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Income Tax Appellate Tribunal, DELHI “SMC” BENCH: NEW DELHI
Before: SHRI KUL BHARAT
ORDER
PER KUL BHARAT, JM :
The present appeal filed by the assessee for the assessment year 2009-10 is directed against the order of Ld. CIT(A)-15, Delhi dated 03.03.2017.
The assessee has raised following grounds of appeal:- 1. “On the facts and in the circumstances of the case as well as in law the Ld. Commissioner of Income Tax (Appeals) grossly erred in confirming the addition of Rs.20,35,000/- U/s 68 of the Income Tax Act, 1961, which is otherwise sale proceeds of the assessee and suitably accounted for and explained.
2. On the facts and in the circumstances of the case as well as in law the Ld. Commissioner of Income Tax (Appeals) grossly erred in confirming the action of Ld. Assessing Officer treating the sales of assessee as undisclosed and making addition U/s 68 of the Income Tax Act, 1961, without considering the evidences on record. 3. The assessee crave right to alter/modify/amend/add/ delete any or all grounds of appeal
. These action of Hon'ble Commissioner of Income Tax
4. (Appeals)-15, New Delhi, and Ld. Assessing officer being Arbitrary, unjust, Illegal and invalid in law are liable to quashed and it is prayed to Your Honor that they please be quashed and/or any other relief just deem fit and proper please be directed.”
3. At the time of hearing, no one attended the proceedings on behalf of the assessee. It is seen from the records that on 18.01.2022, an application seeking adjournment was filed on behalf of the assessee. Therefore, the hearing of the appeal was adjourned to 18.04.2022. On this date also, a request was made by Ld.AR of the assessee for adjournment. The appeal was adjourned to 22.06.2022. On this date, no one attended the proceedings and the matter was adjourned to 18.08.2022 i.e. today. It is seen from the records that the assessee has been seeking adjournment and on the last date of hearing, there was no representation on behalf of the assessee despite opportunity was given to the assessee. Under these facts, the appeal was taken up for hearing in the absence of the assessee and being disposed off on the basis of material available on records.
4. The only effective ground in this appeal is against the sustaining of addition amounting to Rs.20,35,000/- made u/s 68 of the Income Tax Act, 1961 [“the Act”].
FACTS OF THE CASE 5. Facts giving rise to the present appeal are that the assessee filed its return of income, declaring total income of Rs.29,52,348/- on 30.09.2009. The case was taken up for scrutiny assessment. A notice u/s 143(2) of the Act was issued and duly served upon the assessee. In response thereto, Ld. Counsel for the assessee attended the proceedings and discussed the case with the Assessing Officer [“AO”]. It is recorded by the AO that the assessee company being a Non-Banking Financial Company Corporation and has credited interest of Rs.60,39,936/-. The assessee has also purchased and sold 46,100 shares of M/s Urvashi Finvest Pvt.Ltd. during the year. It was observed by the AO that the shares were purchased in August, 2008 from Shri Manoj Aggarwal @ 100/- per shares. However, shares were sold @ Rs.55.85/- per share on 15.03.2009 to M/s. Sanchauli Mercantile and Investment Pvt. Ltd. It was recorded by the AO that no payment was made for purchasing the shares as the amount was adjusteded out of a sum 3 | P a g e receivable from him. It was further observed that no copies of bills for sale were also submitted. Therefore, the AO treating this as a mechanism for reducing the tax liability and claiming a bogus loss of Rs.20,35,000/-.
Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), who after considering the submissions, dismissed the appeal of the assessee and sustained the addition.
Aggrieved against the order of Ld.CIT(A), the assessee is in appeal before this Tribunal.
8. Ld. Sr. DR appearing on behalf of the Revenue, opposed the grounds of appeal and supported the orders of the authorities below. Ld. Sr. DR submitted that the AO has clearly brought out that the transactions related to sale and purchase of shares was not supported with the evidences and also used as a tool to reduce the tax liability. He submitted that it is clearly brought out that within the span of less than one year, shares were sold at a very low price. Moreover, the assessee could not prove the credible evidences about the genuineness of the transaction.
9. I have heard Ld. Sr. DR and perused the material available on record and gone through the orders of the authorities below. I find that Ld.CIT(A) has given a finding on fact by observing as under:- 4 | P a g e
6. “The following points emerged from the report of the AO and after considering the submissions made by the appellant:- i) Sale and purchase bills in respect of sale/purchase of shares M/s Urvashi Finvest Pvt. Ltd. by appellant were found not to have been seized during the course of search/seizure operation conducted in the case of Shri S.K. Jain group which shows that the reasons given by the appellant for submitting additional evidence were not correct. Even otherwise if these documents are taken on record they do not conclusively prove that transaction was genuine due to other related facts and overwhelming evidence against the appellant. ii) The AO had issued summons u/s 131 of the Act to Shri Manoj Aggarwal and as per the summons dated 22.07.2016. Shri Manoj Aggarwal was required to appear along with following details:- (i) Personal Deposition (ii) Proof of acquisition of shares of M/s Urvashi (iii) Finvest Pvt Ltd and its source and to whom it is sold and mode of receipt of value of shares. (iv) Complete details of all bank accounts For the period 01-04-2008 to 31-03-2009 (v) Purpose and date of taking loan from M/s Stellar Investments Ltd. iii) It is Shri Manoj Aggarwal appeared before the AO on 04.08.2016 and his statement on oath was recorded. AO 5 | P a g e
has concluded after his deposition that the financial status of Shri Manoj Aggarwal do not conform with the capacity to enter into such huge transactions made with M/s Stellar Investment Pvt. Ltd. It is further reported by the AO that signature of Shri Manoj Aggarwal do not match with the signature on the sale bill dated 10.08.2008 vide which shares of M/s Urvashi Finvest Pvt. Ltd. were sold to the appellant. PAN No. AGIPA6766A submitted by him was found to be invalid. In the statement given it is stated by Shri Manoj Aggarwal that he is doing part time accountant's job and his income was below taxable limit. It is further revealed from the statement that Shri Manoj Aggarwal purchased the share of M/s Urvashi Finvest Pvt. Ltd. out of the loan taken from the appellant company and interestingly he has no other Investment in shares. It is also noted that Shri Manoj Aggarwal did not produce any bank statement though was asked so by the AO. iv) There was no compliance to the summons issues to M/s Sanchauli Mercantile and Investment Pvt. Ltd. It is also noted that against the sale of share of M/s Urvashi Finvest Pvt. Ltd. to M/s Sanchauli Mercantile and Investment Pvt. Ltd. which were sold vide bill dated 15.03.2009 for Rs.25,75,000/-, as per the ledger account the amount was received first on 31.03.2010 via Kotak Mahindra Bank the said cheque was returned and the entry in the ledger was reversed on 01.10.2010. The payment against the same was subsequently received/obtained on 20.11.2010 of Rs.10,00,000/- and Rs.15,75,000/- were received on 31.03.2011. 6 | P a g e v) Apart from the above there has been no rationale submitted as to why at the first instance the shares of M/s Urvashi Finvest Pvt. Ltd. was purchased by Shri Manoj Aggarwal. Later on by Shri M/s Sanchauli Mercantile and Investment Pvt. Ltd.
7. A copy of the remand report was given to the appellant. Appellant filed its rejoinder vide letter dated 03.10.2016. In the said rejoinder the appellant has not controverted the findings given by the AO. With regard to the ground taken for submitting additional evidence the appellant has stated that material seized during the search operation was very voluminous running into thousands of pages and it was feasible to look into each and every page to ascertain if the said bills were seized. It is pleaded that in the interest of justice the evidence should be admitted and considered for deciding the issue.
On the basis of points/findings mentioned in para 6 and considering that these findings have remained unconverted by the appellant the genuineness of the transactions entered into by the appellant for purchase and sale of shares of M/s Urvashi Finvest Pvt. Ltd. has not been established. In the circumstance, the addition made by the AO of Rs.20,35,000/- is upheld. The AO has clearly stated in the order that addition is made in account of sale/purchase of shares. The amount added is not sale proceeds but the bogus loss of Rs.20,35,000/- being Rs.46,10,000/- - Rs. 25,75,000/-.”
The finding of Ld.CIT(A) is not rebutted by the assessee by giving any contrary material on record. It is stated by the Ld.CIT(A) that the financial capacity of Shri Manoj Aggarwal was not commensurate the transaction carried out by him. The assessee has not contradicted this by placing any contrary material on record. I therefore, do not see any reason to disturb the finding of Assessing Authority, the same are rejected. Thus, grounds raised by the assessee are dismissed.
In the result, the appeal of the assessee is dismissed.
Order pronounced in the open Court on 22nd September, 2022.