A.C.I.T.-4(1), Agra V. Sh. Ram Prakash Garg, HUF, Agra

MA 31/AGR/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 1223 (ITAT-AGRA)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-12-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 02-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Assessee Lawyers: MAHESH AGARWAL
• Keywords: Sham transactions
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER M.A. NO. 31/AGRA/2013 (IN ITA NO. 238/AGRA/ 2011) ASSESSMENT YEAR 2002-03 A.C.I.T. 4(1), VS. SHRI RAM PRAKASH GARG, HUF AGRA. C/O M/S PRAKASH COLD STORAGE, HATHRAS ROAD, AGRA (PAN AAEHR 5424 H) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.K. MISHRA, JR. D.R. RESPONDENT BY : SHRI MAHESH AGARWAL, C.A. DATE OF HEARING : 20.12.2013 DATE OF PRONOUNCEMENT : 20.12.2013 ORDER PER BHAVNESH SAINI, JUDICIAL MEMBER THIS M.A. IS FILED BY THE REVENUE DEPARTMENT AGAINS T THE ORDER OF THE TRIBUNAL DATED 22.03.2013 IN ITA NO. 238/AGRA/2013 FOR A.Y. 2002-03. 2. THE SUBMISSIONS OF THE PARTIES AND FINDINGS OF T HE TRIBUNAL IN THIS ORDER IN PARA NOS. 3 TO 6 ARE REPRODUCED AS UNDER:- M.A NO.31/AGRA/2013 IN ITA NO.238/AGRA/2011 A.Y. 2002-03 2 3. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITTED THAT THE FACTS ARE IDENTICAL AS IN THE CASE OF SHRI RAJE SH KUMAR GARG DECIDED BY THE ITAT, AGRA BENCH IN ITA NO. 182 OF 2 006. HE HAS SUBMITTED A CHART AT PAGE-C OF THE PAPER BOOK TO SH OW THAT NAME OF THE COMPANY AND THE BROKERS INVOLVED IN THE CASE OF ASSESSEE AND SHRI RAJESH KUMAR GARG ARE SAME WHICH ARE ALSO NOTED IN THE CASE OF SAME ASSESSEE AND IN CASE OF SHRI RAJES H KUMAR GARG, THE MATTER WAS FAVOURABLY DECIDED BY THE LD. JUDICIAL MEMBER. COPY OF THE ORDER IS PLACED AT PAGES 29 TO 49 OF THE PAPER BOOK. THE LD. COUNSEL FOR THE ASSESSEE ALSO D EMONSTRATED FROM THE ORDER OF THE TRIBUNAL THAT THE PARTIES ARE SAME AS ARE IN THE CASE OF ASSESSEE. THEREFORE, TRANSACTIONS ARE I DENTICAL IN WHICH THE LD. ACCOUNTANT MEMBER DISAGREED WITH THE CASE OF THE ASSESSEE. COPY OF THE ORDER OF LD. AM IS FILED AT P AGE 11 OF THE PAPER BOOK. THE MATTER WAS REFERRED TO THE PRESIDEN T, ITAT FOR NOMINATION OF THIRD MEMBER AND THE THIRD MEMBER (VP ) AGREED WITH THE VIEW OF THE LD. JM VIDE ORDER DATED 30.08. 2011. COPY OF THE ORDER OF THIRD MEMBER IS FILED AT PAGE 3 OF THE PAPER BOOK AND IN VIEW OF THE MAJORITY VIEW, ITAT, AGRA BENCH VIDE ORDER DATED 11.10.2011 PASSED ORDER IN FAVOUR OF THE ASSE SSEE SHRI RAJESH KUMAR GARG IN ITA NO. 182/2006. HE HAS SUBMI TTED THAT THEREAFTER ITAT, AGRA BENCH IN THE CASE OF ACIT VS. RAM PRAKASH GARG IN ITA NO. 237/AGRA/2011 ON THE SAME I DENTICAL FACTS DISMISSED THE DEPARTMENTAL APPEAL VIDE ORDER DATED 18.01.2013 IN WHICH IN PARAS 5 & 6, THE FINDINGS OF THE TRIBUNAL ARE REPRODUCED AS UNDER : 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND T HE MATERIAL ON RECORD AND DO NOT FIND ANY JUSTIFICATIO N TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) IN DELETING THE AD DITION. THE AO, ON THE FACTS OF THE CASE FOUND THAT SIMILAR ISSUE H AVE BEEN CONSIDERED IN THE CASE OF HUF OF ASSESSEE AND OTHER FAMILY MEMBERS SHRI RAJESH KUMAR GARG AND SMT. SEEMA GARG WHO HAVE ALSO SHOWN LONG-TERM CAPITAL GAINS OF THE SIMI LAR NATURE OF THE SAME BROKER AND OF THE SAME SCRIP IN THE ASSESS MENT YEAR UNDER APPEAL, WHICH WERE FOUND TO BE BOGUS BY THE A O