DCIT, Muzaffarnagar v. Smt. Amita Bansal, Muzaffarnagar

ITA 2025/DEL/2009 | 2005-2006
Pronouncement Date: 26-02-2010 | Result: Partly Allowed

Appeal Details

RSA Number 202520114 RSA 2009
Assessee PAN MARCH2005B
Bench Delhi
Appeal Number ITA 2025/DEL/2009
Duration Of Justice 9 month(s) 13 day(s)
Appellant DCIT, Muzaffarnagar
Respondent Smt. Amita Bansal, Muzaffarnagar
Appeal Type Income Tax Appeal
Pronouncement Date 26-02-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 26-02-2010
Date Of Final Hearing 16-12-2009
Next Hearing Date 16-12-2009
Assessment Year 2005-2006
Appeal Filed On 13-05-2009
Judgment Text
I.T.A. NO.2025 /DEL/09 1/7 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE SHRI R.P. TOLANI JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER I.T.A. NO. 2025/DEL/2009 ASSESSMENT YEAR : 2005-06 DCIT MS. ANITA BANSAL CIRCLE-I 197-NOTH CIVIL LINES MUZAFFARNAGAR. V. MUZAFFARNAGAR. (APPELLANT) (RESPONDENT) PAN /GIR/NO.AACMPB-8069-J APPELLANT BY : SHRI NARENDER K. CHAND SR. DR. RESPONDENT BY : SHRI S.K. TANDON C.A. ORDER PER A.K. GARODIA AM: 1. THIS IS REVENUE'S APPEAL DIRECTED AGAINST THE OR DER OF LD CIT(A) MUZAFFARNAGAR DATED 24.2.2009 FOR ASSESSMENT YEAR 2 005-06. 2. THE GROUNDS RAISED BY THE REVENUE READ AS UNDER: - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN LAW AND ON FACTS BY DELETING ADDITIONNOF RS.11 77 000/- AS INCOME FROM OTHER SOURCES BY RELYING UPON THE SUBMI SSION OF THE ASSESSEE WITHOUT GOING ON THE DETAILED FACTS MENTIO NED BY THE ASSESSING OFFICER IN THE ASSESSMENT . . I.T.A. NO2025/DEL/09 2/7 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN LAW AND ON FACTS BY DELETING THE ADDITION OF RS.54 100/- BY IGNORING THE FACTS THAT ASSESSEE HIMSELF SUBMITTED IN LETTER DATED 26.6.2007 THAT HE EARNED PROFIT FROM M/S SHAMBU DAY A VINOD KUMAR. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE CIT(A) HAS ERRED IN LAW AND ON FACTS THE ORDER OF LD CIT( A) DESERVES TO BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. 3. REGARDING GROUND NO.1 BRIEF FACTS OF THE CASE ARE THAT IT IS NOTED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS DECLARED LO NG TYERM CAPITAL GAIN OF RS.11 20 193.80 ON THE BASIS OF 11000 SHARES OF M/S WELCOME COIR INDUSTRIES LTD. WERE SOLD ON 26.2.2005 @ RS.107/- PER SHARE. THE ASSESSEE HAS RECEIVED SALE CONSIDERATION OF RS.11.77 LAKHS AND REDUCED TH ERE FROM BROKERAGE AND SERVICE TAX OF RS.1212.20 AND THE RESULTED INCOME W AS RS.11 75 787.80. FROM THE SAME THE ASSESSEE HAS DEDUCTED ACQUISITION COS T OF THESE SHARES WHICH WERE SAID TO BE ACQUIRED ON 10.11.2003 @ RS.5/- PER SHARE AT A TOTAL COST OF RS.55 000/- + RS.594/- TOWARDS BANK/DD CHARGES AND IN THIS MANNER THE ASSESSEE HAS REDUCED COST OF ACQUISITION OF RS.55 5 94/- AND WORKED OUT THE LONG TERM CAPITAL GAIN OF RS.11 20 193.80. THE ASSESSING OFFICER ASKED THE ASSESSEE TO SUBMIT VARIOUS DETAILS