OBJECTION S. 3. WE ARE DECIDING FIRST THE APPEAL OF SHRI PRAVIN MIT TAL WHICH WILL BE BINDING ON ALL THE APPEALS OF THE REV ENUE AND CROSS OBJECTIONS OF THE ASSESSEES. -: 7: - 7 I.T.A.NO. 505/IND/2013 (DEPARTMENTS APPEAL) : 4. THE FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE REVENU E :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ID CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE OF DERIVING THE INCOME UNDER THE HEAD LONG TERM CAPITAL GAIN ON SALE OF SHARES OF M/S HINDUSTAN CONTINENTAL LTD. AS AGAINST INCOME FROM OTHER SOURCES AS TREATED BY AO. 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN NOT CONSIDERING THE LANDMARK JUDGMENT OF HONBLE ITAT INDORE IN THE CASE OF M/S AGRAWAL COAL CORPORATION AND OTHERS DELIVERED ON 31.10.2011 AFTER DETAILED ANALYSIS AND ENQUIRY CONDUCTED BY ITSELF (ITAT) VIDE ITA NO. 151/IND/2009 WHEREIN IT WAS HELD THAT M/S. HINDUSTAN CONTINENTAL LTD. IS ONLY A PAPER COMPANY TO PROVIDE ACCOMMODATION ENTRIES TO THE BENEFICIARIES IN THE FORM OF ADVANCING LOANS, -: 8: - 8 INVESTING SHARE APPLICATION MONEY AND PROVIDING SALE OF SHARES AT A HIGHER RATE. 3. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT ORDER OF HONBLE HIGH COURT OF MADHYA PRADESH INDORE IN THE CASE OF DARPAN ANAND, DISMISSING THE DEPARTMENTAL APPEAL, IN A SUMMARY MANNER BY OBSERVING THAT NO SUBSTANTIAL QUESTIONS OF LAW AROSE IN THIS CASE WARRANTING INTERFERENCE BY THE COURT WAS AT VARIANCE WITH THE ORDER IN THE CASE OF AGRAWAL COAL CORPORATION AND OTHERS, ON ASSESSEES APPEAL, BY ADMITTING THE SAME ON THE GROUND THAT SUBSTANTIAL QUESTIONS OF LAW DO ARISE FROM THE FINDING OF HONBLE ITAT ON ISSUE OF EXISTENCE OF M/S HINDUSTAN CONTINENTAL LTD. ON PAPER TO PROVIDE ACCOMMODATION ENTRIES TO THE BENEFICIARIES 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F -: 9: - 9 RS. 12,00,000/- MADE BY THE AO U/S 68 OF INCOME-TAX ACT, 1961, ON ACCOUNT OF UNSECURED LOAN OF RS. 6,00,000/- EACH FROM M/S PARKSON SECURITIES LTD. AND M/S LUNKAD MEDIA AND ENTERTAINMENT LTD. GROUND NOS. 1, 2 & 3 : 5. THERE WAS A SEARCH AND SEIZURE U/S 132 OF THE INCOME-TAX ACT, 1961, WERE CONDUCTED AT ASSESSEES RESIDENCE & BUSINESS PREMISES AND CONSEQUENT UPON THE SEARCH, NOTICE U/S 153A WAS SERVED UPON THE ASSESSEE. DURING THE Y EAR UNDER CONSIDERATION, THE ASSESSEE HAD SHOWN LONG TE RM CAPITAL GAIN OF RS. 24,66,293/- ON SALE OF SHARES. ON VERIFICATION OF DETAILS, IT WAS NOTICED THAT THE A SSESSEE HAD BOUGHT TOTAL SHARES TOTAL 26000 SHARES OF HINDUSTAN CONTINENTAL LIMITED AT THE PRICE OF RS. 1.17 BY ACC OUNT PAYEE CHEQUES THROUGH BROKER SHRI VINOD PARASRAMPURIA. SUBSEQUENTLY, THE SOME SHARES WERE SOLD THROUGH M/S . JAI SHAREFIN LIMITED, AHMEDABAD, ON 17.3.2004 AND 18.3. 