Income Tax Appellate Tribunal - Delhi
Manoj Kumar Mittal, Delhi vs Dcit Circle 34(1), Delhi on 24 September, 2024
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "E", NEW DELHI
BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER,
AND
SHRI VIMAL KUMAR, JUDICIAL MEMBER
ITA NO. 3826/Del/2023
A.YR. : 2014-15
MANOJ KUMAR MITTLAL, VS. DCIT, CIRCLE 34(1),
H.NO. 18, POCKET 4 & 5, NEW DELHI
SECTOR-23, ROHINI,
DELHI - 110 085
(PAN: AAQPM3161N)
(APPELLANT) (RESPONDENT)
Appellant by : None
Respondent by : Shri Amit Kumar Jain, Sr. DR
Date of hearing : 23.09.2024
Date of pronouncement : 24.09.2024
ORDER
PER SHAMIM YAHYA, AM :
The Assessee has filed the Appeal against the Order of the Ld. CIT(Appeal)/NFAC, New Delhi dated 03.11.2023, relating to assessment year 2014-15 on the following grounds:-
1. That the AO and CIT(A) has erred in law and acted unreasonably in rejecting the allowance of Rs. 22,80,370/- claimed by the assessee u/s.
10(38) of the Act in his return of income, by holding that the long term capital gain by selling shares of penny stock companies on stock exchange was bogus and arranged through accommodation entries without bringing any material facts on records.
2. That the AO and CIT(A) has erred in law by not appreciating the evidences and documents produced before them to prove the genuineness of transaction and stating the transactions as suspicious based upon their own presumptions.
3. That the AO and CIT(A) has erred in law by taking the Investigation Report of Mumbai wing as the sole basis for rejecting the claims of the assessee, even though the assessee is nowhere related to any person mentioned in the report of the Investigation Wing in any manner whatsoever.
4. On the facts and circumstances of the case and in law, the AO and CIT(A) has erred and acted unreasonably in law by violating the principle of natural justice by not providing sufficient opportunity of being heard to the assessee.
5. It is, therefore, prayed that the order of the CIT(A) and AO may be set aside to the above extent.
2. Briefly stated facts are that assessee has filed his return of income on 28.10.2014, declaring total income of Rs. 37,02,540/-. During the year under consideration, as per the information received from Investigation Wing, AO noted that assessee has sold 5000 shares of M/s Turbo Tech Engineers Limited, for a sale consideration of Rs. 22,98,150/- during the year under consideration. Further, AO noted that assessee had admitted the above as LTCG exemption of Rs. 22,80,370/- u/s. 10(38) of the Act in the return of income filed for AY 2014-15. As per information available with the department M/s Turbo Tech Engineers Limited is a penny stock company and the assessee has claimed bogus LTCG. Accordingly, the case was reopened u/s. 147 of the Act and a notice u/s. 148 of the Act was issued to the assessee on 30.03.2021 requiring him to file his return of income. In response thereto, assessee has filed his return of income and subsequently, a notice u/s. 143(2) of the Act was issued 2 on 27.03.2022. After elaborately discussing the modus operandi, the AO concluded as under:-
"..6.4 In the case of assessee, it clearly proved that it is only accommodation entry to infuse unaccounted money of Rs. 22,98,150/- into books of accounts by way of long term capital gain of Rs. 22,80,370/- claimed as exempt u/s. 10(38) of the I.T. Act during the year under consideration. The declaration of long term capital gain by the assessee through penny stocks which were involved in providing accommodation entries are held as shame share transactions. Accordingly, as per section 68 of the Income Tax Act where any sum credits in the books of an assessee maintained for any previous year and the assessee offers no explanation about the nature and source of the same or the explanation offered by him is not satisfactory in the opinion of the AO, the sum so credited may be charged to income tax as the income of the assessee of that previous year.
6.5 In view of the facts and mentioned above, unaccounted money of Rs. 22,98,150/- is treated as cash credits of the assessee under section 68 of the Act r.w.s. 115BBE. Hence, the amount of Rs. 22,80,370/- shown as LTCG and claimed exemption u/s. 10(38) is withdrawn and entire sale consideration of Rs. 22,98,150/- pertaining to AY 2014-15 which is claimed bogus LTCG is assessed u/s. 68 of the Act under the head Income from Other Sources."