AND SUPPORTING EVIDENCES AS PER NOTICE U/S 144 OF THE IT ACT ISSUED BY THE ASSESSING OFFICER ON 10.10.2007 FIXING THE DATE OF COMPLIANCE ON 22.10.2007. THE CONTENTS OF THIS NOTICE ARE REP RODUCED BY THE ASSESSING OFFICER ON PAGE NO.2 & 3 OF THE ASSESSMENT ORDER. I T IS FURTHER NOTED BY THE ASSESSING OFFICER THAT ON THE FIXED DATE SHRI SK TA YAL APPEARED AND FILED REPLY. THE CONTENTS OF THIS REPLY ARE ALSO REPRODUCED BY T HE ASSESSING OFFICER ON PAGE NO.3 4 & 5 OF THE ASSESSMENT ORDER THE SALIENT PO INTS OF THIS REPLY ARE THAT AS PER THE ASSESSEE THE DATE OF PURCHASE OF SHARE IS 10.11.2003. COPY OF CONTRACT NOTE AND BILL IN RESPECT OF PURCHASE OF SHARE IS EN CLOSED. IT WAS SUBMITTED THAT THESE SHARES WERE DIRECTLY TRANSFERRED TO DEMAT A/C OF THE ASSESSEE IN DEMAT A/C NO.220554406. IT WAS ALSO SUBMITTED THAT THE SH ARES WERE PURCHASED THROUGH BROKER M/S ELBEE PORTFOLIO PVT. LTD. AND SI NCE THESE SHARES WERE DIRECTLY . I.T.A. NO2025/DEL/09 3/7 RECEIVED IN DEMAT A/C OF THE ASSESSEE DISTINCTIVE NOS. OF THE SHARES CANNOT BE GIVEN. IT WAS ALSO SUBMITTED THAT PAYMENT AGAINST P URCHASE OF THESE SHARES WERE MADE BY DD 16000 DATED 23.2.2004. IT WAS ALSO SUBMI TTED THAT THE ASSESSEE HAS PURCHASED THESE SHARES THROUGH SHARE BROKER. F URTHER THESE SHARES ARE LISTED AT A RECOGNIZED STOCK EXCHANGE. REGARDING SA LE OF SHARE IT WAS SUBMITTED THAT THESE SHARES WERE SOLD THROUGH SHARE BROKER M/ S DN KANSAL SECURITIES PVT. LTD. @ RS.107/- PER SHARE AND THE SALE CONSIDERATIO N WAS RECEIVED VIDE DD/CHEQUE NO. 265012 DRAWN ON HDFC BANK MUZAFFAANA GAR. IT WAS ALSO SUBMITTED THAT THESE SHARES WERE SOLD THROUGH A SHA RE M/S DN KANSAL SECURITIES PVT. LTD. THESE SHARES ARE LISTED IN MADRAS STOCK E XCHANGE AMND MAGAD STOCK EXCHANGE AND BOTH ARE RECOGNIZED STOCK EXCHANGE. I T WAS FURTHER NOTED BY THE ASSESSING OFFICER THAT THE REPLY FILED BY THE ASSES SEES COUNSEL WAS DULY CONSIDERED AND HE WAS REQUIRED TO PRODUCE DIRECTOR/ PRINCIPAL OFFICER OF M/S ELBEE PORTFOLIO PVT. LTD. AND M/S DN KANSAL SECURITIES PV T. LTD. THROUGH WHOM SHARES HAVE BEEN PURCHASED AND SOLD. IT IS NOTED BY THE AS SESSING OFFICER THAT NO COMPLIANCE HAS BEEN MADE NOR ANY ADJOURNMENT WAS SO LD. THE ASSESSING OFFICER WAS OF THE OPINION THAT THIS TRANSACTION OF PURCHASE AND SALE OF SHARE IS NOT A GENUINE TRANSACTION. ONE OF THE REASONS GIVEN BY THE ASSESSING OFFICER IS THAT THE INCREASE IN VALUE OF SHARE IS HIGHLY UN-RE ALISTIC BECAUSE IN JUST 13-15 MONTHS TIME THE PRICES OF THESE SHARES HAVE ALLEGED LY INCREASE BY MORE THAN 20 TIMES. THE ASSESSING OFFICER HAS MADE ADDITION OF R S.11.77 LAKHS AS INCOME FROM UNDISCLOSED SOURCES. REGARDING NO.3 THE FACTS THAT IT IS NOTED BY THE ASSESSING OFFICER ON PAGE NO.5 OF THE ASSESSMENT OR DER THAT IN THE COMPUTATION THE ASSESSEE HAS SHOWN PROFIT THROUGH TRADING WITH M/S SHAMBU DAYAL RAM NATH AT RS.49 100/- BUT COPY OF ACCOUNT WHICH HAS B EEN FILED