2004 AT -: 10: - 10 THE PRICE OF RS. 95.92 AND RS. 96.14 PER SHARE RESP ECTIVELY. THE AO HAS INFORMATION THAT THERE WERE SOME MIS-USE OF TRADING FACILITY IN SOME STOCK EXCHANGE TO LAUNDER BLACK MONEY. THEREFORE, THE ASSESSEE WAS ASKED TO EXPLAIN THE REALITY OF TRANSACTION AND WAS ASKED TO EXPLAIN THE BASIS OF PURCHASE PRICE AND SALE PRICE AND TO PRODUCE THE D- MAT ACCOUNT STATEMENT. HE WAS ASKED TO EXPLAIN AS TO WH Y THE WHOLE TRANSACTION SHOULD NOT BE CONSIDERED AS A COL OURABLE DEVICE TO EVADE TAXES AND BRING UNACCOUNTED MONEY I N THE REGULAR BOOKS OF ACCOUNT BY THE ROUTE OF LTCG AT LO WER RATE AT 10 % ARE CLAIMING THE SAME AS EXEMPT U/S 54F. THE S HOW CAUSE NOTICE WAS GIVEN AND AFTER GIVING SHOW CAUSE NOTICE, THE AO WAS OF THE VIEW THAT TRANSFER OF SHARES OF HINDU STAN CONTINENTAL LIMITED IS NOTHING BUT A MADE OUT STORY OF INTRODUCING ASSESSEES GROUP UNACCOUNTED MONEY THRO UGH THE GUISE OF LONG TERM CAPITAL GAINS AND RELYING UPON T HE DECISION IN THE CASE OF MCDOWELL AND CO. LIMITED VS. COMMERC IAL TAX OFFICER, (1985) 154 ITR 148 ( S. C. ), THE AO HAS H ELD THE TRANSACTION THROUGH SEBI REGISTERED BROKER AND DE-M AT ACCOUNT DO NOT FORM A CHANGE IN NATURE OF TRANSACTI ON. THE -: 11: - 11 TRANSACTION OF PURCHASE AND SALE OF THE SHARES OF M /S. HINDUSTAN CONTINENTAL LIMITED ARE NOT GENUINE AND L ONG TERM CAPITAL GAIN OF RS. 24,66,293/- WAS TREATED AS PART OF INCOME FROM OTHER SOURCES. 6. THE MATTER CARRIED TO LD. CIT(A) AND THE LD. CIT(A) HAS DELETED THE ADDITION OBSERVING AS UNDER :- 4. GROUND NO. 3 : THE APPELLANT HAS CHALLENGED THE ADDITION OF RS. 24,66,293/- MADE BY THE ASSESSING OFFICER BY TREATING THE AMOUNT OF LONG TERM CAPITAL GAIN ON SALE OF SHARES OF HINDUSTAN CONTINENTALS LIMITED. THE ASSESSEE DURING THE COURS E OF ASSESSMENT PROCEEDING HAD FILED COMPLETE DETAILS WHICH INCLUDES :- 1. COPY OF PURCHASE BILLS OF SHARES OF HINDUSTAN CONTINENTALS LIMITED. 2. COPY OF BANK ACCOUNT FROM WHICH PAYMENT TOWARDS PURCHASES OF SHARES WERE MADE. 3. COPY OF D-MAT ACCOUNT WITH MPSE SECURITIES LIMITED. 4. COPY OF SALE BILLS AS ISSUED BY THE BROKING FIRM. -: 12: - 12 THE APPELLANT DURING THE COURSE OF APPELLATE PROCEE DINGS RELIED ON THE FOLLOWING DIRECT DECISIONS :- S.NO. REFERENCE CITATION 1. NAVEEN GUPTA 005 SOT 94 (DEL. BENCH ) 2. SMT. MEMO DEVI 007 DTR 158 (AGRA BENCH) 3. SMT. NEELAM CHAWLA 006 DTR 141 (DEL BENCH) 4. RAJIV AGRAWAL 089 TTJ 1095 ( DEL.BENCH) 5. SHRIPAL SINGH GULATI 009 DTR 564 (AGRA BENCH ) 6. MUKESH R.MAROLLA 006 SOT 247 (MUMBAI BENCH ) 7. CHANDRESH KUMAR MAHESHWARI 120 TTJ 132 (JODH.BENCH) THE APPELLANT ALSO REFERRED THE DECISION OF THE HON'BLE I.T.A.T., INDORE BENCH, INDORE, IN THE CASE OF SHRI DARPAN ANAND VS. ACIT,( APPEAL I.T.A.NO. 129/IND/2009 DATED 14.12.2009), COPY OF THE SAID DECISION IS ALSO FILED DURING THE COURSE OF APPELLATE PROCEEDING. IN THE SAID DECISION, HON'BLE JURISDICTIONAL BENCH OF TRIBUNAL HAS ACCEPTED THE LONG TERM CAPITAL GAIN ON SALE OF SHARES OF HINDUSTAN CONTINENTAL LIMITED AS GENUINE LONG TERM