Smt ALKA D.Jain , Bangalore V. Income TAx Officer Ward-5(2)(1), Bangalore

ITA 1279/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7160 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 08-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKAS SURYAWANSHI BE NGALURU
• Assessee Lawyers: P DINESH
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC B BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO. 1279/BANG/2017 ASSESSMENT YEAR : 2009 - 10 SMT. ALKA D. JAIN, PROP: M/S. VARDHAMAN AUTOMOBILES, NO.135/5, SSL BUILDINGS, A.M. ROAD, KALASIPALYAM, BENGALURU 560 002. PAN: ABQPJ 5069M VS. THE INCOME TAX OFFICER, WARD 5(2)(1), BENGALURU. APP ELLANT RESPONDENT APP ELLANT BY : SHRI P. DINESH, ADVOCATE RESPONDENT BY : SHRI VIKAS SURYAWANSHI, ADDL.CIT(DR)(ITAT), BE NGALURU 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 THE ORDER OF THE CIT(APPEALS) INTER ALIA ON THE FOLLOWING GROUNDS: 1. CIT(A) GROSSLY ERRED IN IGNORING THE PLEA OF THE APPELLANT ON THE VERY JURISDICTION OF THE AO FOR RE-OPENING U NDER S.147 URGED IN THE APPEAL & ARGUED AND HENCE THE IMPUGNED ORDER IS UNSUSTAINABLE. 2. THE ORDER OF CIT (A) INSOFAR AS IT IS PREJUDICIA L TO THE INTEREST OF THE APPELLANT, IS BAD AND UNSUSTAINABLE IN THE EYE OF LAW AS THE SAME IS PASSED WITHOUT APPLICATION OF MI ND &CONTRARY TO THE SETTLED POSITION OF LAW LAID DOWN BY THE JUR ISDICTIONAL HIGH COURT. ITA NO.1279/BANG/2017 PAGE 2 OF 4 3. THE ORDER OF CIT(A) IS NOT ONLY WITHOUT APPLICAT ION OF MIND & ALSO CONTRARY TO FACTS BORNE OUT ON RECORD, THAT THE APPELLANT HAD DECLARED THE INVESTMENT DURING THE RE LEVANT YEAR BY DULY REFLECTING THE INVESTMENT IN BOOKS & MOREOVER, THE APPELLANT HAD SOLD THE SHARES IN DE-MAT FORMAT AFTE R HOLDING THE SAME FOR MORE THAN A YEAR AND HENCE THE CLAIM OF EX EMPTION UNDER S.10(38) WAS IN ORDER. 4. THE CIT(A) ALSO ERRED IN IGNORING THE PLEA OF TH E APPELLANT THAT THE AO HAD MADE ADDITION WITHOUT PROVIDING AN OPPORTUNITY TO CROSS EXAMINE THOSE PERSONS WHOSE STATEMENTS WER E USED AGAINST HIM NOR WAS AO'S ACTION PROPER OR ADMISSIBL E WHEN HE USED A LETTER FROM VP, M/S. NSE. 5. WITHOUT PREJUDICE, THE CIT(A) OUGHT TO HAVE APPR ECIATED THAT THE APPELLANT HAD SATISFIED THE TESTS LAID DOW N BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. BHORU KA ENGINEERING SERVICES FOR CLAIMING EXEMPTION UNDER S .10(38) OF THE ACT. 6. CIT(A) ALSO ERRED IN IGNORING THE AFORE-SAID DEC ISION AS ALSO A CATENA OF OTHER ORDERS/DECISIONS RELIED ON B Y THE APPELLANT, WITHOUT QUOTING ANY REASON/S AND HENCE THE IMPUGNED ORDER IS UNSUSTAINABLE. 7. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING, THE APPELLANT PRAYS THAT THE APPEA L MAY BE ALLOWED. 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 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 ITA NO.1279/BANG/2017 PAGE 3 OF 4 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 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 ITA NO.1279/BANG/2017 PAGE 4 OF 4 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. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.