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2016 (1) TMI 230 - PUNJAB AND HARYANA HIGH COURT

2016 (1) TMI 230 - PUNJAB AND HARYANA HIGH COURT - TMI - Benami transaction - there was no evidence of any type whether Shri Nalnish Aggarwal was a genuine party to the agreement and the payments were actually made by him as per AO - ITAT deleted the addition - Held that:- We find that the CIT(A) as well as the Tribunal had not adverted to the reasons given by the Assessing Officer while holding that the transaction on behalf of the Nalnish Aggarwal was not benami. The reasons recorded by CIT(A) .....

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en for the respondent-assessee to produce any evidence in terms of Rule 46A of the Income Tax Rules, 1962 to substantiate that the transaction was genuine and Shri Nalnish Aggarwal was not benami of the assessee - Decided in favour of revenue for statistical purposes. - ITA No. 40 of 2010 (O&M) - Dated:- 18-9-2015 - MR. AJAY KUMAR MITTAL MR RAMENDRA JAIN, JJ. For The Appellant : Ms. Urvashi Dhugga, Advocate For The Respondent : Mr. Rajesh Garg, Sr. Advocate with Ms. Nimrata Shergill, Advocate Aj .....

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#39;ble ITAT is correct in deleting the addition made by the Assessing Officer, holding that assessee cannot be said to be benami of Shri Nalnish Aggarwal, whereas Shri Nalnish Aggarwal was neither produced before the AO nor any evidence was given in support of his capacity to make payment of ₹ 20 lakhs? ii) Whether on the facts and in the circumstances of the case and in law, the order of the Hon'ble ITAT is correct in deleting the above addition made by the Assessing Officer, in the .....

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narrated in the appeal may be noticed. A survey under section 133A of the Act was conducted at the business premises of M/s Chandigarh Overseas Pvt. Limited wherein certain documents were impounded as under:- i) An agreement dated 1.1.2005 between M/s Chandigarh Overseas Pvt. Limited through its director Shri Somesh Chawla and Shri Rajiv Kumar son of late Shri Sher Chand Manuja and Shri Nalnish Aggarwal son of Shri Nathru Ram. According to this document, the first party had received ₹ 25 l .....

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arwal and he was introduced to him by M/s Chandigarh Overseas Limited. He also submitted that he had invested only ₹ 5 lacs from the sale proceeds of H.No.886 at Panipat. The balance of ₹ 20 lacs were invested by Shri Nalnish Aggrwal (Rs. 4 lacs by cheque of HDFC Bank, Sector 35, Chandigarh, ₹ 6 lacs by cheque of Bank of India,Sector 16, Chandigarh and balance ₹ 10 lacs in cash). The Assessing Officer vide order dated 24.12.2007, Annexure A.1 made an addition of ₹ 2 .....

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Shri Aggarwal. The assessee's contention that he invested ₹ 5 lacs from the sale proceeds of H.No.886 at Panipat was rejected by the Assessing Officer on the ground that according to the purchase deed of the said property, the assessee was neither the purchaser nor did he submit any evidence to show that he was owner of the said property. The appeal filed by the assessee before the Commissioner of income Tax (Appeals) [(CIT(A)] was allowed vide order dated 17.10.2008, Annexure A.2. Th .....

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have heard learned counsel for the parties. 4. Learned counsel for the revenue submitted that the Assessing Officer while holding that Shri Nalnish Aggarwal was benami of the assessee had taken into consideration various facts as mentioned in paras 3.5 and 3.6 of its order. On appeal filed by the assessee, the CIT(A) reversed the findings without controverting the aforesaid reasons. The findings were upheld by the Tribunal. The findings recorded by the Assessing Officer are as under:- 3.5 For a .....

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; 6,00,000/- dated 1.1.2005 was issued from the account of Mr. Nalnish Aggarwal in favour of M/s Chandigarh Overses Pvt. Limited. It was cleared on 4.1.2005 through Andhra Bank, Sector 34, Chandigarh. Information was asked under section 133(6) from HDFC Bank. In response to this HDFC Bank stated that no such account exists in the name of Nalnish Aggarwal, House No.559, Sector 10, Panchkula in their Branch. 3.6 The submissions of the assessee have been duly considered which is not acceptable. It .....

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t but he failed to do so. Moreover, the inquiries made by the department prove that Shri Nalnish Aggarwal does not reside at the given address mentioned in the agreement. The person naming Mr.A.K.Kedia staying at that address had mentioned that he does not know anything about Shri Nalnish Aggarwal. Thus, all the above facts prove that either Shri Nalnish Aggarwal does not exist or the assessee had used the name of any existing person for benami transaction with M/s Chandigarh Overseas.The enquir .....

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s unaccounted money. Moreover the account from which ₹ 6 lacs have been withdrawn was opened on 1.1.2005 i.e. on the same day of the agreement with M/s Chandigarh Overseas. 3.7 In view of all above, it is clear that here is no evidence of any type whether Shri Nalnish Aggarwal was a genuine party to the agreement and the payments were actually made by him. Therefore,it is held that the whole of the amount of the agreement with M/s Chandigarh Overseas (P) Limited i.e. rs.25,00,000/- belongs .....

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ific opportunity was given to the assessee to prove that the assessee is not a benami. I am satisfied that the case of the assessee get covered under the circumstances mentioned in Rule 46A. Moreover, the documents which have been submitted by the assessee are not such which can be fabricated, for example, sale deed, copy of return of Shri Nalnish Aggarwal, copy of passport of Shri Nalnish Aggarwal etc. These documents go to the root of the matter and deserve to be admitted. 16. The assessee has .....

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ly. It is in the normal business relationship that many persons come together for making a joint investment. It is also to be noted that the documents were found in the premises of M/s Chandigarh Overseas Pvt. Limited. The agreement clearly indicates that there are two persons i.e. Shri Rajiv Kumar Manuja and Shri Nalnish Aggarwal. If Shri Manuja has responded and cooperated with the department that does not mean that investment made by Shri Nalnish Aggarwal is made by Shri Manuja. It was obliga .....

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er was not justified to treat investment made by Shri Nalnish Aggarwal as an investment/undisclosed income of Shri Rajiv Manuja i.e. the assessee. 6. While affirming the findings recorded by the CIT(A), the Tribunal noticed thus:- 4.There is a finding in the impugned order that the impugned addition was made merely on the basis from inquiry from one Shri Kedia and no specific opportunity was given to the assessee to prove that the assessee was not benami. There is a further finding that the natu .....

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t is perused, we have found that it is between Shri Rajiv Kumar i.e. the assessee and M/s Chandigarh Overseas Pvt. Limited wherein there is a mention of receipt of ₹ 25 lakhs, the details of which has also been given. There is a certificate from Chandigarh Overseas Pvt. Limited that the amount of ₹ 5 lakhs was invested by the assessee. In this affidavit of Smt.Tarawanti, there are details and the details of PAN number and cash payment of ₹ 26 lakhs. The sale deed clearly mentio .....

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