AND ADDITIONS HAVE BEEN CONFIRMED BY THE LD. CIT(A) AS WELL. HOWEVER, THE LD. COUNSEL FOR THE ASSESSEE FILED COP Y OF THE TRIBUNAL ORDER IN THEIR CASES DATED 31.03.2009 IN W HICH THE M.A NO.31/AGRA/2013 IN ITA NO.238/AGRA/2011 A.Y. 2002-03 3 ITAT, AGRA BENCH DELETED THE SIMILAR ADDITIONS AND NO RELIANCE WAS PLACED ON THE STATEMENT OF SHRI MUKESH GUPTA AN D HIS WIFE. THE ORDER OF THE TRIBUNAL HAS BEEN CONFIRMED BY THE HONBLE ALLAHABAD HIGH COURT VIDE ORDER DATED 15.02.2011. I N THE AFORESAID DECISION, IT WAS FOUND THAT THOSE ASSESSE ES HAD OBTAINED SHARES IN PREFERENTIAL ALLOTMENT DIRECTLY FROM THE COMPANIES AND THE PURCHASES DECLARED IN THE BALANCE SHEET OF EARLIER YEARS, WHICH WERE ACCEPTED BY THE DEPARTMEN T. SHARES WERE SOLD TO THE REGISTERED STOCK BROKERS AND STOCK EXCHANGE. BROKERS HAVE CONFIRMED THAT MONEY WAS GIVEN THROUGH DRAFT. HONBLE ALLAHABAD HIGH COURT, THEREFORE, ON CONSIDE RATION OF THESE RELEVANT CONSIDERATIONS, CONFIRMED THE FINDIN GS OF THE TRIBUNAL THAT THE SALES ARE NOT SHAM TRANSACTIONS. ACCORDING TO THE AO, THE FACTS OF THESE CASES ARE IDENTICAL TO T HE CASE OF THE ASSESSEE, THEREFORE, WHEN IN THE IDENTICAL CASES OF THE FAMILY MEMBERS OF THE ASSESSEE, ADDITIONS HAVE BEEN DELETE D BY THE TRIBUNAL AND THE ORDER OF THE TRIBUNAL HAVE BEEN CO NFIRMED BY ALLAHABAD HIGH COURT, THEREFORE, ON SUCH REASON ITS ELF, THE DEPARTMENTAL APPEAL IS LIABLE TO BE DISMISSED. FURT HER, THE ASSESSEE HAS FILED PROPER EVIDENCES BEFORE THE AUTH ORITIES BELOW TO SHOW THAT SHARES OF M/S. B.T. TECHNET LTD. WERE ALLOTTED DIRECTLY BY THIS COMPANY @ 10/- PER SHARE AND CONSI DERATION WAS TRANSFERRED THROUGH BANKING CHANNEL. ALL THE ALLOTM ENT LETTERS, DRAFTS, CERTIFICATES OF THE COMPANY ARE FILED IN TH E PAPER BOO;. THE PROFILE OF M/S. B.T. TECHNET IS ALSO FILED IN T HE PAPER BOOK TO SHOW THAT IT WAS A GENUINE COMPANY. THE SAME WERE S HOWN IN THE BOOKS OF EARLIER YEARS. THEREFORE, THE PURCHASE OF SHARES AND SOURCE OF PURCHASE COULD NOT HAVE BEEN DISPUTED. SA ME SHARES WERE SOLD TO THE BROKER, M/S. CMS SECURITIES LTD. D ELHI AND ALL THE CONTRACT NOTES, SALE CONSIDERATION THROUGH DRAF TS HAVE BEEN FILED IN THE PAPER BOOK TO SUPPORT THE CONTENTION O F THE ASSESSEE. THE SALE RATE OF RS.114/- PER SHARE IS ALSO SUPPORT ED BY THE INFORMATION RECEIVED FROM M.P. STOCK EXCHANGE. WHAT EVER STATEMENTS OF CMS SECURITIES LTD. THROUGH THEIR DIR ECTORS WERE RECORDED WERE NEVER CONFRONTED TO THE ASSESSEE. THE REFORE, THE SAME CANNOT BE READ IN EVIDENCE, WHICH IS ALSO SUBS TANTIATED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F KISHAN CHAND CHELARAM VS. CIT, 125 ITR 713. CONSIDERING TH E TOTALITY M.A NO.31/AGRA/2013 IN ITA NO.238/AGRA/2011 A.Y. 2002-03 4 OF FACTS AND CIRCUMSTANCES, IN THE LIGHT OF THE DEC ISION OF THE JURISDICTIONAL ALLAHABAD HIGH COURT IN THE GROUP CA SES ABOVE, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDITION. THE ASSESSEE O N THE BASIS OF EVIDENCE AND MATERIAL ON RECORD HAS BEEN ABLE TO PR OVE THAT HE HAS RECEIVED ENTIRE SALE CONSIDERATION OF SHARES TH ROUGH KNOWN SOURCES. THEREFORE, NO ADDITION U/S. 68 COULD BE MA DE AGAINST THE ASSESSEE. AS A RESULT, THE DEPARTMENTAL APPEAL FAIL S AND IS DISMISSED. 6. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. 4. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUB MITTED THAT THE ISSUE IS SQUARELY COVERED BY THE ORDER OF ITAT THIRD MEMBER IN THE CASE OF RAJESH KUMAR GARG (SUPRA) AND IN THE CASE OF RAM PRAKASH GARG (SUPRA). THE LD. DR DID NOT DISPUTE TH E ABOVE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY ORDER OF ITAT, AGRA BENCH IN THE CASE OF RAJESH KUMAR GARG AND IN THE CASE OF RAM PRAKASH GARG (SUPRA). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL. THE LD. COUNS EL FOR THE ASSESSEE HAS BEEN ABLE TO DEMONSTRATE THAT THE FACT S ARE SAME IN THE CASE ASSESSEE AS WERE CONSIDERED IN THE CASE OF RAJESH KUMAR GARG. PAGE-C OF THE PAPER BOOK IS FILED WHICH SUPPORTS THE CLAIM OF THE LD. COUNSEL FOR THE ASSESSEE. NAME OF THE COMPANY AND THE BROKERS INVOLVED FOR SALE OF THE SH ARES ARE SAME AS WERE IN THE CASE OF RAJESH KUMAR GARG (SUPRA) AN D IN THE IDENTICAL FACTS, ITAT, THIRD MEMBER BENCH IN THE CA SE OF RAJESH KUMAR GARG IN ITA NO. 182/2006 (SUPRA) ALLOWED THE CLAIM OF THE ASSESSEE. THE THIRD MEMBER DECISION IS LIKE A D ECISION OF SPECIAL BENCH AND THEREFORE BINDING ON SUBSEQUENT B ENCHES OF THE TRIBUNAL. SIMILAR VIEW IS TAKEN BY THE ITAT, AG RA BENCH IN THE CASE OF RAM PRAKASH GARG (SUPRA). WE, THEREFORE , FOLLOWING THE ABOVE ORDERS, CONFIRM THE ORDER OF THE LD. CIT( A) IN DELETING THE ADDITION. THE LD. DR ALSO DID NOT DISPUTE THE C ONTENTION OF THE M.A NO.31/AGRA/2013 IN ITA NO.238/AGRA/2011 A.Y. 2002-03 5 LD. COUNSEL FOR THE ASSESSEE. THEREFORE, THE DEPART MENTAL APPEAL HAS NO MERIT AND IS ACCORDINGLY DISMISSED. 6. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMI SSED. 3. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY MISTAKE APPARENT ON THE RECORD OF THE TRIBUNAL. LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING OF THE DEPARTMENTAL APPEAL RELIED U PON THE DECISION OF THE ITAT, THIRD MEMBER, IN THE CASE OF RAJESH KUMAR GAR GH AND IN THE CASE OF RAM PRAKASH GARGH AND IT WAS CLAIMED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. LD. D.R. DID NOT DISPUTE THAT CONTENT ION AT THE TIME OF HEARING OF THE MAIN APPEAL. 4. NOW, IN THE PRESENT MISCELLANEOUS APPLICATION, T HE REVENUE HAS CONTENDED THAT IN THE SIMILAR CASE ITAT VIDE ORDER DATED 20.07.2012 IN ITA NO.258/AGRA/2011 AND C.O. NO.53/AGRA/2011 HAS RESTO RED THE ISSUE TO THE FILE OF THE CIT(A) FOR RECONSIDERATION. COPY OF SUCH ORD ER IS PLACED ON RECORD, WHICH REVEALED THAT IN ITA NO.258/AGRA/2011 WHEN NO FINDING OF FACT WAS GIVEN, THE MATTER WAS RESTORED TO THE FILE OF THE C IT(A). THIS ORDER, THEREFORE, WILL NOT HELP THE REVENUE IN ANY WAY TO SUPPORT THE MISCELLANEOUS APPLICATION BECAUSE MATERIAL FACTS ARE TOTALLY DIFFERENT, FROM THOSE GIVEN IN THIS CASE. IT IS WELL SETTLED LAW THAT ONCE THE ORDER IS PASSED ON M ERIT, TRIBUNAL HAS NO JURISDICTION TO REVIEW ITS OWN ORDER ON MERIT. WE R ELY UPON THE DECISIONS OF M.A NO.31/AGRA/2013 IN ITA NO.238/AGRA/2011 A.Y. 2002-03 6 HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. EA RNEST EXPORT LTD., 323 ITR 577 AND HONBLE M.P. HIGH COURT IN THE CASE OF AGARWAL WAREHOUSING AND LEASING VS. CIT, 257 ITR 235. 5. CONSIDERING THE ABOVE, WE DO NOT FIND ANY MISTAK E APPARENT ON RECORD. M.A. OF THE REVENUE IS ACCORDINGLY DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (PRAMOD KUMAR) (BHAV NESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER AMIT/ COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, AGRA TRUE COPY