3. Upon assessee's appeal, Ld. CIT(A) confirmed the action of the AO by concluding as under:-
"...7.5. Accordingly, applying the judicial principles outlined in the earlier paragraphs to the facts of the case it is seen that the primary onus to prove the source of the money and necessary evidences to support credit entries u/s. 68 or section 69 of the Act is on the appellant. The Hon'ble Supreme Court has further held that explanation offered by the appellant should be carefully examined by the AO to ascertain whether all the ingredients of the onus are proved 3 by the appellant or not. The appellant is required to discharge the onus by producing evidence and an explanation that are comprehensive and accurate. In this case it is seen that no explanation has been provided by the appellant during the appellate proceedings. The contentions of the appellant raised in the ground of appeal is not supported by any evidence or documents.
7.6 In spite of numerous opportunities given, the appellant has not responded to any of the notices issued in the appellate proceedings. Accordingly, it is clear that the appellant has not discharged the burden of proof as required under the respective provisions to explain the source of the credit in the bank account. Hence the Grounds of Appeal are Not Allowed.
7.7 In view of the discussion in the preceding paragraphs, I am constrained to concur with the AO's findings of fact and decisions thereof, more particularly in the absence of any meaningful and worthwhile submissions/documentations even during the instant appellate proceedings, to counter effectively the position adopted by the AO on the concerned issues and reduced in writing in the assessment order. It is trite that an appellate authority is essentially called upon to balance the two sides of an argument presented before him as held in Nirmal Singh and Others of the Hon'ble Punjab and Haryana High Court [Cr No. 3791 of 2013 (O&M) dated 01.05.2014] and in the absence of any reasonable, cogent and valid arguments/contentions advanced by the appellant in the instant appeal to counter the AO's decision, the order passed u/s 147 of the Act dated 31.03.2022 is upheld."
4. Aggrieved with the above order of the Ld. CIT(A), Assessee is in appeal before us.
5. Despite notice of hearing, none appeared on behalf of the assessee, hence, we are disposing of the appeal of the assesse exparte qua the assessee.
6. We have heard the Ld. DR and perused the records.
46.1 We find that in the instant case, the AO noted that it is clearly proved that it is only accommodation entry to infuse unaccounted money of Rs. 22,98,150/- into books of accounts by way of long term capital gain of Rs. 22,80,370/- claimed as exempt u/s. 10(38) of the I.T. Act during the year under consideration. AO further noted that the declaration of long term capital gain by the assessee through penny stocks which were involved in providing accommodation entries are held as shame share transactions. Accordingly, AO observed that as per section 68 of the Income Tax Act where any sum credits in the books of an assessee maintained for any previous year and the assessee offers no explanation about the nature and source of the same or the explanation offered by him is not satisfactory in the opinion of the AO. Hence, he rightly treated the unaccounted money of Rs. 22,98,150/- by treating it as cash credits of the assesssee under section 68 of the Act and accordingly, the amount of Rs. 22,80,370/- shown as LTCG and claimed exemption u/s. 10(38) was withdrawn and the entire sale consideration was assessed u/s 68 of the Act under the head income from other sources. We further noted that in assessee's appeal before the ld. CIT(A), Ld. CIT(A) noted that despite numerous opportunities, assessee has not discharged the burden of proof as required in accordance with law to explain the source of the credit in the bank account and in the absence of any reasonable, cogent and valid arguments / contentions advanced by the appellant in the present appeal, the AO's decision was rightly upheld by the Ld. CIT(A). In view of aforesaid factual matrix, we 5 are of the considered view that Ld. CIT(A) has passed a well reasoned order, which does not need any interference on our part, hence, we uphold the same and accordingly, reject all the grounds raised by the assessee in the instant appeal.
7. In the result, the Assessee's appeal is dismissed in the aforesaid manner.
Order pronounced on 24/09/2024.
Sd/- Sd/-
(VIMAL KUMAR) (SHAMIM YAHYA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
SRB
Copy forwarded to:-
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR, ITAT
Assistant Registrar
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