1 A.F.R. Court No. - 35 Case :- INCOME TAX APPEAL No. - 338 of 2016 Appellant :- Sh. Rajnish Jain Respondent :- Commissioner Of Income Tax & Another Counsel for Appellant :- Suyash Agrawal Counsel for Respondent :- Krishna Agarwal Hon'ble Bharati Sapru,J. Hon'ble Saumitra Dayal Singh,J. Delivered by Hon'ble Saumitra Dayal Singh, J. This appeal has been filed by assessee under Section 260A of Income Tax Act, 1961 (hereinafter referred to as Act) against order of Income Tax Appellate Tribunal, Delhi Bench, New Delhi dated 19.06.2009 for Assessment Year 1998-99 raising following questions of law:- (A) Whether on facts and circumstances of case, ITAT was correct to confirm proceedings u/s 148 of Act against appellant? (B) Whether assessee have ignored mode of purchase of 3500 shares of M/s KRS Financial Limited through M/s S.K. Garg and Company Delhi per contract note dated 05.04.1996 and Bill No. M-85 dated 15.04.1996 as well as letter of K.R.S. Financial Limited dated 28.08.1996 regarding transfer of shares in name of appellant and also corresponding contract note dated 30.05.1997 of Surinder Singh Mehta for sale of shares by Bill No. 272 dated 20.06.1997, I.T.A.T. rightly held sale of 3500 shares was bogus one? (C) Whether ITAT rightly made addition of Rs. 6,06,069/- in hands of appellant specially when burden of purchase and sale of 3500 shares of M/s K.R.S. Financial was discharged bu Department relying statement of M/s S.K. Garg and Company and M/s Surinder Singh Mehta which were not corroborated written any evidence? (D) Whether ITAT was legally justified in affirming reassessment order passed by A.O. u/s 147/143(3) of Act when there was no reason to believe nor any 2 tangible material with A.O. to form opinion that income of assessee has escaped assessment? (E) Whether ITAT was legally justified in affirming reassessment order passed by A.O. u/s 147/143(3) of Act ignoring fact that A.O. framed assessment u/s 147 without carrying out any inquiry and without affording opportunity to assessee to cross examine witness? At very outset Sri Suyash Agarwal, learned counsel for assessee stated he would be pressing questions of law namely A, D and E only. assessee declared to have derived his income for previous year relevant to Assessment Year 1998-99 from salary payment, interest and capital gains. In respect of capital gains claimed by assessee had disclosed purchase of 3,500 shares of M/s KRS Financial Ltd. @ Rs. 21 per share aggregating to Rs. 74,235/- from broker M/s S.K. Garg & Company vide it's bill dated 15.04.1996. shares were claimed to have transferred in name of assessee on 13.06.1996. said shares were then claimed to have been sold through another broker S.S. Mehta on 30.05.1997 @ Rs. 175 per share. While assessee had disclosed purchase of aforesaid shares through cash payment, it received sale proceeds amounting to Rs. 6,06,069/-, through cheque. It then appears that reassessment proceedings were initiated against assessee under Section 147 of Act on basis of reasons to believe recorded in pursuance of information received by Assessing Officer from DDIT (Inv, Gurgaon) dated 10.03.2003. According to that information, broker S.S. Mehta had been investigated in 3 certain other proceedings wherein he allegedly made statement of having provided accommodation entries against payment of commission. It is also on record that before assessing authority, assessee submitted letter dated 10.03.2004 by which it offered to surrender entire amount of Rs. 6,06,069/- subject to non-initiation of penalty proceedings under Section 271(1)(c) of Act. In consequential reassessment order, Rs. 6,06,069/- was added to undisclosed income of assessee disbelieving claim of capital gains. Against assessment order, assessee filed first appeal that came to be decided by CIT(Appeals), Ghaziabad vide it's order dated 16.03.2005. CIT (Appeals) held that additions made on basis of information furnished by DDIT, Gurgaon could not be sustained inasmuch as according to CIT (Appeals) broker S.S. Mehta had at no stage stated or admitted to have provided any accommodation entry to assessee as alleged by Assessing Officer. CIT (Appeals) dealt with letter dated 10.03.2004 written by assessee and held that assessee could not be bound by surrender made in that letter because revenue had chosen to initiate penalty proceedings against assessee. At same time, CIT (Appeals) upheld jurisdiction of Assessing Officer to initiate reassessment proceedings against assessee. revenue carried matter to Tribunal. Tribunal after considering 4 entire material and facts on record first made observations and recorded findings disbelieving claim of purchase and sale of shares in question in absence of cogent and reliable evidence to establish genuineness of transaction. Then, Tribunal further found that assessee had himself surrendered amount of Rs. 6,06,069/- during course of assessment proceedings and therefore it did not remain open to assessee to dispute correctness of addition made by Assessing Officer. Sri Suyash Agarwal, learned counsel for assessee submits that CIT (Appeals) had categorically found that broker S.S. Mehta had never stated that he had provided any accommodation entry to assessee. Therefore, in his submission, addition could not have been sustained merely on admission made by assessee which in any case was conditional and not binding on assessee in view of penalty proceedings initiated against him. Opposing aforesaid submission, Sri Krishna Agarwal, learned counsel for revenue submits, addition had been sustained by Tribunal on twin reasoning given by assessing authority. First, assessing officer had relied on statement made by broker S.S. Mehta and admission made by assessee. Then, according to learned counsel for revenue, Tribunal has sustained addition on twin reasoning given by assessing officer. Therefore, order of Tribunal does not suffer from any infirmity. 5 Having considered arguments so advanced by learned counsel for parties, we find that in first place, validity of reassessment proceedings was not issue raised by assessee before Tribunal. That issue had been decided against assessee by CIT (Appeals) which part of order was not challenged in appeal before Tribunal. Then, as to addition made on merits, we find that assessee had himself admitted to have written to assessing officer on 10.03.2004 and surrendered disputed amount. It is true that offer made by assessee in said letter was worded as being subject to condition that penalty proceedings may not be initiated against him. We find, fact that surrender had been made with condition to by peace may be relevant to and may be considered in penalty proceedings. present proceedings being quantum proceedings we do not find any error in order of Tribunal in so far as Tribunal has sustained addition not only on ground of surrender made by assessee but also after disbelieving genuineness of transaction of purchase and sale of shares. In view of matter, we do not find any error in order of Tribunal. Accordingly, question nos. and E are answered in affirmative i.e. in favour of revenue and against assessee. As to question no. D, same pertains to validity of initiation of reassessment proceedings. That ground of appeal was decided against assessee by CIT (Appeals). It 6 was not dealt with or decided by Tribunal. Hence question as framed does not arise in this appeal. In view of above, instant appeal lacks merit and is dismissed. Order Date :- 1.12.2017 A. Singh Rajnish Jain v. Commissioner of Income-tax & Another