Smt. Amita Dhupar, Bangalore V. The Income Tax Officer, Ward- 7(2)(5), Bangalore

ITA 1742/BANG/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0891 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 07-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GANESH R GHALE TO DEPA
• Assessee Lawyers: CHARAN KUMAR
• Keywords: Opportunity of being heard; Principle of natural justice; Accommodation entries; Onus to prove; Set aside; Capital Gains
• Section: 234B; 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - C BENCH : BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER ITA NO. 1 742 /BANG/201 9 ASSESSMENT YEAR : 20 1 1 - 1 2 SMT. AMITA DHUPAR, NO.13, 2 ND FLOOR, 10 TH MAIN, 6 TH CROSS, GURURAJA LAYOUT, BSK 3 RD STAGE, BENGALURU 560 085. PAN : ANWPD 1046 N VS. THE INCOME TAX OFFICER, WARD 7(2)(5), BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI. CHARAN KUMAR, CA REVENUE BY : SHRI. GANESH R. GHALE, ADVOCATE STANDING COUNSEL TO DEPARTMENT DATE OF HEARING : 18 . 11 .201 9 DATE OF PRONOUNCEMENT : 20 .1 2 .201 9 O R D E R THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-7, BENGALURU, DATED 30.05.2019 FOR ASSESSMENT YEAR 2011-12. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER:- 1. THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS OPPOSED TO LAW, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE ORDER IS PASSED IN HASTE, WITHOUT PROVIDING SUFFICIENT AND REASONABLE OPPORTUNITY OF BEING HEARD. 3. THE ORDER IS PASSED AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND THUS LIABLE TO BE QUASHED. 4. THE LD. ASSESSING OFFICER HAS GROSSLY ERRED IN ISSUING NOTICE UNDER SECTION 148 OF THE ACT MERELY BASED ON THE BORROWED BELIEF OF ANOTHER AUTHORITY, WITHOUT LAYING DUE EMPHASIS ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE LD. ASSESSING OFFICER HAS FAILED TO APPRECIATE THE PROVISIONS OF SECTION 147 WHICH CLEARLY APPLIES TO THE 'INCOME CHARGEABLE TO TAX THAT HAS ESCAPED ASSESSMENT' AND HAS FAILED TO FAILED TO UNDERSTAND THAT THE IMPUGNED CAPITAL GAINS WAS DULY DISCLOSE BY THE APPELLANT IN HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 AND HAS RIGHTFULLY ITA NO. 1742/BANG/2019 PAGE 2 OF 5 CLAIMED EXEMPTION UNDER SECTION 10(38) OF THE ACT WITH REGARD TO THE SAME. 6. THE LD. ASSESSING OFFICER HAS ERRONEOUSLY MADE THE ADDITION OF RS. 12,18,575/- MERELY ON THE BASIS OF PRESUMPTION AND CONJECTURE, INSTEAD OF CONSIDERING THE EVIDENCE OF SALE AND PURCHASE OF SHARES FURNISHED AND EXPLANATIONS PROVIDED BY THE APPELLANT. 7. THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE VIEW OF THE LD. ASSESSING OFFICER THAT THE IMPUGNED TRANSACTIONS AS BOGUS TRANSACTIONS MERELY ON THE GROUND THAT THE CONCERNED SCRIP WAS USED BY CERTAIN UNSCRUPULOUS STOCK BROKERS FOR PROVIDING ACCOMMODATION ENTRIES. 8. THE LD. CIT(A) AND LD. AO FAILED TO APPRECIATE THAT THE IMPUGNED TRANSACTIONS WERE MADE VIA PROPER BANKING CHANNELS AND ALL THE RELEVANT DOCUMENTS AND EXPLANATIONS WERE DULY PRODUCED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THEREBY, DISCHARGING HIS ONUS TO PROVE THE GENUINENESS OF THE TRANSACTION. 