IN SUPPORT OF THIS INCOME IS OF SHAMBU DAYAL VINOD KUMAR. IT IS NOTED BY THE ASSESSING OFFICER THAT PROFIT FROM M/S SHAMBU DAYAL RAM NATH HAS BEEN SHOWN IN THE COMPUTATION OF RS.49 100/- BUT PROFIT EARNED THROUGH M/S SHAMBU DAYAL VINOD KUMAR RS.54 100/- MEANING THEREBY THAT THE ASSESSEE HAS E ARNED PROFIT OF RS.54 100/- THROUGH M/SSHAMBU DAYAL VINOD KUMAR IN ADDITION TO EARNING OF PROFIT OF RS.49 100/- THROUGH M/S SHAMBU DAYAL VINOD KUMAR. BEING AGGRIEVED THE . I.T.A. NO2025/DEL/09 4/7 ASSESEE CARRIED THE MATTER IN APPEAL BEFORE LD CIT( A). BOTH THESE MATTERS IN APPEAL BEFORE LD CIT(A) WHO HAS DELETED BOTH THESE ADDITIONS AND NOW THE REVENUE IS IN APPEAL BEFORE US. 4. LD DR OF THE REVENUE SUPPORTED THE ASSESSMENT OR DER. OUR ATTENTION WAS DRAWN TO PAGE NO.24 OF THE PAPER BOOK WHICH CONTAIN THE DEMAT A/C STATEMENT OF THE ASSESSEE AND DEMAT A/C NO.2004455406. IT IS POINTED OUT THAT AS PER THIS DEMAT A/C THE SHARES WERE TRANSFERRED TO THE DEMAT A/C OF THE ASSESSEE ON 30.11.2004. IT WAS ALSO SUBMITTED THAT PAPER TRAIL TREATED BY THE ASSESSEE IS NOT IN SUPPORT OF THIS CONTENTION RELIANCE WAS PLACED ON THE TRIBUNAL DECISION RENDERED IN THE CASE OF DCIT V. AS PER I.T.A. NO.36 84/DEL/2008 DATED 8.1.2010. HE SUBMITTED A COPY OF THE TRIBUNAL DECISION AND OU R ATTENTION WAS DRAWN TO PARA NO.7 OF THE TRIBUNAL DECISION WHERE IT IS HELD BY T HE TRIBUNAL THAT THE TRANSACTION DOES NOT BECOME FINAL MERELY BECAUSE A PAPER TRAIL HAS BEEN CREATED. HE STRONGLY SUPPORTED THE ASSESSMENT ORDER REGARDING B OTH THESE GROUNDS. 5. AS AGAINST THIS LD AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE LD CIT(A) REGARDING BOTH GROUNDS. WHEN IT WAS ENQUIRED BY THE BENCH AS TO ON WHICH DATE THESE SHARES OF M/S WELCOME COIR INDUSTR IES PVT. LTD. WERE CREDIT IN DEMAT A/C OF THE ASSESSEE THE LD AR OF THE ASSESSE E COULD NOT POINT OUT ANY SPECIFIC DATE BUT IT WAS SUBMITTED BY HIM THAT THES E SHARES HAD COME TO THE DEMAT A/C OF THE ASSESSEE DURING NOVEMBER 2004. OU R ATTENTION WAS DRAWN TO PAGE NO.23 OF THE PAPER BOOK WHICH IS A CERTIFICATE OF DEMAT A/C OF THE ASSESSEE DATED 27.11.2004. IT IS ALSO POINTED OUT THAT ON P AGE NO.22 OF THE PAPER BOOK IS A STATEMENT DEMAT A/C FOR THE MONTH OF MARCH 2005 AS PER WHICH THESE SHARES WERE TRANSFERRED TO STOCK HOLDING CORPORATION OF IN DIA LTD. IN MARCH 2005. WHEN IT WAS ENQUIRED BY THE BENCH THAT WHAT IS THE EVIDENCE REGARDING THIS FACT THAT THE SHARES SOLD BY THE ASSESSEE IN FEBRUARY 2 005 AT RS.107/- PER SHARE AND DELIVERED IN MARCH 2005 BUT THE SAME SHARES WHICH A RE SAID TO BE ACQUIRED BY THE ASSESSEE IN NOVEMBER 2003 LD AR OF THE ASSESS EE COULD NOT SHOW US ANY EVIDENCE THAT THESE SHARES WERE CREDITED TO DEMAT A /C OF THE ASSESSEE IN . I.T.A. NO2025/DEL/09 5/7 FEBRUARY 2004/MARCH 2004 AFTER MAKING PAYMENT BY THE ASSESSEE ON 23.2.2004. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GON E THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT AS PER THE CLAIM OF THE ASSESSEE THESE 11000 SHARES OF M/S WELCOME COIR INDUSTRIES LTD. WERE ACQ UIRED BY THE ASSESSEE AT A COST OF RS.55 594/- IN THE MONTH OF FEBRUARY 2003 AND THE PAYMENT FOR THE SAME WAS MADE BY DD ON 23.2.2004. HENCE IT IS OBVIOUS THAT THE SHARES MUST HAVE BEEN DELIVERED TO THE ASSESSEE IN THE MONTH OF FEBR UARY 2004/MARCH 2004 AFTER THE PAYMENTS MADE BY THE ASSESSEE. AS PER THE COPY OF DEMAT A/C OF THE ASSESSEE APPEARING ON PAGES 23-24 OF THE PAPER BOOK THESE SHARES ARE CREDITED IN THE DEMAT A/C OF THE ASSESSEE IN NOVEMB ER 2004. IN FEBRUARY 2005 2005 THE ASSESSEE HAS SOLD THESE 11000 SHARES WHIC H WERE CREDITED TO HIS DEMAT A/C IN THE MONTH OF NOVEMBER 2004. NOW THE QUESTION IS WHETHER THESE SHARES WHICH ARE CREDITED TO DEMAT A/C OF THE ASSES SEE IN NOVEMBER 2004 OR THE SHARES WHICH WERE SAID TO BE PURCHASED BY THE A SSESSEE IN THE MONTH OF NOVEMBER 2003. IT IS AGAINST THE HUMAN PROBABILIT Y THAT ONCE THE SHARES HAVE PURCHASED AND THE AMOUNT IS PAID BY THE ASSESSEE T HE ASSESSEE DID NOT GET THE DELIVERY TILL NOVEMBER 2004 IT WAS THE SUBMISSION OF THE ASSESSEE BEFORE US THAT THESE SHARES WERE DELIVERED TO DEMAT A/C OF TH E ASSESSEE IN NOVEMBER 2004. THIS IS A MERE CONTENTION RAISED BY THE LD C OUNSEL FOR THE ASSESSEE BEFORE US THAT WITHOUT FURNISHING ANY EVIDENCE IN S UPPORT OF THIS CONTENTION. IF THAT WAS FACT THE ASSESSEE COULD HAVE FURNISHED COPY OF DEMAT A/C OF THE SHARE BROKER SHOWING THE SHARES HELD BY THE BROKER ON BEH ALF OF THE ASSESSEE. NO CONFIRMATION OR CERTIFICATE HAS BEEN FURNISHED BY T HE ASSESSEE FROM SHARE BROKER TILL NOVEMBER 2004 THESE SHARES WERE HELD BY THE BROKER IN HIS DEMAT A/C ON BEHALF OF THE ASSESSEE. UNDER THESE FACTS WE ARE O F THE CONSIDERED OPINION THAT THE ASSESSEE COULD NOT ESTABLISH THAT THESE 11000 S HARES OF THIS COMPANY CREDITED TO THE DEMAT A/C OF THE ASSESSEE IN NOVEMB ER 2004 BUT THE SAME SHARES WHICH WERE SAID TO BE PURCHASED BY THE ASSES SEE IN THE MONTH OF NOVEMBER 2003 AND PAYMENT OF WHICH IS SAID TO BE M ADE BY THE ASSESSEE IN . I.T.A. NO2025/DEL/09 6/7 FEBRUARY 2004. IN THE ABSENCE OF THIS SOURCE OF S HARES CREDITED TO THE DEMAT A/C OF THE ASSESSEE IN NOVEMBER 2004 REMAINS UNEXP LAINED AND HENCE SALE PROCEED OF THESE SHARES HAS TO BE TREATED AS UNEXPL AINED INCOME OF THE ASSESSEE. THE ASSESSING OFFICER HAS DONE THE SAME W HEREAS LD CIT(A) HAS DELETED THE ADDITION ON THE BASIS THAT THE THEORY O F THE PREPONDERANCE OF THE PROBABILITY WHEN THE ASSESSEE DO NOT FILE ANY COGEN T EVIDENCE AND THE ASSESSING OFFICER HAS DISAPPROVED THE EVIDENCE FILED. AS PER ABOVE DISCUSSION WE HAVE NOTED THAT THE ASSESSEE HAS NOT FILED ANY COGENT EV IDENCE TO SHOW AS TO WHY THE SHARES PURCHASED IN NOVEMBER 2003 FOR WHICH PAYMEN T WAS MADE BY THE ASSESSEE IN FEBRUARY 2004 WERE CREDITED TO HER DEM AT A/C IN NOVEMBER 2004. SINCE THE ASSESSEE