CAPITAL GAIN. THE -: 13: - 13 REVENUE HAS PREFERRED AN APPEAL BEFORE THE HON'BLE HIGH COURT. HOWEVER, HON'BLE HIGH COURT AFTER DETAILED DISCUSSION APPROVED THE ORDER OF THE HON'BLE I.T.A.T. A REVIEW PETITION FILED BY THE DEPARTMENT HAS ALSO BEEN REJECTED BY THE HON'BLE HIGH COURT. BOTH THE DECISIONS OF THE HON'BLE HIGH COURT AND I.T.A.T. ARE PLACED ON RECORD. AFTER CONSIDERING THE OVERALL FACTS OF THE CASE AND RELYING UPON THE DECISIONS OF THE HON'BLE I.T.A.T. AND HON'BLE HIGH COURT IN THE CASE OF SHRI DARPAN ANAND, I HEREBY DIRECT THE AO TO TREAT THE LONG TERM CAPITAL GAIN IN ACCORDANCE WITH DECISION OF I.T.A.T. IN ABOVE CASE. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE LD. CIT(A) HAS RELIED UPON THE DEC ISION OF DARPAN ANAND VS. ACIT, IN I.T.A.NO. 129/IND/2009, W HEREIN THE TRIBUNAL HAS ACCEPTED THAT THE LONG TERM CAPITA L GAIN ON -: 14: - 14 SALE OF SHARES OF HINDUSTAN CONTINENTALS LIMITED AS GENUINE LONG TERM CAPITAL GAINS AND THE MATTER WENT TO HON' BLE HIGH COURT AND HIGH COURT HAS ALSO DISMISSED THE APPEAL OF THE DEPARTMENT. IN VIEW OF THIS, WE DISMISS THE DEPARTM ENTAL APPEAL ON THIS GROUND. GROUND NO. 4 : 8. THE SHORT FACTS OF THE CASE ARE THAT THERE WAS A S URVEY CONDUCTED IN THE PREMISES OF LUNKAD GROUP OF COMPAN Y ON 02.05.2006 AND THEY WERE INDULGED IN PRACTICING OF GIVING ACCOMMODATION ENTRIES OF SHARE APPLICATION MONEY IN UNSECURED LOAN. THIS COMPANY VIZ. LUNKAD SECURITIES , LUNKAD MEDIA AND LUNKAD ENTERTAINMENT & OTHERS ARE SITUATED AT RACE COURSE ROAD, INDORE. ALL THESE COM PANIES ARE RUN BY SHRI VINAY LUNKAD AND HIS SON. THESE COMPANI ES WERE PROVIDING ENTRIES OF UNSECURED LOAN, SHARE APPLICAT ION MONEY AND INVESTMENT IN ACTUAL STATE OF NEEDY PERSONS, WH O ARE BENEFICIARIES AND DURING THE SURVEY HUGE CASH RECEI PT AND PAYMENTS WERE FOUND AND WHICH IS DISCUSSED IN THE ASSESSMENT ORDER AND THERE WAS LIST OF BANKS AND CO MMISSION ON THIS ENTRY. THE AO HAS VERIFIED THE MODUS OPERAN DI OF -: 15: - 15 LUNKAD GROUP AND HE WAS OF THE VIEW THAT THE ASSESS EE HAS MADE INVESTMENT IN THESE LUNKAD GROUP OF COMPANIES AND RS. 12 LAKHS WAS ASSESSED IN THIS YEAR AND THE AO HAS M ADE THE ADDITION OF RS. 12 LAKHS IN THE HANDS OF THE ASSESS EE. MOREOVER, THE AO HAS ALSO MADE THE ADDITION OF RS. 6 LAKHS EACH FROM PARKSONS SECURITIES LIMITED TO THE TOTAL INCOME OF THE ASSESSEE. 9. THE MATTER CARRIED TO LD. CIT(A) AND THE LD. CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER :- 2.3 THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS TAKEN UNSECURED LOAN TO THE TUNE OF RS . 12,00,000/-. DETAIL OF LOANS TAKEN DURING THE YEAR OF RS. 12,00,000/- IS AS UNDER HOWEVER THE ADDITION U/S 68 WAS MADE BY THE ASSESSING OFFICER LD. A.O. BY RESTRICTI NG THE AMOUNT UP TO THE EXTENT OF PEAK CREDIT OF RS. 6,00, 000/- ONLY. -: 16: - 16 S.NO. NAME OF THE COMPANY AMOUNT OF UNSECURED LOAN TAKEN DURING THE A.Y. 04-05 PEAK CREDIT TAKEN BY AO IN ASSESSMENT YEAR 2004-05 1. PARKSONS SECURITIES LTD. 6,00,000 NIL 2. LUNKAD MEDIA & ENTERTAINMENT LTD. 6,00,000 6,00,000 TOTAL 12,00,000 6,00,000 THUS THE ADDITION OF RS. 6,00,000/- U/S 68 WAS MADE BY THE LD. A.O. IN THE ASSESSMENT ORDER PASSED BY HIM. 2.4.1 ) THAT ON PERUSAL OF PAGE NO 13 OF THE ASSESS MENT ORDER IT SEEMS THAT THE ASSESSING OFFICER MADE THE ADDITION IN THE CASE OF THE ASSESSEE ON THE BASIS O F INFORMATION AVAILABLE WITH HIM ON THE BASIS OF SURV EY CONDUCTED BY THE DEPARTMENT ON 02-05-2006 ON THE BUSINESS PREMISES OF THE LUNKAD GROUP. THUS, FROM T HE HISTORY AND BACKGROUND OF THE CASE IT IS VERY CLEAR THAT NOTHING INCRIMINATING WERE FOUND AND SEIZED FROM TH E -: 17: - 17 BUSINESS PREMISES OF THE ASSESSEE DURING THE COURSE OF SEARCH BUT THE ADDITION WAS MADE ON THE BASIS OF INFORMATION AVAILABLE IN THE POSSESSION OF ANOTHER ASSESSING OFFICER ON THE BASIS OF SURVEY CONDUCTED BY HIM ON THE BUSINESS PREMISES OF LUNKAD GROUP. 2.4.2) THE ASSESSEE DURING THE COURSE OF SEARCH ASSESSMENT PROCEEDING FILED THE FOLLOWING DOCUMENTS :- (I) CONFIRMATIONS OF UNSECURED LOAN CREDITORS DULY SIGNED (II) COPY OF AFFIDAVIT DULY SIGNED BY EACH LOAN CREDITOR (III) THE AMOUNT OF LOANS WERE RECEIVED THROUGH A/C PAYEE CHEQUES. (IV) THE AMOUNT OF INTEREST WAS PAID ON THE SAID AMOUNT OF LOAN BY A/C PAYEE CHEQUES AND TDS WAS ALSO DEDUCTED WHEREVER APPLICABLE. (V) ALL THE LOAN CREDITOR ARE REGULARLY ASSESSED TO TAX BY THE ACTT 3(1),INDORE 2.4.3) THE ASSESSING OFFICER ADDED THE SAID AMOUNT OF -: 18: - 18 LOAN TO THE INCOME OF THE ASSESSEE MERELY FOR THE REASON THAT THE LOAN CREDITOR WAS NOT PERSONALLY APPEARED. 2.4.4) THE ASSESSEE RELIED ON THE FOLLOWING DIRECT DECISIONS :- S.NO. REFERENCE CITATION 1. METACHEM INDUSTRIES LTD 245 ITR 160 (MP) 2. MICRO MELT (P) LTD 177 TAXMANN 35 (GUJ) 3. RAM MANOHAR SINGH 009 DTR 270 (JAB BENCH) 4. S.K.JAIN 002 SOT 579 (AGRA BENCH) 5. S.KAMALJEET SINGH 147 TAXMAN 18 (ALLAHABAD) 6. ASHOK PAL DAGA 220 ITR 452 (MP) 7. SAROGI CREDIT CORPORATION 103 ITR 344 (PATNA) 8. NEMI CHAND KOTHARI 264 ITR 254 (GAU) 9. MEHROTRA BROTHERS 270 ITR 157 (MP) 2.4.5) THAT IN THE PRESENT CASE THE ASSESSEE HAS PROPERLY DISCHARGED ONUS LYING ON HIM BY PROVING THE IDENTITY, CAPACITY AND CREDITWORTHINESS OF THE LOAN CREDITORS WHICH STAND PROVED. THE SAID AMOUNTS OF LOANS WERE RECEIVED BY ACCOUNT PAYEE CHEQUES AND WERE ALSO REPAID THROUGH ACCOUNT PAYEE CHEQUES ONLY. SINCE, THE ENTIRE LOAN TRANSACTIONS WERE EXECUTED THROUGH ACCOUNT -: 19: - 19 PAYEE CHEQUES, HENCE THERE IS NO REASON FOR THE ASSESSING OFFICER TO HAVE ANY DOUBT ABOUT THE GENUINENESS OF THE LOAN TRANSACTION. IF THE ASSESSING OFFICER HAS ANY DOUBT ABOUT THE CREDITWORTHINESS OF THE LOAN TAKEN BY THE ASSESSEE , IN THAT CASE, NECESSARY ADDITION , IF ANY, IS TO BE MADE IN THE CASES OF THE LOAN CREDITORS AND NOT IN THE CASE OF THE ASSESSEE. THE SAID CREDITOR ITSELF OWNED THE AMOUNT OF LOAN ADVANCED BY IT TO THE ASSESSEE. 