9. NOTWITHSTANDING THE ABOVE, THE LD. ASSESSING OFFICER AND THE LD. CIT(A) FAILED TO CONSIDER THE FACT THAT THE APPELLANT WAS NOT PROVIDED AN OPPORTUNITY TO CROSS EXAMINE THE STOCK BROKERS, DIRECTOR ETC. BASED ON WHOSE STATEMENT THE APPELLANT'S TRANSACTIONS WERE HELD TO BE BOGUS. 10. THE LD. ASSESSING OFFICER HAS ERRED IN NOT ABIDING BY THE HON'BLE CBDT'S INSTRUCTION ON PENNY STOCK MATTERS. 11. THE LD. CIT(A) ERRED IN UPHOLDING THE LEVY OF INTEREST UNDER SECTION 234AAND 234B OF THE ACT BY THE LD. ASSESSING OFFICER. 3. IN THE COURSE OF HEARING, IT WAS SUBMITTED BY THE LEARNED AR OF THE ASSESSEE THAT THE IMPUGNED ORDER OF THE CIT(A) IS NOT SUSTAINABLE BECAUSE THIS WAS THE ARGUMENT OF THE ASSESSEE BEFORE THE LEARNED CIT(A), AS NOTED BY HIM IN PARA 20.1 OF HIS ORDER THAT INFORMATION RECEIVED FROM DIT (INVESTIGATION), KOLKATA WAS NOT PROVIDED TO THE ASSESSEE AND RIGHT OF CROSS EXAMINATION OF THE PERSON WHO HAS CONFIRMED THAT THE TRANSACTION IS AN ACCOMMODATION WAS ALSO NOT GIVEN TO THE ASSESSEE BUT IN SPITE OF THIS SPECIFIC CONTENTION RAISED BEFORE CIT(A), THERE IS NO FINDING OF THE LEARNED CIT(A) ON THESE TWO ASPECTS. SHE PLACED RELIANCE ON THE TRIBUNAL ORDER RENDERED IN THE CASE OF RAMESH KUMAR SHAH VS. ACIT IN ITA NO.595/BANG/2018 DATED 05.12.2018. SHE SUBMITTED A COPY OF THIS TRIBUNAL ORDER AND POINTED OUT THAT IN PARA NO.3.5 OF THIS TRIBUNAL ORDER, THE TRIBUNAL HAS FOLLOWED OTHER TWO TRIBUNAL ORDERS RENDERED IN THE CASE OF ARVIND KUMAR MOOCHAND IN ITA NO.509/BANG/2017 AND PUKHRAJ HASMUKHLAL IN ITA NO.1927/BANG/2017 AND THE MATTER WAS REMANDED ITA NO. 1742/BANG/2019 PAGE 3 OF 5 TO THE FILE OF THE AO TO READJUDICATE AFTER PROVIDING COPY OF ALL DOCUMENTS, INCLUDING STATEMENTS, INVESTIGATION REPORTS, ETC., RELIED UPON BY REVENUE FOR MAKING ADDITIONS / DISALLOWANCES AND PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE FOR CROSS- EXAMINATION OF PERSONS WHOSE STATEMENTS ARE RELIED UPON. SHE SUBMITTED THAT IN THE PRESENT CASE ALSO, THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE AO WITH SIMILAR DIRECTIONS AS WERE GIVEN BY THE TRIBUNAL IN THAT CASE. 4. AS AGAINST THIS, IT WAS SUBMITTED BY LEARNED DR FOR REVENUE THAT BEFORE THE AO, NO REQUEST WAS MADE FOR DOCUMENTS OR FOR CROSS-EXAMINATION AND THEREFORE, THE ORDER OF THE CIT(A) SHOULD BE CONFIRMED. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL, I REPRODUCE PARA 4 FROM THE ORDER OF THE LEARNED CIT(A). THIS PARA READS AS UNDER:- 4. THE ASSESSEE HAS FILED HER RETURN FOR THE AN 2011-12, DECLARING A TOTAL INCOME OF RS. 2,12,400/-. THE ASSESSING' OFFICER REOPENED THE ASSESSMENT AND PASSED ORDER U/S. 144 R.W.S 147 OF THE INCOME-TAX ACT, 1961, DETERMINING THE TOTAL INCOME OF RS. 14,30,9754. THE AO HAS REOPENED THE ASSESSMENT ON THE BASIS OF INFORMATION RECEIVED BY HIM FROM THE INVESTIGATION WING, KOLKATA THAT LARGE SCALE MANIPULATION HAS BEEN DONE IN THE MARKET PRICE OF SHARE OF M/S TWENTY; FIRST CENTURY (INDIA) LTD BY A GROUP OF PEOPLE/SYNDICATE TO PROVIDE ACCOMMODATION ENTRIES 1 OR LICG/PROFIT. AS PER INFORMATION AVAILABLE, THE ASSESSEE HAD TRADED IN THE SHARES OF TWENTY FIRST CENTURY (INDIA) LTD TO THE TUNE OF ITS 12,18,575/- DURING FY 2010-11. ON VERIFICATION OF RECORDS AND RETURN OF THE ASSESSEE THE AU FOUND THAT TAXABLE INCOME OF THE ASSESSES HAS ESCAPED ASSESSMENT FOR THE YEAR. CONSEQUENTLY, THE CASE WAS REOPENED BY THE AO AFTER RECORDING THE REASON. 6. I ALSO REPRODUCE PARA NO.3.5 OF THE TRIBUNAL ORDER RENDERED IN THE CASE OF SHRI. RAMESH KUMAR SHAH (SUPRA) ON WHICH RELIANCE HAS BEEN PLACED BY LEARNED AR OF THE ASSESSEE. THIS PARA READS AS UNDER:- 3.5 WE HAVE HEARD BOTH PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUDING THE JUDICIAL DECISIONS CITED AND THE ORDERS OF THE ITA NO. 1742/BANG/2019 PAGE 4 OF 5 AUTHORITIES BELOW. TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANCES OF THE CASE THAT THE ASSESSEE SPECIFICALLY REQUESTED FOR CROSS-EXAMINATION OF THE DEPONENTS WHOSE STATEMENTS WERE THE BASIS OF ADDITION BY THE AO AND ALSO THE REPORT OF THE INVESTIGATION DIRECTORATE, KOLKATA FOR REBUTTAL; FROM THE JUDICIAL DECISIONS CITED, WE FIND THAT THE ISSUE FOR CONSIDERATION IS SQUARELY COVERED BY THE ORDERS OF THE BENGALURU ITAT IN THE CASES OF ARVIND KUMAR MOOLCHAND (SUPRA) AND PUKHRAJ HASMUKHLAL (SUPRA). FOLLOWING THE AFORESAID ORDERS (SUPRA), WE SET ASIDE THE ORDERS OF THE AO AND RESTORE THE MATTER OF TREATMENT OF PROFIT DECLARED ON SALE OF SHARES, CLAIMED AS EXEMPT U/S 10(38) OF THE ACT, TO THE FILE OF THE AO TO RE-ADJUDICATE THE ISSUE AFRESH; AFTER MAKING AVAILABLE TO THE ASSESSEE FOR REBUTTAL ALL DOCUMENTS; INCLUDING STATEMENTS, INVESTIGATION REPORTS, ETC., 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. CONSEQUENTLY, GROUND NO. 2 IS DISPOSED OF AS ABOVE. 7. FROM THE RELEVANT ORDER OF THE CIT(A) AS REPRODUCED ABOVE, IT IS SEEN THAT THE ASSESSEE MADE A SPECIFIC REQUEST BEFORE IT(A) THAT THE ASSESSMENT ORDER IS BAD IN LAW FOR NOT FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE AND IN THIS REGARD, A SPECIFIC SUBMISSION WAS MADE BEFORE CIT(A) THAT INFORMATION RECEIVED FROM DIT (INVESTIGATION), KOLKATA WAS NOT FURNISHED AND RIGHT OF CROSS-EXAMINATION OF THE PERSONS WHO HAVE CONFIRMED THAT THE TRANSACTION IS ACCOMMODATION IS NOT GIVEN TO THE ASSESSEE. IN SPITE OF THESE SPECIFIC REQUESTS, THERE IS NO FINDING GIVEN BY LEARNED CIT(A) ON THESE ASPECTS. AS PER PARA NO.3.5 OF THE TRIBUNAL ORDER RENDERED IN THE CASE OF SHRI. RAMESH KUMAR SHAH (SUPRA), UNDER SIMILAR FACTS, THE MATTER WAS RESTORED BACK TO THE FILE OF THE AO FOR FRESH DECISION WITH A DIRECTION THAT ALL DOCUMENTS INCLUDING STATEMENTS, INVESTIGATION REPORTS, ETC., RELIED UPON BY THE REVENUE FOR MAKING ADDITIONS / DISALLOWANCES SHOULD BE PROVIDED TO THE ASSESSEE FOR REBUTTAL AND ADEQUATE OPPORTUNITY TO THE ASSESSEE FOR CROSS-EXAMINATION OF PERSONS WHOSE STATEMENTS ARE BEING RELIED UPON SHOULD ALSO BE PROVIDED. RESPECTFULLY FOLLOWING THIS ITA NO. 1742/BANG/2019 PAGE 5 OF 5 TRIBUNAL ORDER, IN THE PRESENT CASE ALSO, I RESTORE THE ENTIRE MATTER BACK TO THE FILE OF THE AO WITH SIMILAR DIRECTION. 8. IN VIEW OF THE ABOVE DECISION, NO ADJUDICATION ON MERIT IS CALLED FOR AT THE PRESENT STAGE. 9. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- BANGALORE. DATED: 20 TH DECEMBER, 2019. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE. (N. V. VASUDEVAN) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER