ITO, Ward- I(5), Faridabad V. Mohini Goel, Delhi

MA 691/DEL/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9351 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 10 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 14-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Documents seized; Capital Gains
• Section: 143(3); 254(2); 68

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH FRIDAY/SMC: NEW DELHI BEFORE SHRI R.K.PANDA, ACCOUNTANT MEMBER MA NO. 691/DEL/2019 (IN ITA NO.2024/DEL/2018) ASSTT. YEAR: 2014-15 O R D E R PER R.K. PANDA, AM : THIS MISCELLANEOUS APPLICATION FILED BY THE REVENUE ARISES OUT OF THE ORDER OF THE TRIBUNAL DATED 25 TH SEPTEMBER, 2018. THE REVENUE THROUGH THIS MISCELLANEOUS APPLICATION HAS REQUESTED THE TRIBUNAL TO RECTIFY CERTAIN MISTAKES THAT HAVE CREPT IN THE ORDER OF THE TRIBUNAL. 2. LD. SR. DR REFERRING TO THE BRIEF FACTS OF THE CASE AND REASONS FOR FILING THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE DREW THE ITO, WARD -1(5) FARIDABAD. VS. SMT. MOHINI GOEL, H.NO. 1851, SECTOR -16, FARIDABAD. PAN AYQPG2481B (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI KAPIL GOEL, ADVOCATE ASSESSEE BY : SHRI VIPUL KASHYAP, SR. DR DATE OF HEARING 18/12 /20 20 DATE OF PRONOUNCEMENT 24/02/2021 2 ATTENTION OF THE BENCH TO THE CONTENTS OF THE SAME WHICH READ AS UNDER :- BRIEF FACTS OF THE CASE AND REASON FOR FILING OF MVGISCELLANEOUS APPLICATION 1. IN THIS REGARD THE BRIEF FACT OF THE CASE ARE THAT THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 26.12.2014 DECLARING TOTAL INCOME OF RS.3,97,890/- AFTER CLAIMING DEDUCTION UNDER CHAPTER VL-A. THE CASE OF THE ASSESSEE WAS ASSESSED U/S 143(3) VIDE ORDER DATED 26.12.2016 AT AN INCOME OF RS. 24,86,639/-ON ACCOUNT OF ADDITION MADE U/S 68/69 AT RS. 20,88749/- DISALLOWING EXEMPTION CLAIMED U/S 10(38) OF THE IT ACT, 1961 ON LONG TERM CAPITAL GAIN ON SALE OF PENNY STOCK OF M/S UNNO INDUSTRIES LTD. 2. AGGRIEVED BY THE SAID ORDER, THE ASSESSEE FILED APPEAL BEFORE LD.CIT(A), FARIDABAD. LD CIT(A), FARIDABAD DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), FARIDABAD, THE ASSESSEE FILED APPEAL BEFORE THE FLON'BLE ITAT. THE HON'BLE ITAT IN ITS COMPOSITE ORDER DATED 25.09.2018 ALLOWED THE APPEAL OF THE ASSESSEE BY HOLDING THAT THE FACTS OF THE INSTANT CASE ARE IDENTICAL TO THE FACTS OF THE CASES DECIDED BY THE HON'BLE PUNJAB & HARYANA HIGH COURT AND THE DELHI AND KOLKATA BENCHES OF THE TRIBUNAL, THEREFORE, FOLLOWING THE ABOVE DECISIONS, SET-ASIDE THE ORDER OF THE LD.CIT(A) AND DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION MADE U/S 68 OF THE IT ACT. IT IS FURTHER HELD THAT AS FAR AS THE DECISION RELIED ON BY ID. DR ARE CONCERNED, THEY ARE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 3 3. HONBLE ITAT HAS DECIDED THE ISSUE IN FAVOR OF ASSESSEE BY RELYING ON HON'BLE PUNJAB & HARYANA HIGH COURT DECISION IN THE CASE OF SH. PREM PAL GANDHI AND COORDINATED BENCH OF TRIBUNAL IN THE CASE OF M/S SHIKHA DHAWAN AND KOLKATA BENCH OF TRIBUNAL IN THE CASE OF SH. PRAKASH CHAND BHUTORIA. HOWEVER, THE ORDER OF LD. ITAT IS NOT ACCEPTABLE DUE TO FOLLOWING REASONS: (I) HON'BLE ITAT HAS RELIED UPON THE CASE LAW OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SH. PREM PAL GANDHI. THE CASE IS ENTIRELY DISTINGUISHABLE TO THE PRESENT CASE. THE CASE RELATED TO AY 2006-07 AND WAS NOT BASED ON CONCRETE EVIDENCE BUT MERELY ON SUSPICIOUS BASE. IN THE INSTANT CASE THE EVIDENCE IS BASED ON STATEMENT RECORDED DURING SEARCH AND SURVEY ACTIONS AT THE PREMISES OF OPERATORS OF THE COMPANIES INCLUDING M/S UNNO INDUSTRIES LTD. IN THE PRESENT CASE THERE IS PLETHORA OF EVIDENCES TO SUGGEST THAT THE COMPANY M/S UNNO INDUSTRIES LTD. WAS ENGAGED IN PROVIDING BOGUS LTCG IN THE SHAPE OF INCRIMINATING DOCUMENTS SEIZED /IMPOUNDED AND THEREAFTER STATEMENT OF OPERATORS OF THESE PAPER COMPANIES. THE SEARCHES HELPED IN UNEARTHING A LARGE SCAM BEING RUN BY ITS OPERATORS FOR GIVING BOGUS LTCG TO THOUSANDS OF BENEFICIARIES. (II) THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S SHIKHA DHAWAN (SUPRA) MENTIONED AND RELIED UPON BY THE HON'BLE 1TAT IS BASED ON THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT, MENTIONED ABOVE AND WHICH HAS 4 ALREADY BEEN DISCUSSED ABOVE, BEING ENTIRELY DISTINGUISHABLE TO THE PRESENT CASE. (III) HON'BLE ITAT HAS RELIED UPON ANOTHER DECISION OF KOLKATA BENCH OF TRIBUNAL IN THE CASE OF SH. PRAKASH CHAND BHUTORIA. HOWEVER, THIS CASE ALSO HAS DIFFERENT FACTS FROM THE PRESENT ONE. IN THAT CASE HON'BLE ITAT HAS STATED THAT EVIDENCES SAID TO HAVE BEEN COLLECTED BY DIT(LNV), KOLKATA AND THE REPORT IS NOT PRODUCED BEFORE THE BENCH. IN THIS CASE, NO SUCH REQUISITION APPEARS TO HAVE BEEN MADE. IN THIS CASE RELIANCE WAS PLACED ON VARIOUS JUDGMENTS WHICH ARE DISCUSSED BELOW: HON'BLE CALCUTTA HIGH COURT IN CASE OF CIT, KOLKATA - III VS SMT. SHREYASI GANGULI THIS CASE RELATES TO AY 2005-06, THEREFORE, CANNOT BE RELATED TO PRESENT CASE AS THE EVIDENCES COLLECTED DURING SEARCH AND SURVEY ACTION AS ALREADY DISCUSSED WERE NOT AVAILABLE AT THAT TIME. 'D' BENCH OF KOLKATA TRIBUNAL IN CASE OF GAUTAM KUMAR PINCHA VS ITO DATED 15.11.2017 THE CASE LAWS RELIED UPON IN THIS CASE ARE NOT APPLICABLE IN THE PRESENT CASE AS IN NONE OF THESE CASES THE EVIDENCE WAS IN THE SHAPE OF STATEMENTS RECORDED BY THE OPERATORS OF THESE PENNY STOCK COMPANIES. THE 'A' BENCH OF THE KOLKATA TRIBUNAL IN THE CASE OF ITO VS SHALEEN KHEMANI DATED 18.10.2017 THIS CASE LAW IS ALSO NOT APPLICABLE AS IN THIS CASE ASSESSEE HAD PURCHASED SHARES SOME 7 YEARS BACK. THE HON'BLE CALCUTTA HIGH COURT DECISION IN THE CASE OF PR. CIT VS RUNGTA PROPERTIES PVT. LTD. DATED 08.05.2017 5 THIS CASE LAW IS ALSO NOT APPLICABLE AS IN THE PRESENT CASE EVIDENCES IN THE SHAPE OF STATEMENTS OF OPERATORS OF PENNY STOCK COMPANIES ACCEPTING THAT THEY WERE ENGAGED IN PROVIDING BOGUS LTCG ENTRIES TO VARIOUS BENEFICIARIES IS AVAILABLE. (IV) HON'BLE ITAT HAS DISREGARDED THE FINDINGS OF INVESTIGATION WING OF THE DEPARTMENT, WHO UNEARTHED THE SCAM DURING SEARCH AND SURVEY ACTION ON THE OPERATORS OF THESES PENNY STOCK COMPANIES. (V) TOTAL DISREGARD HAS BEEN SHOWN TO THE STATEMENTS OF THE OPERATORS OF THE COMPANIES WHO WERE PROVIDING BOGUS ENTRIES OF LONG TERM CAPITAL GAINS INCLUDING M/S UNNO INDUSTRIES LTD., SH. PRADEEP JAIN, SH. HARSHAVARDHAN KAYAN, SH. MANOJ KUMAR AGGARWAL IN THEIR STATEMENT RECORDED ON OATH HAVE CLEARLY MENTIONED IN THEIR RESPECTIVE STATEMENTS THAT M/S UNNO INDUSTRIES LTD. WAS ENGAGED IN PROVIDING BOGUS LTCG TO VARIOUS BENEFICIARIES. (VI) HON'BLE ITAT HAS REFLECTED ONLY THE EVIDENCE OF SALE, WHILE TOTALLY IGNORING THE CIRCUMSTANCES OF PURCHASE OF SHARES, FICTITIOUS INCREASE IN VALUE OF SHARES AND THE FINANCIAL FUNDAMENTALS OF THE COMPANY DURING THE PERIOD OF SALE OF SHARES. (VII) THE ASSERTION THAT THE EVIDENCE WAS NOT CONFRONTED TO THE ASSESSEE CAN HARDLY BE APPLICABLE TO THE CIRCUMSTANCES OF THE CASE. CONFRONTING IN EACH AND EVERY CASE IS NOT REQUIRED NOR IS IT POSSIBLE. THE PERSONS WHOSE STATEMENTS WERE RECORDED HAVE GIVEN THEIR OWN STATE OF AFFAIRS. THEY DID NOT MENTION THE NAME OF BENEFICIARIES. THE BENEFICIARIES ARE IN THOUSANDS ACROSS COUNTRY. IT CANNOT BE EXPECTED THAT THEY WILL ROAM ACROSS COUNTRY TO BE PRESENT FOR CROSS EXAMINATION IN EACH AND EVERY CASE. 6 (VIII) THE STATEMENTS RECORDED UNDER OATH CANNOT BE WISHED AWAY SIMPLY BY RESORTING TO DIVERSIONARY TACTICS. THE SEARCHES AND SURVEY CONDUCTED BY INVESTIGATION WING, KOLKATA LIFTED THE VEIL FROM AN ORGANIZED RACKET OF CONVERTING BLACK MONEY AND IT CANNOT BE DISREGARDED ONLY FOR THE REASON THAT THE ASSESSEE WAS NOT CONFRONTED. (IX) THE FINDING OF THE HON'BLE ITAT THAT NO CASE SPECIFIC OR TRANSACTION SPECIFIC INFORMATION WAS GIVEN BY THE PERSONS WHOSE STATEMENT WAS RECORDED ARE FAR FROM THE FACTS OF THE CASE. THE PERSONS WHOSE STATEMENTS WERE RECORDED HAVE CLEARLY MENTIONED IN THEIR STATEMENT THE COMPANY M/S UNNO INDUSTRIES LTD., IN WHICH THE ASSESSEE HAS TRADED. THEREFORE, THE MISTAKE IS CLEARLY APPARENT FROM RECORD. (X) HON'BLE ITAT HAS TOTALLY DISREGARDED THE FINDINGS BY LD CIT(A) WHO CONFIRMED THE ACTION OF AO. THE CASE LAWS MENTIONED BY THE LD. CIT(A) HAVE NOT EVEN BEEN DISCUSSED IN ORDER. (XI) HON'BLE ITAT HAS RELIED UPON THE CASE LAWS WHICH ARE CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND HAS BEEN SEPARATELY DISCUSSED ABOVE. (XII) HON'BLE ITAT HAS NOT APPRECIATED THE FACTS THAT THERE CAN BE HARDLY ANY DOCUMENTARY CLINCHING EVIDENCE TO PIERCE THE VEIL OF SUCH UNDER HAND TRANSACTIONS. SUCH TYPE OF TRANSACTIONS CAN BE DISMANTLED ON THE BASIS OF CIRCUMSTANTIAL FACTS SURROUNDING EVIDENCES. (XIII) THE RECENT JUDGMENT