2.5] THAT IN THE GROUP CASES, THE LD CIT(A) VIDE HIS ORDER DT 22.03.2011 HAS DELETED THE ADDITION MADE ON ACCOUNT OF UNSECURED LOAN TAKEN FROM LUNKAD GROUP OF COMPANIES. 2.6.1] THE DEPARTMENT HAS PREFERRED AN APPEAL BEFORE THE HON'BLE ITAT. THE HON'BLE FTAT INDORE BENCH HAS PASSED A CONSOLIDATED ORDER IN THE CASE OF NARMADA EXTRUSION LTD. AND OTHER FAMILY MEMBERS OF MITTAL GROUP ON 30.12.2011. THE ASSESSEE IS ALSO ONE OF TH E -: 20: - 20 MEMBER OF MITTAL GROUP AND HIS APPEAL FOR THE A.Y. 2003-04 AND 2006-07 ON SIMILAR ISSUE REGARDING ADDITION U/S 68 IN RESPECT OF LOAN TAKEN FROM LUNKAD GROUP WAS ALSO DECIDED BY THE HON'BLE BENCH VIDE ITS ORDER DATED 30.12.2011 BEING IT NO'S . (SS) 79 AND 16/IND/2011. COPY OF SAID ORDER IS ENCLOSED FOR YOUR READY REFERENCE. 2.6.2] THAT HON'BLE BENCH HAS GIVEN ITS VERDICT IN PARA 20 OF ITS ORDER DATED 30.12.2011. THAT PARA 20 OF T HE ITAT ORDER READS AS UNDER-: PARA-20 OF ITAT ORDER '(20) AFTER ANALYZING ALL THE DOCUMENTS PLACED ON RECORD, WE FOUND THAT ADDITIONS HAVE BEEN MADE BY ASSESSING OFFICER IN RESPECT OF ALL THE LOANS WHICH EVEN THOUGH TAKEN AND REPAID BY ASSESSEE IN EARLIER YEARS STARTING FROM 1.4.2001. CONTENTION OF ASSESSING OFFICER WAS THAT SINCE THE ASSESSEE COULD NOT PRODUCE THE CREDITOR IN PERSON, THEREFORE, THE -: 21: - 21 CONFIRMATION AND THE AFFIDAVITS FILED BY THE CREDIT ORS CANNOT BE RELIED UPON. WE FOUND THAT ALL THE NECESSARY DOCUMENTARY EVIDENCE TO SUBSTANTIATE THE LOAN TRANSACTION HAVE BEEN FILED BY THE ASSESSEE, WHICH INDICATED RECEIPT AND REPAYMENT OF LOAN, PAYMENT OF INTEREST THEREON AND DEDUCTION OF TAX AT SOURCE IN RESPECT OF THE INTEREST PAID THEREON. IT APPEARS THAT DUE TO THE DISPUTE BETWEEN THE DEPARTMENT AND THE LUNKAD GROUP AND THE WRIT PETITION FILED BY LUNKAD GROUP IN THE HIGH COURT, ASSESSEE COULD NOT PERSUADE THE LUNKAD GROUP TO APPEAR IN PERSON BEFORE THE DEPARTMENT. IT IS ALSO NOT IN DISPUTE THAT NO INCRIMINATING DOCUMENT WAS FOUND BY DEPARTMENT IN ASSESSEE'S PREMISES EITHER DURING COURSE OF SEARCH OR ON SUBSEQUENT INQUIRY SUGGESTIN G ANY CASH GIVEN BY ASSESSEE TO LUNKAD GROUP IN CONSIDERATION OF LOANS SO TAKEN NOR RECEIPT OF ANY CASH WHENEVER THERE WAS REPAYMENT OF LOAN BY ASSESSEE TO LUNKAD GROUP. UNDER THESE CIRCUMSTANCES AND IN THE INTEREST OF JUSTICE, ONE M ORE -: 22: - 22 OPPORTUNITY SHOULD BE GIVEN TO ASSESSEE FOR PRODUCING THE LOAN CREDITOR FOR CONFIRMING THE CONTENTS OF CONFIRMATION AND AFFIDAVITS SO FILED. KEEPING IN VIEW INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SURVEY AT LUNKAD GROUP FOR THE PERIOD 1.4.2006 TO 1.5.2006 PERTAINING TO THE ASSESSMENT YEAR 2007-08, EVEN THOUGH RELATED TO ONE MONTH ONLY, THE DEPARTMENT WAS JUSTIFIED IN MAKING ADDITION IN THE HANDS OF THE ASSESSEE COMPANY