RENU VERMA,NEW DELHI vs. DCIT, CIR 36(1), DELHI

The assessee has raised the following grounds of appeal:

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.

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.

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.

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

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.

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.

The assessee filed an appeal against the Assessment Order which was dismissed by Ld. CIT (Appeal)

Aggrieved, the assessee filed appeal before the Tribunal.

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.

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.

In the peculiar facts and circumstances of the instant case, it can be conveniently held that the investments sold

In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 22/02/2023.