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Income Tax Appellate Tribunal, DELHI BENCH “F” NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI PRASHANT MAHARISHI
The aforesaid appeal has been filed by the Revenue against the impugned order dated 14.02.2014, passed by learned CIT (Appeals), Rohtak for the quantum of assessment passed u/s.143(3) for the Assessment Year 2002-03. In the grounds of appeal, the assessee has raised the following grounds:- i) On the facts and circumstances of the case, the Ld.CIT(A) has erred in not appreciating the position that the revenue has discharged its onus to prove that the assessee Sh. Ram Narain Bansal was a benami owner of the various firms. ii) On the facts and circumstances of the case, the Ld.CIT(A) has erred in ignoring the fact that the so called owners of these firms, in their statements categorically stated that the owner of the entire business of the benami concerns in which they have been shown as Prop., was Sh.Ram Narain Bansal, and account holder of Bank A/cs of these concerns is also Sh. Ram Narain Bansal and they were only workers of Sh.Ram Narain Bansal. iii) On the facts and circumstances of the case, the Ld.CIT(A) has erred in not appreciating the fact that statements of S/Sh. Puran Chand Prop. M/s. Prem & Co., Sanjay Kumar Prop. Rajiv Trading Co. and Om Parkash Prop. Bansal & Co., Ramesh Kumar Prop. Seema Trading Co., Dharmender Kumar Prop. Budh Mai & Sons and Surinder Kumar Prop. S.K. Trading Co., recorded during the course of assessment proceedings for the A.Y. 2002-03 were recorded in the presence of the assessee and his counsel and opportunity to cross examine these persons was also given to the assessee but the assessee did not avail the same and failed to discharge the onus cast upon him to disprove the statements. iv) On the facts and circumstances of the case, the Ld. CIT(A) has erred in ignoring the fact that photocopies of statements of so called owners were provided to the assessee to file rebuttal and thus the onus shifted upon the assessee to disprove the statements; which he failed to do and instead only stated that he has no connection with these firms. v) On the facts and circumstances of the case, the Ld.CIT(A) has erred in not appreciating the direction of the Hon'ble ITAT that CIT(A) should discuss the factual and legal issue involved, by way of judicious and speaking order. CIT(A) only dealt the issues superficially just by quoting from orders of Hon'ble ITAT for assessment years 2001-02, 2003-04 and 2004-05 which were available before the Hon'ble ITAT at the time of passing the order to remit the matter to the file of the CIT(A). vi) The Appellant craves leave to add or amend the grounds of appeal before the appeal is heard or disposed off.
2. At the outset, it has been admitted by both the parties that the issues involved are covered by the decision of the Tribunal in assessee’s own case for the Assessment Years 2001-02, 2003-04 and 2004-05 vide order dated 30.01.2012, wherein similar additions have been deleted on the ground that Assessing Officer has not able to prove the benami allegation through any cogent material evidence that the assessee was the benami owner of the concerns.
The facts in brief are that the assessee had filed its original return of income on 12.05.2003 which had attained finality. Thereafter, the case was reopened u/s.147 by issuance of notice dated 13.03.2007 u/s 148 on the reasons incorporated in the impugned assessment order. The main allegation in the reasons was as under: 1) Many Benami/bogus concerns (.....) were floated by Sh. Ram Narain Bansal S/o Sh. Mange Ram, Charkhi Dadri.
2) Small amounts of Salaries were paid by Sh. Ram Narain Bansal to the Proprietors of these concerns. 3) So alleged concerns have made purchases of mustard seed from NAFED and there are also huge deposits in their bank accounts. 4) These concerns had not filed Income tax returns. 5) Sh. R.N. Bansal got signed the papers relating to Sales-Tax and bank from the proprietors of these concerns deposits in their bank accounts. 6) He was looking after all the business activities of the aforesaid floated benami/bogus concerns from the back door. 7) The deposit of Rs.2,15,432(000) was made by Sh. R.N. Bansal in the account of different benami/bogus concerns, as detailed above, which is unexplained.
After detailed discussion the Assessing Officer made addition of Rs.1,57,70,910 after working out the peak amount of investment in various banks account operated by alleged bogus concerns which were as under:- A. M/s. Om Trading Co. Rawaldhi/Badhra (Prop. Shri Purushottam Sharma) (1) Gross Profit as determined in his Rs. Assessment by the then Assessing Officer on 13,56,955 (2) Peak Amount of investment as Bank account (a) SBOP, Narnaul 2,45,882 (b) CCB, Rewari 7,55,000 Total 23,57,837 However income assessed (as per protective assessment vide order dated 12.06.2007 is taken on substantive basis): 21,11,955 B. M/s. Budhmal & Sons, Surajgarh/Ch. Dadri (Prop. Shri Dharmender) Peak amount of investment as Bank account:- (a) SBOP, Narnaul (60392) 51,16,629 (b) CCB, Rewari 9,75,773 (c) CCB, Rewari of Om Trading Co. Total Turnover at Rs.1586168/- Profit taken @ 1% 1,58,652 (d) SBOP, Narnaul (60392) Total Turnover At Rs.118396115/- Net profit Taken @1% 11,83,961 Total 74,35,015 C. M/s. Seema Trading Co. (Prop. Shri Ramesh kumar) (1) Net Profit as declared in the sales Tax Return 43,760 (2) Peak amount of investment as Bank Account:- (a) SBOP, Narnaul (60443) 15,01,909 TOTAL 15,45,669 D. M/s. S.K. Trading Co., Hodal (Prop. Shri Surinder Singh) (1) Net Profit as declared in the Sales Tax Return NIL (2) Peak amount of investment as bank account:- (a) SBOP, Narnaul (60377) 15,01,909 (b) CCB, Rewari of Turnover at Rs.7555904/- Profit taken @1% 75,559 TOTAL 15,77,468/- E. M/s. Prem & Co. ( Prop. Shri Puran Chand) 1) Net Profit as declared in the Sales Tax Return NIL 2) Peak amount of investment as bank account:- (a) SBOP, Narnaul (9283) 30,53,806 3053806 Grand Total 1,57,23,913
In the first appeal, the ld. CIT(A) accepted the assessee’s contention and allowed the assessee’s appeal and in the second appeal filed by the Revenue again the appeal was dismissed but on a legal ground that notice u/s.143(2) was not issued and served in accordance with law. However, in further appeal before the Hon'ble High Court u/s 260A the issue had been remitted back to the Tribunal for making a fresh decision on merit vide judgment and order dated 13.07.2011. The Tribunal had in pursuance had remitted the matter back again to the file of the ld. CIT (A) for deciding the issue afresh. Before the ld. CIT (A) it was brought on record that the Tribunal in the Assessment Years 2001-02, 2003-04 and 2004-05 have been decided the similar issues on merits after detailed discussion which fact has been noted by the ld. CIT(A) from pages 5 to 12 of the appellate order. Thus, following the order of the Tribunal, ld. CIT (A) has deleted the addition after observing and holding as under:-
3. I have examined the submissions of the appellant and the facts on record. The Hon'ble ITAT in its order for the Assessment Year 2001-02, 2003-04 & 2004-05 vide order dated 31.01.2012 deleted the additions in these years on the same issue. The Assessing Officer has not been able to prove the benami allegation through cogent material on evidence. There is no material evidence to prove that the assessee was the benami owner. There has to be corroborative evidence for the same which is missing in this case.
We find that the Tribunal in assessee’s own case has dealt this issue threadbare and after detailed discussion the Tribunal has accepted the assessee’s contention after observing and holding as under:- “32. We have heard the rival submission and perused the case record. Facts have been narrated in details above. The parameters for making assessments in the cases of Benami allegations are by now settled. Hon’ble Calcutta High court in the case of Usha Bhar (supra) has laid down some important aspects in this regard. 33. It clearly emerges from the facts that AO while carrying out enquiries or investigations has not collected adequate material, evidence to ascertain the alleged Benami transactions which are claimed to be voluminous, spreading to nearly 5 years and as rightly pointed out by Id counsels involves various agencies, record and human efforts. These material agencies are NAFED department, record and staff, Transporters, Labour agencies, Bank staff, Purchasers of Mustard seed, Sales Tax authorities etc. No effort has been made from any of these departments which would have immensely helped the AO in investigation. 34. The Benami charge is only 7 statements out of which one denies assessee being a Benami owner. Thus there are neither statements on record in respect of remaining 8 persons, nor further evidence collected by AO by investigations or enquiries on any other material aspect. Ld DR contends that looking at the nature of transaction it should be held that these 8 persons would have any way deposed against assessee, like 6 other witnesses, therefore the AOs additions may be upheld in view of Hon’ble Supreme Court judgment in the case of Sumati Dayal (supra), or in alternate, matter may be set aside back to AO for fresh examinations. 35. We are unable to agree to the revenue’s proposition about set aside. This will amount to giving AO fresh innings for inquiry without any lawful justification, after a period of ten years, which is against principles of justice. AO was not prevented to carry out further investigations, In these fact s and respectfully following case laws, relied on by assessee, we decline this request. 36. The only material evidence relied on by AO being these statements, additions in respect of 8 persons whose statements are not recorded, cannot be upheld. Sumati Dayal decisions lays down human conduct, surrounding circumstances and preponderance of probabilities on this basis of material available on record. It does not mandate to apply them when no record exists at all like in respect of these 8 persons. They were AOs witnesses and he was not prevented by any reasons to summon them. Similarly out of 7 it is claimed that 1 witnessed denied assesses role as Benami owner. It is pleaded by Id DR that he tried to protect assessee. Ld counsel contends that converse may also be true that 6 witnesses may have tried to wrongly implicate the assessee.
In these circumstances, what remains on record are 6 statements alleging assessee sans the corroborating evidence. On facts we have to decide whether these 6 statements constitute sufficient material to hold the assessee as Benami owner thus liable for these additions which are called in question.
It is trite proposition that the burden of proof is on the revenue to bring home the charge of Benami ownership against any persons. Looking at the material and facts on record, no further evidence or material has been brought on record by the revenue in respect of NAPED record; Transporter; purchasers probabilities. The statements are replete with inconsistencies about the salary, vocation, no of vehicles possessed by assesses it is claimed by assessee that he does not own a car). These inconsistencies could have been further filled in by proper corroborative evidence, enquiries and investigation by revenue authorities. 39. In consideration of entire material available from record, facts, circumstances and rival submissions we are of the view that allegation of Benami has not been proved by the revenue against assessee on cogent material or evidence. No correlation of human conduct, preponderance of probabilities and human conduct with material available on record has been established. 6 shaky statements against assessee on their own do not constitute material enough to prove that assessee was Benami owner of these concerns. No adequate & cogent material is on record, from necessary agencies which are mentioned above. In absence of such material evidence or enquiries these mentioned above. In absence of such material evidence or enquiries these statements cannot be held to proving the fact or charge that assessee is a Benami owner of alleged concerns. Therefore, all the additions of peak investment and estimated profits from these alleged Benami concerns are deleted.”
Thus, respectfully following the aforesaid findings of the Tribunal which is applicable mutatis mutandis on the facts of the present case also, we hold that the addition made on account of peak amount of investment has rightly been deleted by the ld. CIT (A) as assessee cannot be held to be benami owner of the alleged concerns.
In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open Court on 23rd April, 2018.