IN THE ASSESSMENT YEAR 2007-08 BY DISBELIEVING THE LOAN TRANSACTIONS. AS PER OUR CONSIDERED VIEW, ADDITION SHOULD BE MADE WITH RESPECT TO THE AMOUNT OF CASH FOUND TO BE GIVEN BY THE ASSESSEE TO THE LUNKAD GROUP AS PER INCRIMINATING DOCUMENTS SO FOUND AT LUNKAD GROUP DURING SURVEY AFTER GIVING OPPORTUNITY TO ASSESSEE FOR CROSS EXAMINATION. MERE PRESUMPTIONS WITHOUT ANY MATERIAL ON RECORD TO THE EFFECT THAT EVEN IN RESPE CT OF ALL THE EARLIER YEARS, THE ASSESSEE MIGHT HAVE GIVE N CASH TO THE LUNKAD GROUP FOR GETTING UNSECURED LOAN , -: 23: - 23 IS NOT JUSTIFIED. ALL THE LOANS WERE RECEIVED BY ASSESSEE THROUGH ACCOUNT PAYEE CHEQUES AND ALSO REPAID THROUGH ACCOUNT PAYEE CHEQUES. ASSESSEE HAD ALSO FILED EVEN CONFIRMATION LETTERS AND AFFIDA VITS TO SUBSTANTIATE THE LOAN TRANSACTIONS. ONLY BECAUSE OF INCRIMINATING DOCUMENT PERTAINING TO PERIOD 1.4.2006 TO 1.5.2006, THE DEPARTMENT DOUBTED THE GENUINENESS OF ALL THE LOAN TRANSACTIONS PERTAINING TO PERIOD STARTING FROM 1.4.2001 TO 31.3.2007. BEFORE MAKING ADDITION OR DISALLOWING THE CASH CREDIT, ON THE PLEA OF GENUINENESS, THE DEPARTMENT IS REQUIRED TO BRING ON RECORD SOME EVIDENCE TO INDICATE THAT T HE ASSESSEE HAS PAID CASH IN CONSIDERATION OF THE CHEQUES SO ISSUED. WITHOUT ANY EVIDENCE, MUCH LESS A COGENT EVIDENCE, IT IS NOT LEGALLY JUSTIFIED TO D OUBT THE GENUINENESS OF LOAN TRANSACTION OR MAKE ADDITIO N IN THE HANDS OF THE ASSESSEE COMPANY FOR WHICH NO MATERIAL MUCH LESS A COGENT MATERIAL IS IN POSSESSI ON OF DEPARTMENT. IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THE GROUNDS RAISED BY THE ASSESSEE IN TH E -: 24: - 24 CROSS OBJECTION TO THE FILE OF THE ASSESSING OFFICE R FOR DECIDING AFRESH IN TERMS OF OUR ABOVE DISCUSSION AN D AS PER LAW. 2.6.3) THAT ON READING OF PARA 20 OF HON'BLE TRIBUNAL'S ORDER, YOU WILL FIND THAT HON'BLE BENCH HAS DISCUSS ED ALL THE CONTENTION OF THE AO AS WELL AS ASSESSEE AND HE LD THAT THE ASSESSEE HAD FILED ALL THE NECESSARY DOCUMENTAR Y EVIDENCE TO SUBSTANTIATE THE LOAN TRANSACTION WHICH INCLUDES RECEIPT AND REPAYMENT OF LOAN, PAYMENT OF INTEREST THEREON AND DEDUCTION OF TAX AT SOURCE IN RESPECT OF THE INTEREST PAID THEREON. HON'BLE BENCH FURTHER HOLD THAT NO INCRIMINATING DOCUMENT WAS FOUND BY DEPARTM ENT IN ASSESSEE'S PREMISES EITHER DURING COURSE OF SEAR CH OR ON SUBSEQUENT INQUIRY SUGGESTING ANY CASH GIVEN BY ASSESSEE TO LUNKAD GROUP IN CONSIDERATION OF LOANS SO TAKEN NOR RECEIPT OF ANY CASH WHENEVER THERE WAS REPAYMENT OF LOAN BY ASSESSEE TO LUNKAD GROUP. -: 25: - 25 2.6.4THAT HON'BLE BENCH IN PARA 20 ON PAGE NO 51 OF ITS ORDER HAS SET- ASIDE THE ORDER WITH A SPECIFIC DIRECTION, THE SAME IS AGAIN REPRODUCED HEREUNDER[ 04TH LINE NO FROM THE B OTTOM ON PAGE NO 52):- ' UNDER THESE CIRCUMSTANCES AND IN THE INTEREST OF JUSTICE, ONE MORE OPPORTUNITY SHOULD BE GIVEN TO ASSESSEE FOR PR ODUCING THE LOAN CREDITOR