Swan Kumar Mehta (HUF) , Bangalore V. The Income Tax Officer Ward-5(2)(2), Bangalore

ITA 1627/BANG/2018

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 0770 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 16-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H L SOUMYA ACHAR
• Assessee Lawyers: H N KHINCHA
• Keywords: Unexplained cash credit; Income from undisclosed sources; Opportunity of being heard
• Section: 68; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH (SMC) : B ENGALURU SHRI JASON P BOAZ , ACCOUNTANT MEMBER I TA NO. 1627 / BANG/2 0 1 8 (ASSESSMENT YEAR: 20 1 4 - 15 ) SAWAN KUMAR MEHTA (HUF). NO.79, LAXMI VATIKA, 1 ST MAIN, 2 ND STAGE, WOC ROAD, BENGALURU . PAN: AAIHS 2044G VS. APPELLANT INCOME - TAX OFFICER, WARD 5( 2 )( 2 ), BENGALURU. RESPONDENT APPELLANT BY : SHRI H.N.KHINCHA, CA . RESPONDENT BY : SMT. H.L.SOUMYA ACHAR, ADDL.CIT(DR) DATE OF HEARING : 19 /09/2018 DATE OF PRONOUNCEMENT : 05 / 10 /2018 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - 5, BENGALURU, DATED 2 1 /0 3 /2018 FOR ASSESSMENT YEAR 20 1 4 - 1 5 . 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS UNDER: - 2.1 THE ASSESSEE - HUF FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 201 4 - 15 ON 0 8 / 01 /201 6 DECLARING INCOME OF RS. 2,79,280/ - FROM OTHER SOURCES AND CAPITAL GAINS OF RS.14,87,145/ - ON SALE OF SHARES CLAIMED AS EXEMPT U/S 10(38) OF THE INCOME - TAX ACT,1961 (IN SHORT THE ACT ). THE CASE WAS TAKE N UP FOR SCRUTINY AND THE ASSESSMENT WAS CONCLUDED U/S 143(3 ) OF THE ACT VIDE ORDER DATED 26 /12/201 6 , WHERE IN THE ASSESSEE S INCOME WAS DETERMINED AT RS. 18,06,430/ - IN VIEW OF THE ADDITION OF SALE PROCEEDS OF RS. 15,27,145/ - RECEIVED ON ACCOUNT OF 40,000 SH ARES OF M/S.KAILASH AUTO BE ING HELD TO BE AS CASH CREDITS U/S 68 OF THE ACT. ON APPEAL, THE CIT(A) - 5, BENGALURU, DISMISSED THE ASSESSEE S APPEAL VIDE THE IMPUGNED ORDER DATED 2 1 / 0 3 /2018. ITA NO. 16 27 /BANG/20 18 PAGE 2 OF 4 3.1 AGGRIEVED BY THE ORDER OF THE CIT(A) - 5, BENGALURU, DATED 2 0 / 3 /2018 FOR ASSESSMENT YEAR 201 4 - 15 , THE ASSESSEE HAS PREFERRED THIS APPEAL WHEREIN IT HAS RAISED THE FOLLOWING GROUNDS: - 3.2 DURING THE COURSE OF HEARING, THE LD.AR FOR THE ASSESSEE SUBMITTED THAT ON SIMILAR FACTS AND CIRCUMSTANCES, THE MATTER FOR CO NSIDERATION IS SQUARELY COVERED BY THE DECISION OF THE ITAT, KOLKATA BENCH IN ITS ORDER IN ITA N O.2394/KOL/2017 IN THE CASE OF PRAKASH CHAND BUTORI A . IT IS SUBMITTED THAT IN THE CITED CASE (SUPRA) ALSO, THE ASSESSEE, AN INDIVIDUAL, FILED HIS RETURN OF INC OME CLAIMING INCOME ON SALE OF SHARES AS EXEMPT U/S 10(38) OF THE ACT. ITA NO. 16 27 /BANG/20 18 PAGE 3 OF 4 THE ASSESSING OFFICER (AO) TREATED THE RECEIPT OF SALE CONSIDERATION AS UNACCOUNTED INCOME AND MADE AN ADDITION U/S 68 OF THE ACT. ON APPEAL THE CIT(A) UPHELD THE AO S ORDER. HOWEVER , ON FURTHER APPEAL, THE ITAT, KOLKATA BENCH ALLOWED THE ASSESSEE S APPEAL OBSERVING THAT THE ADDITION WAS UNSUSTAINABLE SINCE THE AO MADE THE ADDITION IN A ROUTINE AND MECHANIZED MANNER: MERELY ON SUSPICIONS BASED ON REPORT OF ENQUIRIES MADE BY THE INVEST IGATION DIRECTORATE OF DIT, KOLKATA, WITHOUT BRINGING THE SAME ON RECORD OR CONFRONTING THE ASSESSEE WITH OR SUPPLYING THE ASSESSEE COPIES OF THE DOCUMENTS RELIED UPON FOR MAKING THE ADDITION AND PROVIDING HIM OPPORTUNITIES FOR HIS REBUTTAL. IT IS PRAYED THAT IN VIEW OF THE ABOVE , THE ORDERS OF THE AUTHORITIES BELOW BE SET ASIDE AND THE ASSESSEE S APPEAL BE ALLOWED. 3.3 PER CONTRA, THE LD. DR FOR REVENUE SUBMITTED THAT ON SIMILAR FACTS AND CIRCUMSTANCES AS IN THE CASE ON HAND, ISSUE FOR CONSIDERA TION IS COVERED BY THE DECISIONS OF THE BENGALURU ITAT IN THE CASES OF ARVIND KUMAR MOOLCHAND IN ITA NO.509/BANG/2017 AND PUKHRAJ HASMUKHLAL IN ITA NO.1927/BANG/2017 WHEREIN THE TRIBUNAL HAS RESTORED THE ISSUE TO THE FILE OF THE AO HAVING OBSERVED THAT THE ADDITIONS WERE MADE BASED ON REPORTS OF THE KOLKATA INVESTIGATION DIRECTORATE OF THE DEPARTMENT AND STATEMENTS OF VARIOUS PERSONS WITHOUT CONFRONTING OR MAKING THEM AVAILABLE TO THE ASSESSEE FOR REBUTTAL. IN THOSE CASES, THE TRIBUNAL RESTORED THE MATTER TO THE FILE OF THE AO WITH THE DIRECTION TO CONFRONT THE ASSESSEE WITH THE REPORTS/DOCUMENTS/ STATEMENTS PROPOSED TO BE USED AGAINST THE ASSESSEE, ALLOW REBUTTAL THEREOF AND CROSS EXAMINATION OF PARTIES ON WHOSE TESTIMONY IS PROPOSED TO BE RELIED UPON AND THE MATTER BE ADJUDICATED AFRESH AFTER AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND TO ALSO FILE DETAILS/SUBMISSIONS IN THIS REGARD. 3.4 IN REJOINDER, THE LD.AR FOR THE ASSESSEE DID NOT DISPUTE THE PROPOSITION PUT FORTH BY THE LD. DR F OR RESTORING THIS ISSUE TO THE FILE OF THE AO FOR DE NOVO ADJUDICATION. ITA NO. 16 27 /BANG/20 18 PAGE 4 OF 4 3.5 I HAVE HEARD BOTH PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD INCLUDING THE JUDICIAL DECISIONS CITED AND THE ORDERS OF THE AUTHORITIES BELOW. TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE JUDICIAL DECISIONS CITED, I FIND THAT THE IMPUGNED ISSUE IS SQUARELY COVERED BY THE ORDERS OF THE BENGALURU ITAT IN THE CASES OF ARVIND KUMAR MOOLCHAND (SUPRA) AND PUKHRAJ HASMUKHLAL (SUPR A) . F OLLOWING THE AFORESAID ORDERS (SUPRA) , I SET ASIDE THE ORDERS OF THE AO AND RESTORE THE MATTER OF TREATMENT OF SALE PROCEEDS DECLARED ON SALE OF SHARES AS UNEXPLAINED CREDITS U/S 68 OF THE ACT TO THE FILE OF THE AO TO RE - ADJUDICATE THE ISSUE AFRESH; A FTER MAKING AVAILABLE TO THE ASSESSEE FOR HIS REBUTTAL ALL DOCUMENTS RELIED UPON BY REVENUE FOR MAKING THE ADDITIONS/DISALLOWANCES AND PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE FOR CROSS - EXAMINATION OF PERSONS WHOSE STATEMENTS ARE BEING RELIED UPON. IT IS ACCORDINGLY ORDERED. 4. IN THE RESULT, THE ASSESSEE S APPEAL FOR ASSESSMENT YEAR 201 4 - 15 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH OCTOBER , 2018 SD/ (JASON P BOAZ) ACCOUNTANT MEMBER PLACE : BENGALURU. D A T E D : 05 / 10 /201 8 SRINIVASULU, SPS COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME - TAX APPELLATE TRIBUNAL BANGALORE