Renu Verma, New Delhi, V. DCIT, Cir 36(1), Delhi

ITSSA 84/DEL/2007

AI Insights

The case involves Renu Verma, who was accused of not disclosing income from the sale of shares during a block assessment period. The Income Tax Department initiated proceedings under section 158BD of the Income Tax Act, 1961, following a search and seizure operation related to another individual, Manoj Aggarwal. The Assessing Officer treated the amount received from the sale of shares as undisclosed income due to lack of evidence on the genuineness of the transactions. Renu Verma contested this decision, arguing that the shares were disclosed in her Wealth Tax Return and the transactions were genuine. The Tribunal, after considering the evidence and submissions, ruled in favor of the assessee, allowing her appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131064 (ITAT-DELHI)
• Duration Of Justice: 15 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 21-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 29-11-2022
• Assessment Year: misc
• Appeal Filed On: 29-03-2007
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Accommodation entries
• Section: 131; 158BD

Judgement Text

Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’, NEW DELHI Before Dr. B. R. R. Kumar, Accountant Member Sh. Yogesh Kumar US, Judicial Member IT(SS)A No.84/Del/2007 Block Period : 01.04.1990 to 03.08.2000 Renu Verma, A-75, Preet Vihar, Delhi-110092 Vs DCIT, Circle-36(1), New Delhi (APPELLANT) (RESPONDENT) PAN No. ABMPV3341A Assessee by : None Revenue by : Sh. T. Kipgen, CIT DR Date of Hearing: 30.11.2022 Date of Pronouncement: 22.02.2023 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by the assessee against the order of the ld. CIT(A)-XXVIII, New Delhi dated 04.10.2006. 2. The assessee has raised the following grounds of appeal: “1.That the Ld. A.O. erred in law as well as on facts in invoking the provisions of sec. 158BD. 2. That the order of the Ld. A.O. is based on conjectures, surmise and suspicion and without considering the relevant material on records. 3. That on facts and circumstances and legal position of the case the various observation made by the Ld. AO are denied and are contrary to facts. 4. That the addition of Rs. 1498599/- is against the principal of natural justice as no opportunity to cross examine with regard to sale of UTI shares was afforded to the appellant. Page | 2 5. That addition of Rs. 29971/- on account of commission @ 2% on sale of share in also not justifiable. 6. That the Ld. CIT (Appeal) has not considered the facts and documents produced before him. 7. That the Ld. CIT (A) denied to cross examine Mr. Manoj Aggarwal inspite of the request made by the assessee at the time of hearing of the case. 8. That the assessee reserve the right to add, modify, alter and delete in any of the above mentioned grounds of appeal.” 3. The assessee filed appeal before the Tribunal on 02.07.2007 and hearings have been held at different dates. None attended on behalf of the assessee and the department was represented Ms. Y Kakkar, Sr. DR. Date Appearing on behalf of assessee Appearing on behalf of revenue Remarks 17.06.2008 None Ms. Y Kakkar, Sr. DR 17.06.2008 Order passed 12.01.2008 Order Recalled 09.04.2009 Sh. P. Roy Chaudhari, Adv Durga Charan Dass, CIT DR 17.04.2009 Order passed 15.05.2015 Hon’ble Delhi High Court vide dated 30.01.2015 directed the Tribunal to rehear the matter. In pursuance to the impugned order the Hon’ble Vice President vide direction order dated 10.04.2015 directed to re-fix the matter. 20.07.2015 Hearing adjourned to 10.11.2015 10.11.2015 Hearing adjourned as the bench was not functioning 08.03.2016 Hearing adjourned to 22.06.2016 on request of ld AR 22.06.2016 Adjourned to 18.07.2016 18.07.2016 Adjourned to 02.08.2016 on request of ld AR 02.08.2016 Hearing adjourned to 27.10.2016 on written request of ld Page | 3 AR 27.10.2016 Hearing adjourned as the bench did not function 19.01.2017 None Sh. H. B. S. Gill, CIT DR Order passed on 20.01.2017 17.01.23017 Vide MA No. 481/Del/2017 order recalled 24.10.2020 None Smt. Susma Singh, CIT DR Adjourned to 23.02.2021 23.01.2021 None Adjourned to 19.04.2021 19.04.2021 None Ms. Sushma Singh, CIT DR Adjourned to 30.06.2021 30.06.2021 None Fatima Khan, Sr. DR Adjourned to 07.09.2021 07.09.2021 None Ms. Kirti Samkratyaya, Sr. DR Adjourned to 27.10.2021 27.10.2021 Sh. Shahid, Assistant S. Munesh Kumar, CIT DR Adjourned at the request of ld AR to 23.12.2021 23.12.2021 Adjourned as bench did not function 02.03.2022 None Sh. T. Kipgen, CIT DR Adjourned to 11.05.2022 11.05.2022 None Sh. T. Kipgen, CIT DR Hearing adjourned to 01.06.2022 as partheard 01.06.2022 Adjourned to 21.06.2022 21.06.2022 No one appeared on behalf of the assessee, appeal released. Adjourned to 13.09.2022 for fresh hearing in regular bench 13.09.2022 Bench did not function, adjourned to 28.11.2022 28.11.2022 None Sh. T. Kipgen, CIT DR Adjourned to 30.11.2022 30.11.2022 None Sh. T. Kipgen, CIT DR Kept for orders 4. This clearly shows the recalcitrant attitude of the assessee towards the appeal filed which can only be considered that the assessee is no more interested in pursuing the appeal. Hence, it is decided to adjudicate the issue based on the record available before us. Page | 4 5. Facts pertinent are that Ms. Renu Verma, the assessee was running the proprietary firm in the name and style of M/s Advance Semi-conductor which was manufacturing chips on board. A search & seizure operation was conducted u/s 132 of the Income Tax Act, 1961 was conducted in the case of Sh. Manoj Aggarwal, R/o C-25/2, Baldev Park and M/s Friends Portfolio Pvt. Ltd. a company having registered office at 7/22, Ansari Road, Darya Ganj, New Delhi on 03.08.2000. The assessment u/s 158 BC of M/S Friends Portfolio Pvt. Ltd. has been completed on 29.08.2002. 