BY HON'BLE DELHI HIGH COURT IN THE CASE OF UDIT KALRA V/S ITO WARD 50(1) IN ITA 220/2019 & CM NO. 10774/2019 DATED 08-03-2019, HAS DECIDED THE ISSUE IN FAVOUR OF REVENUE BY RELYING UPON THE FINDINGS OF THE INVESTIGATION WING, ENQUIRES CONDUCTED IN THE CASE OF ASSESSEE BROKERS, OPERATORS & ENTRY 7 PROVIDERS AND THE NATURE OF TRANSACTION. THE CASE LAW IS SQUARELY APPLICABLE IN THE INSTANT CASE. (XIV) IN THE RECENT JUDGMENT BY HON'BLE ITAT, SMC BENCH NEW DELHI IN THE CASE OF SH. ANUP RASTOGI AND SMT. ANJU RASTOGI, ITA NO.3809 AND 3810/DEL/2018 FOR THE ASSESSMENT YEAR 2015-16 DATED 08.01.2019 HAS DECIDED THE ISSUE OF BOGUS LTCG ON SALE OF SHARES IN FAVOUR OF REVENUE BY GIVING CREDENCE TO THE STATEMENT RECORDED BY INVESTIGATION WING AND THE ABRUPT, UNREALISTIC MOVEMENT OF PRICE AND NO EXTRAORDINARY INCREASE IN THE PROFITS OF THE COMPANY TO JUSTIFY THE INCREASE IN VALUE OF THE SHARES. THIS LATEST DECISION OF JURISDICTIONAL ITAT DELHI IS SQUARELY APPLICABLE N THE PRESENT CASE ON BOTH THE FACTS AND CIRCUMSTANCES OF THE CASE. IN VIEW OF THE ABOVE STATED FACTS THERE APPEARS TO BE APPARENT MISTAKE IN ORDER PASSED BY AS THE ORDER IS BASED ON WRONG INFERENCES DRAWN FROM THE DECISION RELIED UPON. IT IS THEREFORE, PRAYED THAT FILING OF MISC. APPLICATION, FOR THE ABOVE MENTIONED APPEAL ORDERS MAY KINDLY BE CONSIDERED AND ORDER PASSED MAY BE RECTIFIED. 3. FURTHER, HE ALSO DREW THE ATTENTION OF THE BENCH TO THE GROUNDS OF APPEAL IN THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE WHICH ARE AS UNDER :- 1. WHETHER ON FACTS AND CIRCUMSTANCES OF CASE HONBLE ITAT WAS RIGHT IN DELETING THE ADDITION MADE BY THE AO BASED ON WRONG INFERENCES DRAWN FROM CASE LAWS RELIED UPON. 2. WHETHER ON FACTS AND CIRCUMSTANCES OF CASE HONBLE ITAT WAS RIGHT IN DELETING THE ADDITION MADE BY THE AO BY IGNORING 8 THE ENQUIRIES CONDUCTED BY THE INVESTIGATION WING OF THE DEPARTMENT AND THE ENQUIRIES MADE BY AO. 3. WHETHER ON FACTS AND CIRCUMSTANCES OF CASE HONBLE ITAT WAS RIGHT IN DELETING THE ADDITION MADE BY THE AO IN THE BACKGROUND OF DECISION OF HONBLE DELHI HIGH COURT DECISION DATED 08.03.2019 IN THE CASE OF SH. UDIT KALRA V/S ITO WARD 50(1) NEW DELHI IN ITA 220/2019 & CM NO. 10774/2019, WHICH IS SQUARELY APPLICABLE IN THE CASE UNDER REFERENCE. 4. WHETHER ON FACTS AND CIRCUMSTANCES OF CASE HONBLE ITAT WAS RIGHT IN DELETING THE ADDITION MADE BY THE AO AS IN THE RECENT JUDGMENT BY HONBLE ITAT SMC BENCH, NEW DELHI IN THE CASE OF SH. ANUP RASTOGI AND SMT. ANJU RASTOGI IN ITA NO.3809 AND 3810/DEL/2018 DATED 08.01.2019, THE ISSUE WAS DECIDED IN FAVOUR OF REVENUE BY GIVING CREDENCE TO THE STATEMENT RECORDED BY INVESTIGATION WING AND THE ABRUPT, UNREALISTIC MOVEMENT OF PRICE AND NO EXTRAORDINARY INCREASE IN THE PROFITS OF THE COMPANY OF JUSTIFY THE INCREASE IN VALUE OF SHARES. 5. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, DELETE OR AMEND THE GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 4. THE LD. SR. DR REFERRING TO THE ABOVE SUBMITTED THAT THE REASONS FOR FILING THE MISCELLANEOUS APPLICATION IS SELF EXPLANATORY. 9 HE SUBMITTED THAT SINCE THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE DISREGARDING THE VARIOUS DECISIONS RELIED ON BY THE REVENUE, THEREFORE, CERTAIN MISTAKES HAVE CREPT IN THE ORDER OF THE TRIBUNAL AND, THEREFORE, THE ORDER SHOULD BE RECALLED/MODIFIED AND THE GROUNDS RAISED BY THE REVENUE IN THE MISCELLANEOUS APPLICATION SHOULD BE ALLOWED. 5. LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND STRONGLY CHALLENGED THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE. HE SUBMITTED THAT THE JURISDICTION OF THE ASSESSEE FALLS UNDER HONBLE PUNJAB & HARYANA HIGH COURT AND THE TRIBUNAL WHILE DECIDING THE ISSUE HAS FOLLOWED THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SHRI PREM PAL GANDHI (SUPRA) AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. FURTHER THE REVENUE IS RELYING ON VARIOUS DECISIONS WHICH WERE DECIDED SUBSEQUENT TO THE ORDER PASSED BY THE TRIBUNAL ON 25 TH SEPTEMBER, 2018. HE SUBMITTED THAT THE REVENUE THROUGH THIS MISCELLANEOUS APPLICATION IS TRYING TO PERSUADE THE BENCH TO REVIEW ITS OWN ORDER WHICH IS NOT PERMISSIBLE IN LAW. HE ACCORDINGLY, SUBMITTED THAT THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE SHOULD BE DISMISSED. 6. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THIS CASE THE ORDER WAS PASSED ON 25 TH SEPTEMBER, 2018 WHEREIN APART FROM VARIOUS OTHER 10 DECISIONS, THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SHRI PREM PAL GANDHI (SUPRA) WAS FOLLOWED. THE JURISDICTION OF THE ASSESSEE FALLS UNDER HONBLE PUNJAB & HARYANA HIGH COURT. FURTHER THE VARIOUS DECISIONS RELIED ON BY THE REVENUE IN THE GROUNDS OF APPEAL WERE DECIDED SUBSEQUENT TO THE DECISION OF THE TRIBUNAL WHICH IS APPARENT FROM THE GROUNDS RAISED BY THE REVENUE IN THE MISCELLANEOUS APPLICATION. THE LD. SR. DR COULD NOT POINT OUT ANY APPARENT ERROR IN THE ORDER OF THE TRIBUNAL WHICH CONSTITUTES A MISTAKE SO AS TO INVOKE THE PROVISIONS OF SECTION 254(2) OF THE I.T. ACT. IN MY OPINION THE REVENUE THROUGH THIS MISCELLANEOUS APPLICATION IS TRYING TO REQUEST THE TRIBUNAL TO RECTIFY /RECALL OF THE ORDER OF THE TRIBUNAL WHICH AMOUNTS TO REVIEW OF ITS OWN ORDER BY THE TRIBUNAL WHICH IS NOT PERMISSIBLE IN LAW. IN THIS VIEW OF THIS MATTER, I AM OF THE CONSIDERED OPINION THAT THERE IS NO APPARENT ERROR IN THE ORDER OF THE TRIBUNAL SO AS TO ENTERTAIN THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE. THEREFORE, THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS DISMISSED BEING DEVOID OF ANY MERIT. 7. IN THE RESULT THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/02/2021. SD/- (R.K. PANDA) 11 ACCOUNTANT MEMBER DATED: /02/2021 VEENA COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI