High Court Of Delhi
CIT vs. Lalit Bhasin
Sections 69B, 260A
Asst. Year 1991-92
Swatanter Kumar & Madan B. Lokur, JJ.
IT Appeal No. 66 of 2002
3rd March, 2005
Jagdish R. Goel, for the Petitioner : S.K. Aggarwal, for the Respondent
SWATANTER KUMAR, J. :
The CIT is aggrieved from the order dt. 3rd Aug., 2001, passed by the Tribunal wherein it was held that the provisions of s. 69B of the IT Act (hereinafter referred to as the Act) were not applicable to the case of the assessee in relation to payment of Rs. 50,000 to the Calcutta Stock Exchange through the broker Ajit Kumar Dey of Calcutta. Consequently, the appeal preferred by the Department was dismissed by the Tribunal.
2. The necessary facts are that the assessee has filed his return of income-tax on 31st Oct., 1991 declaring the net income of Rs. 4,06,810 for the asst. yr. 1991-92. The matter was taken up for scrutiny and notice was issued under s. 143(2) which was served upon the assessee, whose representative appeared. During the course of assessment proceedings, it came to the notice of the AO that a ticket for Rs. 50,000 of Calcutta Stock Exchange from Shri Ajit Kumar Dey was purchased allegedly by the assessee, while according to (sic) the value of the ticket might have been above Rs. 10 lakhs. The assessee was called upon to explain this entry. Finally, the AO took the value of the ticket at Rs. 11,50,000 and gave the benefit of Rs. 50,000 paid by the assessee, added the balance income of Rs. 11 lakhs as unexplained investment expenditure and made addition thereto to the income of the assessee. Further, the penalty proceedings under s. 271(1)(c) of the Act were also initiated against the assessee. Upon appeal by the assessee, the CIT(A) deleted the addition of Rs. 11 lakhs as well as granted the following relief to the assessee :
“I have examined the contentions of the assesseeâs Authorised Representative. The assessee purchased a card from Calcutta Stock Exchange through Shri Ajit Dey. The payment was made to Calcutta Stock Exchange Association Ltd. which is supported by memo of the Calcutta Stock Exchange Association Ltd. in favour of Shri Ajit Dey. Shri Ajit Dey confirmed that he had purchased one stock exchange card of Calcutta Stock Exchange Association for a consideration of Rs. 50,000. The payment was made by demand draft No. 308124, dt. 24th April, 1990. In view of these pieces of evidence, it was not fair on the part of the AO to presume that the assessee paid Rs. 11,50,000 for purchase of a ticket. The burden of proving this fact was on the AO and the AO has not made any verification either from Calcutta Stock Exchange Association Ltd. or from Ajit Kumar Dey. Under the circumstances, addition made is deleted (relief Rs. 11,00,000).”
2.1. Aggrieved from the above order of the CIT(A), the Department went up in appeal before the Tribunal, which as already noticed, vide order dt. 3rd Aug., 2001, wherein it is held as under : “We have heard the rival parties and have perused the material placed on record. We have also examined the case laws relied upon. In the instant case, before making the addition, AO has not conducted any enquiry with the Calcutta Stock Exchange and the assessee has proved by all material at his disposal that the payment of Calcutta Stock Exchange Association Ltd. was only Rs. 50,000 through Shri Ajit Kumar Dey of Calcutta. This was the only consideration paid by the assessee. In the absence of any cogent material placed on record, we are of the opinion that the decision of Rajasthan High Court, supra, is not applicable to the facts of this case. We are in full agreement with the learned Authorised Representative that where no enquiry conducted, factum of understatement of investment not proved and hence provisions of s. 69B are not applicable. Keeping in view the totality of the facts and consideration of this case, we decline to interfere in the order passed by the CIT(A).”
This resulted in filing of the present appeal under s. 260A before this Court. The contention raised on behalf of the appellant is that the receipt issued by the Calcutta Stock Exchange Association Ltd. indicates the name of Shri Anandi Nath Dutta, and payment through Ajit Kumar Dey and as such the respondent has not produced any bona fide document to show that he had made the payment for himself and purchase of the ticket in his own name, thus the addition made by the AO was justified in law and on the facts of the case. On the other hand, learned counsel appearing for respondent contends that the payment was made by a bank draft, the receipt of which is admitted by Ajit Kumar Dey and as the balance consideration was not paid, the petitioner had not purchased the ticket as yet, as such the entire order of the AO is based upon conjectures and surmises.
The arguments addressed on behalf of the appellant suffers from a basic fallacy. Receipt No. 1936 issued by the Calcutta Stock Exchange Ltd. records the name of Ajit Kumar Dey and states that deposit and cost of unit No. 7 from Anandi Nath Dutta. The column of total cost for transfer deed has been scored out in the receipt. Cheque No. 25283 issued on Hong Kong Bank was issued by the respondent-assessee. If the AO had any doubt in regard to the bona fides of the assessee, nothing prevented the AO from exercising his powers under the Act and summoning the record of the Calcutta Stock Exchange and/or direct Anandi Nath Dutta to appear before him and produce relevant record in regard to receipt. The bare reading of the order of the AO shows that he arrived at a conclusion, primarily on imaginative basis and conjectures rather than on the basis of any record or books of account. The decision of the AO was rightly upset by the Tribunal wherein it was clearly recorded that Ajit Kumar Dey had confirmed that he had purchased one stock exchange card of Calcutta Stock Exchange Association Ltd. for a consideration of Rs. 50,000 and still the transaction had to be finalised and the payment was made on behalf of the assessee. This was the view taken even by the CIT(A) which has been rightly confirmed by the Tribunal. These are finding of facts based upon appreciation of evidence. It is a settled principle of law that Tribunal is the final fact-finding forum and the High Court normally would not interfere in such findings. Furthermore, the contention of the appellant is based entirely upon re-appreciation of evidence and no question of law arises for consideration in the present case.
For the reasons aforestated, we find no merit in this appeal and the same is dismissed, while leaving the parties to bear their own costs.
[Citation : 290 ITR 245]