6. During the assessment proceeding, the Assessing officer observed that documents found during search and inquiries Mr. Manoj Kumar has been given bogus accommodation entries to various persons. This business of providing accommodation entries was arranged through a net work of mediators who worked on behalf of the actual beneficiaries. The DCIT, Central Circle-3, New Delhi has informed vide letter No. F.No. DCIT/CC-3/2002-03/582 dated 23.01.2003 to the ITO Ward-36(2), that Smt. Renu Verma, 317, FIE, Patparganj, Delhi - 92 has received a total amount of Rs.14,98,599/- (vide Ch. No. 968336 Rs. 8,00,897/- and Vide Ch. 969834 Rs. 1,97,472/- and Rs. 5,00,255/- on dated 26.04.2000) drawn on a/c No. 1224 Vijaya Bank, Friends Portfolio Pvt. Ltd. In this regard Ld. DCIT, Central Circle-3 observed that the above Rs. 14,98,599/- constitutes the undisclosed income of Smt. Renu Verma. Here, DCIT assumed that Mrs. Renu Verma has repaid the money which was received through above mentioned cheque. On the basis of information received from DCIT, Central Circle -3, proceedings u/s 158BD was initiated and notice was issued on 18.07.2003 and served Page | 5 on 13.08.2003 asking her to file the return for the block period within 15 days of receipt of this notice. In response to the notice, assessee filed return of income on dated 31.08.2005 vide acknowledgement No. 3601000190. A detailed questionnaire along with statutory notice u/s 142(1) was issued to the assessee on 19.07.2005. In response to the specific query AR filed three replies dated 25.07.2005 and 10& 16.08.2005. Later summons u/s 131 of the IT. Act, 1961 was issued and served on 25.07.2005. In response to the above, assessee personally appeared on 29.08.2005 and recorded statement on oath which was concluded on the same day. 7. The assessee has sold the shares to M/S Friends Portfolio Pvt. Ltd. and received Rs. 14,98,599/- against the sale of these shares. Copies of the sale receipts pertaining to the period in which M/S Friends Portfolio Pvt. Ltd. have been submitted before the AO. 8. The Assessing Officer treated this amount as undisclosed income of the assessee on the ground that the assessee has not disclosed the above amount in his return of income and has not submitted confirmation from the broker for the sale and purchase of the shares and neither the address and identity of the share broker was proved which could establish the genuinity of the transaction. 9. The assessee filed an appeal against the Assessment Order which was dismissed by Ld. CIT (Appeal) 10. Aggrieved, the assessee filed appeal before the Tribunal. Page | 6 11. In the instant case, the allegation of the revenue was that the assessee has not filed any return and the transactions were never reflected. It was submitted before the ld. CIT(A) that the assessee had disclosed these shares in her wealth tax return for the Assessment Year 1998-99 and the same was assessed u/s 16(3) of the Wealth Tax Act. It was explained that the cheque was issued to the assessee by M/s. Friends Portfolio P. Ltd. against the sale of these shares. To prove that the assessee was holding the shares and that she was a regular income-tax assessee, the assessee had produced copies of balance sheet, copies of bank account and copy of the order under the W.T. Act before the Assessing Officer showing investment of Rs. 18,40,391/-. These papers establish the fact that the assessee was holding these shares for quite some time. 12. The Assessing Officer has made addition on the ground that no details of the sale of shares have been given in the relevant Assessment Year (2000-01) or even in the later Assessment Years. It is also noticed that the assessee had failed to establish that the shares shown in the Assessment Year 1998-99 were the same which have been later sold by her. In fact, a perusal of the Assessment Order for the Assessment Year 1998-99 passed u/s 16(3) shows a narration “investment in shares Rs. 18,40,391/-”. However, the AO held that no break-up of the shares has been given. The AO held that the contract notes issued by the M/s. Friends Portfolio P. Ltd. shows sale of UTI Master Plus/Master Gain/Master Growth. 13. In the peculiar facts and circumstances of the instant case, it can be conveniently held that the investments sold Page | 7 were part of the investment in shares of Rs. 18,40,391/- as declared in the Wealth Tax Return and were also accepted by the Revenue, hence, we hold that no further addition is called for. 14. In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 22/02/2023. Sd/- Sd/- (Yogesh Kumar US) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 22/02/2023 *Subodh Kumar/AK, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR