S.Mangalchand Jain (HUF) , Bangalore v. The Income Tax Officer ward-2(2)(5), Bangalore

ITA 1731/BANG/2017 | 2009-2010
Pronouncement Date: 27-11-2017 | Result: Allowed

Appeal Details

RSA Number 173121114 RSA 2017
Assessee PAN AAJHS3510E
Bench Bangalore
Appeal Number ITA 1731/BANG/2017
Duration Of Justice 2 month(s) 30 day(s)
Appellant S.Mangalchand Jain (HUF) , Bangalore
Respondent The Income Tax Officer ward-2(2)(5), Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 27-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted A
Tribunal Order Date 27-11-2017
Last Hearing Date 15-11-2017
First Hearing Date 15-11-2017
Assessment Year 2009-2010
Appeal Filed On 28-08-2017
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL SMC A BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER ITA NO. 1 731 /BANG/2017 ASSESSMENT YEAR : 200 9 - 1 0 S. MANGALCHAND JAIN (HUF) NO.106-107 1 ST FLOOR RAJALAKSHMI COMPLEX MAMULPET BENGALURU 560 053. PAN: AAJHS 3510E VS. THE INCOME TAX OFFICER WARD 2(2)(5) [FORMERLY WARD 1(3)] BENGALURU. APP ELLANT RESPONDENT APP ELLANT BY : SMT. SUMAN LUKAR CA RESPONDENT BY : SHRI VIKAS SURYAWANSHI ADDL. CIT(DR) DATE OF HEARING : 16.11.2017 DATE OF PRONOUNCEMENT : 27 .11.2017 O R D E R THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF THE CIT(APPEALS) INTER ALIA ON THE FOLLOWING GROUNDS:- 1. THE LEARNED ASSESSING OFFICER HAD ERRED IN PAS SING THE ORDER IN THE MANNER PASSED BY HIM AND THE LEARNED C OMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE SAME. THE IMPUGNED ORDERS BEING BAD IN LAW VOID AB-INITIO' A RE REQUIRED TO BE QUASHED. 2.1 IN ANY CASE THE CONDITIONS PRECEDENT FOR THE I SSUE OF NOTICE U/S. 148 OF THE ACT BEING ABSENT THE RE-OPE NING OF ASSESSMENT BECOMES BAD IN LAW AND CONSEQUENTLY THE ORDER AS PASSED/CONFIRMED BEING ALSO BAD IN LAW IS REQUIRED TO BE QUASHED. ITA NO.1731/BANG/2017 PAGE 2 OF 5 2.2 IN ANY CASE AND WITHOUT PREJUDICE THE LEARNED ASSESSING OFFICER HAD ERRED IN NOT PASSING THE SEPARATE SPEAK ING ORDER DISPOSING OF THE OBJECTIONS RAISED BY THE APPELLANT AND THE LEARNED CIT(A) INSTEAD OF QUASHING THE ORDER HAS ERRED IN C ONFIRMING THE SAME. THE IMPUGNED ORDER WHICH WAS PASSED NOT FOLLO WING THE BINDING DICTUM OF HONOURABLE SUPREME COURT BECOMES BAD IN LAW AND IS LIABLE TO BE QUASHED. 3.1 IN ANY CASE THE ORDER PASSED IN GROSS VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE AND FAIR PLAY ESPECI ALLY IN THE ABSENCE OF THE CROSS EXAMINATIONS OF THE PERSONS WH OSE AVERMENTS ARE SOUGHT TO BE RELIED UPON BY THE ASSES SING OFFICER WHILE PASSING THE ORDER MAKES THE ORDER TOTALLY BA D IN LAW AND LIABLE TO BE CANCELLED. 3.2 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS INSTEAD OF QUASHING THE IMPUGNED ORDER HAS JUST CO NFIRMED THE ORDER OF ASSESSING OFFICER WITHOUT PROPERLY CONSIDE RING THE FACT AND CIRCUMSTANCES OF THE CASE ARGUMENTS OF THE APP ELLANT AND THE LAW APPLICABLE. 3.3. IN ANY CASE AND WITHOUT PREJUDICE THE ORDERS PASSED BY THE AUTHORITIES BELOW BEING CONTRARY TO BINDING DICTUM OF THE JURISDICTIONAL HIGH COURT ARE BAD IN LAW AND ARE LI ABLE TO BE QUASHED. 4. THE ASSESSING OFFICER HAD IN ANY CASE ERRED IN TREATING A SUM OF RS. 11 05 126/- BEING SALE CONSIDERATION ON SALE OF SHARES AS 'INCOME FROM OTHER SOURCES' AND THE LEARNED COMM ISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE SA ME. THE ACTION OF AUTHORITIES BELOW HAS NO SUPPORT IN LAW; IS CONTRARY TO FACTS AND EVIDENCE AVAILABLE AND THEREFORE DESERVES TO BE REJECTED. 4.2 IN ANY CASE AND WITHOUT FURTHER PREJUDICE THE AUTHORITIES BELOW HAVE ERRED IN: A) TAXING/CONFIRMING THE ENTIRE SALE CONSIDERATION RECEIVED ON SALE OF SHARES AS INCOME UNDER THE HEAD OTHER SO URCES. B) NOT CONSIDERING THE FACT THAT THE APPELLANT HAD EARNED SHORT TERM CAPITAL GAIN ON SALE OF SHARES AND SUCH GAIN WAS OFFERED TO TAX. ITA NO.1731/BANG/2017 PAGE 3 OF 5 C) HOLDING WITHOUT BASIS THAT THE TRANSACTIONS IN S HARES ARE FRAUDULENT. D) ALLEGING WITHOUT ANY BASIS THAT THE APPELLANT HA S OBTAINED ACCOMMODATION ENTRIES AND APPELLANT'S OWN MONEY COM E BACK IN THE GUISE OF CAPITAL GAINS. THE CONCLUSIONS / OBSERVATIONS OF AUTHORITIES BELOW BEING TOTALLY ERRONEOUS AND WITHOUT BASIS BOTH ON FACTS A ND LAW IS TO BE DISREGARDED. 4.3 IN ANY CASE AND WITHOUT PREJUDICE THE ADDITION MADE IS EXCESSIVE. 5. THE SEVERAL OBSERVATIONS MADE AND VARIOUS CONCLU SIONS DRAWN BY THE LOWER AUTHORITIES IN THE COURSE OF ORD ER ARE WITHOUT BASIS AND EVIDENCE AND ARE MADE/DRAWN ON SURMISES PROBABILITIES AND CONJECTURES. SUCH OBSERVATIONS AND CONCLUSIONS BY QUASI- JUDICIAL AUTHORITIES HAVE NO SUPPORT IN LAW AND DES ERVE TO BE REJECTED IN TOTO. 6. THE APPELLANT HAD ACTUALLY SOLD SHARES THROUGH D EMAT ACCOUNT AND HAD EARNED CAPITAL GAIN THEREON AND SAM E NEEDS TO BE ACCEPTED AS SUCH. 7. THE APPELLANT DENIES THE LIABILITY TO PAY INTERE ST. THE INTEREST HAVING BEEN LEVIED ERRONEOUSLY IS TO BE DE LETED. 8. IN VIEW OF THE ABOVE AND OTHER GROUNDS TO BE ADD UCED AT THE TIME OF HEARING IT IS REQUESTED THAT THE IMPUGN ED ORDER BE QUASHED OR ATLEAST THE INCOME FROM SHORT TERM CAPIT AL GAIN EARNED ON SALE OF SHARES AS RETURNED BY THE APPELLA NT BE ACCEPTED THE ASSESSMENT OF SALE CONSIDERATION RECEIVED ON SA LE OF SHARES AS INCOME FROM OTHER SOURCES BE DELETED AND THE INTERE ST LEVIED BE ALSO DELETED. 2. DURING THE COURSE OF HEARING THE LD. COUNSEL F OR THE ASSESSEE HAS INVITED MY ATTENTION THAT THE IMPUGNED ISSUES ARE S QUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN THE CASE OF SHRI ARVIND KUMAR MOOLCHAND IN ITA NO.509/BANG/2017 IN WHICH THE TRIBUNAL HAS RESTORED THE ISSUE TO TH E FILE OF THE AO HAVING OBSERVED THAT THE ADDITIONS WERE MADE ON THE BASIS OF STATEMENT OF MR. MUKESH CHOKSI WITHOUT CONFRONTING THE SAID STATEMENT TO ITA NO.1731/BANG/2017 PAGE 4 OF 5 THE ASSESSEE. THE TRIBUNAL ACCORDINGLY RESTORED TH E MATTER TO THE AO WITH A DIRECTION TO CONFRONT THE STATEMENT OF MR. MUKESH CHOKSI TO THE ASSESSEE AND THEREAFTER ALLOW HIM TO CROSS-EXAMINE MR. MUKES H CHOKSI AND THE ISSUE MAY BE ADJUDICATED AFRESH AFTER AFFORDING OP PORTUNITY OF BEING HEARD TO THE ASSESSEE. 3. THE LD. DR DID NOT DISPUTE THESE FACTS. 4. I HAVE CAREFULLY EXAMINED THE ORDER OF THE LOWER AUTHORITIES IN THE LIGHT OF THE ORDER OF THE TRIBUNAL ON THE IMPUGNED ISSUE AND I FIND THAT THE IMPUGNED ISSUE IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN THE AFORESAID CASE WHEREIN THE TRIBUNAL RESTORED THE MA TTER TO THE AO WITH CERTAIN DIRECTIONS. FOR THE SAKE OF REFERENCE WE EXTRACT THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL :- 5. HAVING CAREFULLY EXAMINED THE ORDERS OF LOWER A UTHORITIES IN THE LIGHT OF RIVAL SUBMISSIONS I FIND THAT DURI NG THE COURSE OF SEARCH CONDUCTED UPON THE MUKESH CHOKSI GROUP STAT EMENT OF MUKESH CHOKSI WAS RECORDED AND IN HIS STATEMENT HE HAS ADMITTED THAT HE WAS PROVIDING ACCOMMODATION ENTRIE S TO THOSE WHO WERE INTERESTED TO EARN CAPITAL GAIN. ON A CAR EFUL PERUSAL OF THE ASSESSMENT ORDER I FIND THAT THERE IS NO FINDI NG WITH REGARD TO THE SUPPLY OF STATEMENT OF MUKESH CHOKSI TO THE ASS ESSEE. MOREOVER NOTHING IS AVAILABLE ON RECORD WHEREFROM IT COULD BE INFERRED THAT ASSESSEE WAS EVER ALLOWED TO CROSS-EX AMINE MR. MUKESH CHOKSI. IT IS SETTLED POSITION OF LAW THAT STATEMENT OR THE EVIDENCE WHICH IS BEING RELIED UPON BY THE AO FOR M AKING THE ADDITION IN THE HANDS OF ASSESSEE THE SAME SHOULD BE CONFRONTED TO THE ASSESSEE AND THE ASSESSEE SHOULD BE ALLOWED TO CROSS- EXAMINE THE WITNESS IN THIS REGARD. 6. FROM A CAREFUL PERUSAL OF THE ORDERS OF LOWER AU THORITIES IT IS QUITE EVIDENT THAT STATEMENT OF MR. MUKESH CHOKS I WAS RELIED ON FOR MAKING THE ADDITION BUT ASSESSEE WAS NEVER ALLOWED TO CROSS-EXAMINE HIM. IN THESE CIRCUMSTANCES I AM OF THE VIEW THAT THE AO WAS NOT JUSTIFIED IN MAKING ADDITION IN THE HANDS OF ASSESSEE WITHOUT ALLOWING THE ASSESSEE TO CROSS-EX AMINE MR. MUKESH CHOKSI WHOSE STATEMENT WAS RELIED UPON FOR MAKING THE ITA NO.1731/BANG/2017 PAGE 5 OF 5 ABOVE ADDITIONS. I ACCORDINGLY SET ASIDE THE ORDER OF CIT(APPEALS) AND RESTORE THE MATTER TO THE FILE OF AO WITH A DIRECTION TO FIRST CONFRONT THE STATEMENT OF MR. MU KESH CHOKSI TO THE ASSESSEE AND ALLOW HIM TO CROSS-EXAMINE MR. MUK ESH CHOKSI TO DIG OUT THE TRUTH IN THIS REGARD. ACCORDINGLY THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5. SINCE THE TRIBUNAL HAS TAKEN A PARTICULAR VIEW I N SIMILAR SET OF FACTS WE FIND NO REASON TO TAKE A CONTRARY VIEW IN THIS A PPEAL. ACCORDINGLY WE SET ASIDE THE ORDER OF THE CIT(APPEALS) AND RESTORE THE MATTER TO THE AO WITH A DIRECTION TO READJUDICATE THE ISSUE AFRESH I N TERMS OF DIRECTIONS ISSUED BY THE TRIBUNAL IN THE AFORESAID CASE. NEED LESS TO MENTION HERE THAT PROPER OPPORTUNITY OF BEING HEARD SHOULD BE AF FORDED TO THE ASSESSEE. 6. IN THE RESULT APPEAL BY THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF NOVEMBER 2017. SD/- ( SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE DATED THE 27 TH NOVEMBER 2017. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDE NT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT BANGALORE.