FOR CONFIRMING THE CONTENTS OF CONFIR MATION AND AFFIDAVITS SO FILED. KEEPING IN VIEW INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SURVEY AT LUNKAD GROUP F OR THE PERIOD FROM 1.4.2006 TO 1.5.2006 PERTAINING TO THE ASSESSMENT YEAR 2007-08, EVEN THOUGH RELATED TO ONE MONTH ONLY , THE DEPARTMENT WAS JUSTIFIED IN MAKING ADDITION IN THE HANDS OF THE ASSESSEE COMPANY IN THE ASSESSMENT YEAR 2007-08 BY DISBELIEVING THE LOAN TRANSACTIONS.' 2.6.5) THAT FROM THE ABOVE PARAS OF THE ORDER OF HON'BLE TRIBUNAL, IT IS QUITE CLEAR THAT THOUGH THE CASE WA S SET- ASIDE FOR CONFIRMING THE CONTENTS OF CONFIRMATION A ND AFFIDAVITS SO FILED BY THE CREDITORS IN RESPECT OF -: 26: - 26 INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SURVEY AT ITS PREMISES, HOWEVER WITH A LIMITED DIRECTION A ND PERIOD PERTAINING TO THE PERIOD 01.4.2006 TO 01.05. 2006 ONLY. THUS, EVEN IN CASE IF THE LOAN CREDITOR IS NO T PRODUCED IN PERSON, IN THAT CASE ALSO THE AMOUNT RELATED TO SAID PERIOD I.E FROM 01.04.2006 TO 01 05.2006 CAN ONLY B E ADDED TO THE INCOME OF THE ASSESSEE AND NOT BEYOND IT. FURTHER THE SAID AMOUNT BE ADDED ONLY AFTER PROVING THE NAME ' NARMADA AS RELATES TO M/S NARMADA EXTRUSIONS P LIMITED. 2.6.6) THE ASSESSEE HAS SOUGHT CLARIFICATION BY FILING AN M.A. IN THIS REGARD AS TO WHAT WILL BE THE POSITION IN THIS REGARD IN THE CASE OF OTHER ASSESSEE SINCE THE APPE AL WAS COMMONLY DECIDED BY THE HON'BLE BENCH. 2.6.7) THE HON'BLE [TAT VIDE ITS M.A. ORDER DT. 01.05.2012 HAS CLARIFIED THE SAID POSITION AND GIVEN ITS FINDI NG IN THIS REGARD IN PARA 22. THAT AS PER PARA 22 OF THE M.A. ORDER, THE HON'BLE BENCH HAS DIRECTED THE A.O. THAT IN THE CASE OF OTHER INDIVIDUAL, HUFS/FIRMS OF MITTAL GROUP (WRONG LY WRITTEN IN THE ORDER AS LUNKAD GROUP), IF THEIR NAM E FIND -: 27: - 27 PLACE IN THE SEIZED DOCUMENTS/CASH BOOK FOUND DURIN G THE SURVEY AT LUNKAD GROUP, THE ADDITION IS TO BE MADE IN ASST. YEAR 2007-08 IN THE RESPECTIVE HANDS AFTER PR OVIDING DUE OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSE E. 2.6.8) THAT ON READING THE M.A. ORDER ALONG WITH THE ORIGI NAL ORDER PASSED BY THE HON'BLE BENCH IN NARMADA GROUP, IT IS QUITE CLEAR THAT ISSUE RELATED TO ADDITION MADE BY THE A.O. U/S 68 IN RESPECT UNSECURED LOAN TAKEN FROM LU NKAD GROUP REQUIRES TO BE RESTRICTED TO ONE MONTH ONLY I .E FROM 01-04-2006 TO 02-05-2006 I.E. FOR THE A.Y. 2007-08 AND NOT BEYOND THAT. 2.7] THE LD. A. O. WHILE COMPLETING THE SET-ASIDE P ROCEEDINGS IN THE CASE OF ASSESSEE HIMSELF FOR THE A.Y. 2003-04 A ND 2006-07 HAS RECORDED THE STATEMENT OF SHRI SANJEEV LUNKAD O N BEHALF OF LUNKAD GROUP OF COMPANIES AND ACCEPTED THE AMOUNT O F UNSECURED LOAN TAKEN FROM LUNKAD GROUP OF COMPANIES AS GENUINE. COPY OF STATEMENT OF SHRI SANJEEV LUNKAD A S RECORDED DURING THE COURSE OF SET- ASIDE PROCEEDING AND COPI ES OF SET- ASIDE ORDER AS PASSED BY ACTT 2(1) INDORE ON 04.01. 2013 FOR -: 28: - 28 THE ASSESSMENT YEARS 2003-04 AND 2006-07 ARE ENCLOS ED FOR YOUR KIND REFERENCE. 2.8] THE PRESENT APPEAL IS FOR THE ASST YEAR 2004-05 FOR WHICH NO DOCUMENTS WERE FOUND AND SEIZED EVEN DURING THE COURSE OF SURVEY. THE ASSESSEE HAD FILED THE COMPLETE SET OF PAPERS AND SHRI SANJEEV LUNKAD DIRECTOR OF THE LUNKAD GROUP OF COMPANIES ALSO PERSONALLY APPEARED BEFORE THE ASSESSING OFFIC ER DURING THE SET- ASIDE PROCEEDING AND CONFIRMING THE CONTENT OF LOAN CONFIRMATION AND AFFIDAVIT. THE LOAN AS TAKEN FROM LUNKAD GROUP OF COMPANIES WERE DULY ACCEPTED AS GENUINE IN ALL THE CASES OF NARMADA. 'EXTRUSIONS LIMITED AND INDIVIDUA L FAMILY MEMBERS OF MITTAL GROUP WHICH INCLUDES , ASSESSEE A LSO. THUS, THE SAID ISSUE NOW STAND SETTLED IN FAVOUR OF THE A SSESSEE. 2.9] THAT IN VIEW OF THE ABOVE , FOLLOWING THE DIRECTIO NS OF THE HON'BLE ITAT AND SET-ASIDE ORDER AS PASSED IN THE C ASE OF THE ASSESSEE ITSELF, THE AMOUNT OF LOAN AS RECEIVED BY THE ASSESSEE FROM LUNKAD GROUP OF COMPANIES NOW REQUIRES TO BE A CCEPTED. IT IS THEREFORE SUBMITTED THAT ADDITION OF RS 6,00,000 / - MADE TO THE INCOME OF THE ASSESSEE U/S 68 OF THE INCOME TAX ACT IS DELETED. -: 29: - 29 10. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE CIT(A) IN HIS ORDER HAS DELETED THE ADDITI ON ON THE GROUND THAT THE I.T.A.T., INDORE BENCH HAS PASSED T HE ORDER IN THE CASE OF NARMADA EXTRUSIONS LIMITED AND OTHER FA MILY MEMBERS OF THE MITTAL GROUP ON 13.12.2011 AND THE A SSESSEE IS ALSO ONE OF THE BENEFICIARIES OF MITTAL GROUP AN D IN THE APPEAL FOR ASSESSMENT YEAR 2003-04 AND 2006-07, THE TRIBUNAL HAS DECIDED THE APPEAL AND THE TRIBUNAL HA S ANALYZED ALL THE DOCUMENTS. THEREAFTER, THE MATTER WAS RESTORED TO THE AO BY THE TRIBUNAL AND AFTER THAT I N SET-ASIDE PROCEEDINGS, THE LD. CIT(A) HAS ACCEPTED THAT THESE LOANS ARE GENUINE. THEREFORE, THE LD. CIT(A) HAS DELETED THE ADDITION OF RS. 12 LAKHS AND RS. 6 LAKHS ON ACCOUNT OF UNSECU RED LOANS. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMISSED . C.O.NO.107/IND/2013 : 11. DURING THE COURSE OF HEARING THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT IF THE DEPARTMENTS A PPEAL IS DISMISSED, THEN HE WILL NOT PRESS FOR CROSS OBJECTI ON. IN VIEW OF THIS, WE DISMISS THE CROSS OBJECTION. -: 30: - 30 12. IN THE RESULT, THE APPEAL OF THE REVENUE AND CROSS OBJECTION BOTH ARE DISMISSED. 13. SINCE THE GROUNDS ARE COMMON AND FACTS BEING SIMILA R IN ALL THE ABOVE-CAPTIONED APPEALS, IN VIEW OF FOREGOI NG DISCUSSIONS IN I.T.A.NO. 505/IND/2013 IN THE CASE O F SHRI PRAVIN MITTAL, WE DISMISS ALL THE APPEALS AND CROSS OBJECTIONS. 14. IN THE RESULT, ALL THE APPEALS OF THE REVENUE AS WE LL AS CROSS OBJECTIONS ARE DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 29 TH SEPTEMBER, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED 29 TH SEPTEMBER, 2015. CPU* 268
