Income Tax Appellate Tribunal - Lucknow
Rajesh Jolly, Lucknow vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
LUCKNOW BENCH "A", LUCKNOW
BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND
SHRI J SUDHAKAR REDDY, ACCOUNTANT MEMBER
ITA Nos.34 & 35/LKW/2011
Assessment Years:1999-2000 and 2000-01
Shri. Rajesh Jolly v. Income Tax Officer IV (1)
E-1434, Rajajipuram Lucknow
Lucknow
PAN:ACRPJ8172B
(Appellant) (Respondent)
Appellant by: Shri. Rakesh Garg, Advocate
Respondent by: Shri. Alok Mitra, D.R.
Date of hearing: 22.03.13
Date of pronouncement: 28/05/2013
ORDER
PER SUNIL KUMAR YADAV:
These appeals are preferred by the assessee against the respective order of the ld. CIT(A) for assessment years 1999-2000 and 2000-01. These appeals were heard together and are being disposed of through this consolidated order. We, however, prefer to adjudicate them one after the other for the sake of convenience.
2. In both the years, additions were made on account of payments made to Shri. Ajit Gupta, proprietor of M/s Apsara Cable Network for purchase of M/s Apsara Cable Network, which were not routed through proper accounts of the assessee.
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3. The facts in brief borne out from the record are that during the course of survey operation carried out on the business premises of the assessee, an agreement was found, according to which the assessee, Shri. Rajesh Jolly has paid `7.50 lakhs and `2.50 lakhs on 18.1.1999 and 27.1.1999 respectively relevant to the assessment year 1999-2000 as cost of purchase of M/s Apsara Cable Network, Narhi, Lucknow from one Shri. Ajit Gupta, S/o Shri. Vishambar Nath Gupta proprietor of M/s Apsara Cable Network, besides a sum of `1.70 lakhs was paid on 10.4.1999 relevant to the assessment year 2000-01 as cost of the said M/s Apsara Cable Network. The assessee has taken a stand before the Assessing Officer that the document found during the course of survey was only a proposed agreement for sale and assessee has not made any payment mentioned therein to Shri. Ajit Gupta. The Assessing Officer was not convinced with this explanation and he accordingly made addition of `10 lakhs in assessment year 1999-2000 and `1.70 lakhs in assessment year 2000-01.
4. Against the additions, the assessee preferred appeals before the ld. CIT(A), but did not find favour with him.
5. Now the assessee has preferred these appeals before the Tribunal with the submission that the document found during the course of survey was only an agreement for sale and the assessee has not made any payment mentioned therein. In support of his contention, the ld. counsel for the assessee has invited our attention to the agreement for sale appearing at pages 92 & 93 of the compilation of the assessee. Besides, he has also filed affidavits of the assessee; seller, Shri. Ajit Gupta; and witnesses of the agreement, Shri. Ajit Sinha and Shri. Sunil Kumar Pradhan. In all these affidavits it was stated that both the parties have agreed for sale/purase of M/s Apsara Cable Network, but payments mentioned in the agreement were not made by the assessee to the seller, Shri. Ajit Gupta. It :-3-:
was only a proposed agreement and the assessee has agreed to pay, but it was not paid. All these affidavits are available at pages 94 to 99 of the compilation of the assessee. The ld. counsel for the assessee has also invited our attention to the order of the Tribunal in the case of Ajit Kumar Gupta in whose hands addition was made for receipt of the aforesaid amount from the assessee and the Tribunal has examined all these documents, which are relied upon by the assessee before us, and the Tribunal has come to a conclusion that there was no sale of Cable Network business by M/s Apsara Cable Network to Shri. Rajesh Jolly in the assessment year under consideration. The Tribunal accordingly deleted the addition. The ld. counsel for the assessee contended that now the issue is covered by the aforesaid order of the Tribunal and once the Tribunal has taken a specific view with regard to a particular fact, it cannot be changed in the assessee's appeal. The copy of the order of the Tribunal is placed at pages 25 to 35 of the compilation of the assessee.
6. The ld. D.R., on the other hand, has placed heavy reliance upon the order of the ld. CIT(A).
7. Having given a thoughtful consideration to the rival submissions and from a careful perusal of record, we find that the Revenue authorities have placed heavy reliance upon the agreement to sell for making addition of `10 lakhs in assessment year 1999-2000 and `1.70 lakhs in assessment year 2000-01. In the affidavits the payment was denied and it was contended that the assessee has promised to pay the amount but has not paid. We have also examined the order of the Tribunal in the case of M/s Apsara Cable Network, the recipient of the aforesaid amount and we find that in that case the Tribunal has examined all these documents, which are relied upon by the assessee before us, in detail and has finally concluded that there was no sale of Cable Network by M/s Apsara Cable Network to :-4-:
the assessee, Shri. Rajesh Jolly in the assessment year under consideration. The Tribunal has accordingly deleted the addition. Since the Tribunal has given a specific finding of facts, contrary findings cannot be given in this case. For the sake of reference, we extract the findings of the Tribunal in the case of M/s Apsara Cable Network in ITA No. 446/LUC/2006, order dated 21.12.2006 as under:-
"14. We observe that the Assessing Officer has made said addition of Rs. 9 lakhs on the basis of Ikrarnama found during the course of survey operation u/s. 133A of the Act at the business premises of Jolly Brothers and also considering the statement of Shri. Ajeet Sinha who is one of the witnesses to the said "Ikrarnama". On the other hand, the assessee who is said to be seller of his business of cable network and Shri. Rajesh Jolly, proprietor of Jolly Brothers who is said to be purchaser of the business of the assessee have denied that any transaction of sale and purchase of the said business of cable network had taken place. They have stated that the said "Ikrarnama" was only a draft Document and it did not materialize. Besides, both of them have also filed affidavits, the copies of which are placed at pages 10 & 11 of the paper book filed by the assessee and at pages 21 & 22 of the paper book filed by the Department (affidavit of Shri. Ajeet Gupta) and at pages 12 & 13 of the paper book filed by the assessee and at pages 18 & 19 of the paper book filed by the Department (of Shri. Rajesh Jolly). On perusal of the said affidavits, both of them have stated that there were negotiations between assessee and Shri. Rajesh Jolly for sale/purchase of said business of cable TV network and a draft agreement was prepared, but the transaction did not materialize. We observe that assessee has denied receipt of any :-5-:
payment under the said "Ikrarnama" and Shri. Rajesh Jolly has also denied payment of any money to the assessee under the said "Ikrarnama". Further, we also observe on perusal of the statements of both the witnesses to the said "Ikrarnama", namely Shri. Ajeet Sinha and Shri. S. K. Pradhan, the copies of which are placed at pages 16 to 21 of the paper book filed by the assessee and at pages 6 to 11 of the paper book and at pages 15 to 17 of the paper book filed by the Department that both of them have stated that no money was paid by Shri. Rajesh Jolly to the assessee in front of them nor they are aware of receipt of money by the assessee form Shri. Rajesh Jolly. It is further stated by both of the said witnesses that they only signed as they knew the assessee, when the said "Ikrarnama"
was placed before them for their signature. We also observe that the Department has not disputed the fact that assessee had taken loan from Bank of India in respect of his said business of cable TV network and the documents were with Bank of India. On perusal of the bank statement, the copy of which is placed at pages 25 to 27 of the paper book, it is observed that loan had been taken in January 1998 and it was repaid in March 2003. Besides above, we also observe that the assessee also filed return of income for the assessment year under consideration, as per acknowledgement placed at page 28 of the paper book and also showed income from its cable network of Rs. 17,0777-. It is also observed that the said return was processed u/s. 143(1) of the Act on 17.8.2000, a copy of which is placed at page 29 of the paper book. It is also observed that the assessee filed return of income for subsequent assessment year as well, as is evident from acknowledgment placed at page 37 of the :-6-:
paper book and assessee also showed net income from his business of cable network of Rs. 19,13 87-. We observe from page 38 of the paper book that the said return was also processed u/s. 143(1) of the Act on 30.3.2001. From the above material on record, it is evident that the assessee was running business of. cable network in the assessment year under consideration. On the other hand, the Department has not brought any material on record, save and except the said "Ikrarnama", to establish that assessee had actually sold his business of cable network to Shri. Rajesh Jolly against a consideration of Rs.11.70 lakhs as stated in the said "Ikrarnama". We agree with the Id. D.R. that totality of circumstances has to be considered and the combined effect of all those circumstances is to be taken into account to determine the question as to whether or not a particular fact is proved as held by the jurisdictional High Court in the case of C.I.T. vs. Rameshwar Prasad Bagla (supra). The taxing authorities has to look into all the surrounding circumstances to find out reality of the transactions and recitals in the documents as held by the Hon'ble Supreme Court of India in the case of C.I.T. vs. Durga Prasad More (supra), the case on which the Id. D.R. also placed reliance. We are of the considered view that if we take into account all the documents and circumstantial facts into consideration, as placed on record, particularly returns filed by the assessee showing income from cable network not only in the assessment year under consideration, but also in the subsequent assessment year and also taking into account statements of the witnesses of the said "Ikrarnama" and the statement of the alleged purchaser of the business of cable network from the :-7-:
assessee and also statement of the assessee supported by affidavits, placed on record, vis-a-vis copy of "Ikrarnama", on which Department has placed reliance, we hold that there was no sale of cable network business by the assessee to Shri. Rajesh Jolly in the assessment year under consideration. Therefore, the addition made by the Assessing Officer of Rs.9 lakhs is not sustainable and accordingly we delete the same. Hence, grounds No 3 to 6 of the appeal taken by the assessee are allowed by deleting the addition of Rs.9 lakhs as confirmed by the Id. C.I.T (A)."
8. Since the Tribunal has given a finding of fact in the case of the recipient, the contrary findings cannot be given in the case of the buyer, the assessee. We, therefore, following the aforesaid order of the Tribunal, hold that there was no sale of Cable Network between the assessee and M/s Apsara Cable Network in the assessment year under consideration and therefore the assessee has not paid any amount to M/s Apsara Cable Network. Therefore, there is no question of any addition on account of alleged payment in both the years. Accordingly, we set aside the orders of the ld. CIT(A) and delete the additions.
9. In the result, both the appeals of the assessee stand allowed.
Order pronounced in the open court on 28/05/2013 Sd/. Sd/.
[J SUDHAKAR REDDY] [SUNIL KUMAR YADAV]
ACCOUNTANT MEMBER JUDICIAL MEMBER
DATED:28/05/2013
JJ:1305
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Copy forwarded to:
1. Appellant
2. Respondent
3. CIT(A)
4. CIT
5. DR
Assistant Registrar