HAS NOT FILED ANY COGENT EVIDENC E IT HAS TO BE HELD THAT THESE SHARES WHICH WERE CREDITED IN DEMAT A/C OF TH E ASSESSEE IN NOVEMBER 2004 WERE NOT THE SAME SHARES WHICH ARE STATED TO H AVE BEEN PURCHASED BY THE ASSESSEE IN NOVEMBER 2003. SINCE NO OTHER SOURCE HAS BEEN EXPLAINED BY THE ASSESSEE REGARDING CREDIT OF THESE 11000 SHARES IN HER DEMAT A/C IN NOVEMBER 2004. THESE SHARES HAVE TO BE HELD AS UNEXPLAINED SHARES SALE PROCEEDS OF WHICH HAVE TO BE ASSESSED AS UNEXPLAINED INCOME OF THE ASSESSEE AND WE THEREFORE REVERSE THE ORDER OF THE LD CIT(A) AND U PHOLD THE ASSESSMENT ORDER ON THIS ISSUE. GROUND NO.1 OF THE REVENUE IS ALLOWED. 7. REGARDING GROUND NO.2 23 FIND THAT IT WAS SUBMI TTED BY THE ASSESSEE BEFORE LD CIT(A) THAT AT THE TIME OF FILING OF RETU RN OF INCOME THE ASSESSEE HAD WRONGLY MENTIONED THAT AN AMOUNT OF INCOME THERE FR OM M/S SHAMBU DAYAL RAM NATH INSTEAD OF M/S SHAMBU DAYAL VINOD KUMAR. IT WA S ALSO SUBMITTED THAT THERE WAS NO DEALING WITH M/S SHAMBU DAYAL RAM NASTH. RE GARDING DIFFERENCE IN AMOUNT OF RS.5 000/- IT WAS SUBMITTED THAT COPY OF ACCOUNT OF M/S SHAMBU DAYAL VINOD KUMAR SHOWS THAT A CHECUQ OFRS.5 000/- WAS GIVEN VIDE CHEQUE NO.541865 DATED 28.11.2004 WHICH WAS ENCASHED BY TH E BANK BY THAT PARTY ON 3.1.2005 AND HENCE THE INCOME WAS ONLY OF RS.49 100 /- ALTHOUGH RS.54 100/- WAS RECEIVABLE FROM THAT PARTY INCLUDING THE ADVANC E AMOUNT OF RS.5 000/- GIVEN BY THE ASSESSEE. LD CIT(A) HAS DELETED THIS ADDITIO N BY OBSERVING THAT THE . I.T.A. NO2025/DEL/09 7/7 ASSESSING OFFICER HAS NOT BEEN ABLE TO CONTROVERT T HE EXPLANATION FURNISHED BY THE ASSESSEE TO THE EFFECT THAT THE ASSESSEE HAS NE ITHER DEALING WITH M/S SHAMBU DAYAL RAM NATH DURING THE YEAR NOR HAS PAIR OR RECEIVED ANY AMOUNT FROM THAT PARTY.COPY OF A/C OF M/S SHAMBU DAYAL RAM NATH IS AVAILABLE BEFORE US ON PAGES 26-27 OF THE PAPER BOOK. AS PER THE SAM E THERE IS INCOME OF ONLY RS.49 100/-. AS PER COPYBOF ACCOUNT THAT PARTY AVAI LABLE ON PAGE NO.25 OF THE PAPER BOOK THERE WAS AN ADVANCE OF RS.5 000/- BY T HE ASSESSEE AND FOR THIS REASON THE NET AMOUNT RECEIVED FROM THAT PAPRTY IS OF RS.54 100/-. INCOME OF RS.49 100/- WAS DULY DECLARED BY THE ASSESSEE IN TH E RETURN OF INCOME ALTHOUGH THE NAME WAS MENTIONED WAS WRONG NAME OF M/S SHAMBU DAYAL RAM NATH INSTEAD OF M/S SHAMBU DAYAL VINOD KUMAR. THERE IS N O OTHER DISCREPANCY IN THE PRESENT CASE WE DO NOT FIND ANY REASON TO INTERFER E IN THE ORDER OF LD CIT(A) ON THIS ISSUE. GROUND NO.2 OF THE APPEAL OF THE REVENU E IS REJECTED. 8. IN THE RESULT THE APPEAL OF THE REVENUE IS PART LY ALLOWED. 9. ORDER PRONOUNCED IN THE OPEN COURT ON 26TH F EBRUARY 2010. SD/- SD/- (R.P. TOLANI) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 26..2010. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)- NEW DELHI. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DELHI. TRUE COPY. BY ORDER (ITAT NEW DELHI).