HARESH M. MEHTA, MUMBAI V. INCOME TAX OFFICER 15(1)(1), MUMBAI

ITA 1984/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8253 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 02-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHAITNYA ANJARIA LD
• Assessee Lawyers: SURESH PATNI LD
• Keywords: Income from undisclosed sources; Principle of natural justice; Opportunity of cross examination; Accommodation entries; Set aside
• Section: 148; 144

Judgement Text

1 ITA NO. 1984/MUM/2018 HARESH M.MEHTA IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO. 1984/MUM/2018 ASSESSMENT YEAR: 2006-07 HARESH M. MEHTA, C/O M/S. M.P. JAIN & CO., 205, GODIJI CHAWL, KIKA STREET, MUMBAI-400 004. PAN: AFTPM5108D VS. I.T.O., 15(1)(1), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SURESH PATNI, LD.AR RESPONDENT BY : SHRI CHAITNYA ANJARIA, LD.DR DATE OF HEARING : 1 7 .07.2019 DATE OF PRONOUNCEMENT : 17 - 07 - 2019 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDE R DATED 21.12.2017 PASSED BY LD CIT(A)-54, MUMBAI AND IT RELATES T O THE ASSESSMENT YEAR 2006-07. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ASSESSMENT OF SALE VALUE OF SHARES A S INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. 2. THE LD A.R SUBMITTED THAT THE ASSESSEE HAS PURCH ASED AND SOLD SHARES OF TALENT INFOWAY LTD THROUGH THE COMPANIES BELONGING TO SHRI MUKESH CHOKSI. THE ASSESSEE DECLARED LONG TERM CAPITAL GAIN OF R S.8,30,407/- AND CLAIMED THE SAME AS EXEMPT. THE AO RECEIVED INFORMATION T HAT THE MUKESH CHOKSI AND HIS GROUP OF COMPANIES WERE PROVIDING ONLY ACC OMMODATION ENTRIES WITHOUT ACTUAL PURCHASE AND SALE OF SHARES. THIS FACT APPEARS TO HAVE BEEN SO STATED BY SHRI MUKESH CHOKSI IN THE STATEM ENT TAKEN FROM HIM DURING THE COURSE OF SEARCH CONDUCTED IN HIS HANDS. ACC ORDINGLY, THE AO 2 ITA NO. 1984/MUM/2018 HARESH M.MEHTA REOPENED THE ASSESSMENT OF THE YEAR UNDER CONSIDERATIO N BY ISSUING NOTICE U/S 148 OF THE ACT. SINCE THE ASSESSEE DID NOT CO-OPE RATE WITH THE AO, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT TO THE BEST O F HIS JUDGEMENT U/S 144 OF THE ACT BY ASSESSING THE SALE CONSIDERATION OF SHA RES SOLD BY THE ASSESSEE AS INCOME FROM UNDISCLOSED SOURCES. THE AO ALSO ADDED 0.15% OF SALE CONSIDERATION AS THE COMMISSION EXPENSES INCURRED BY THE ASSESSEE IN PROCURING ACCOMMODATION BILLS. THE LD CIT(A) ALSO CONFIRMED THE SAME. 3. THE LD A.R SUBMITTED THAT THE ASSESSING OFFICER HAS PLACED RELIANCE ON THE INFORMATION RECEIVED FROM THE INVESTIGATION WING. HE S UBMITTED THAT THE PURCHASE AND SALE OF SHARES MADE BY THE ASSESSEE IS DU LY SUPPORTED BY PROPER EVIDENCES. FURTHER THE PAYMENTS HAVE BEEN MAD E/RECEIVED THROUGH BANKING CHANNELS. ACCORDINGLY HE SUBMITTED THAT THE AO WAS NOT J USTIFIED IN REJECTING THOSE EVIDENCES. HE SUBMITTED THAT THE AO HA S MADE THE ADDITION BY PLACING RELIANCE ON THE STATEMENT SO GIVEN BY SHRI MUK ESH CHOKSI, WHEN THE EVIDENCES AVAILABLE WITH THE ASSESSEE IS CONTRARY TO THE STATEMENT SO MADE. ACCORDINGLY HE SUBMITTED THAT THE ASSESSEE MAY BE PROVIDED WITH AN OPPORTUNITY TO CROSS EXAMINE SHRI MUKESH CHOKSI OR ANY OTHER PERSON WHO HAVE DEPOSED THAT THESE TRANSACTIONS WERE MERE ACCOMMODATIO N ENTRIES. 4. I HEARD LD D.R AND PERUSED THE RECORD. I FIND MER IT IN THE CONTENTIONS OF THE ASSESSEE. I AM OF THE VIEW THAT THE AO, IN THE INT EREST OF NATURAL JUSTICE, SHOULD HAVE PROVIDED OPPORTUNITY TO CROSS EXAMIN E SHRI MUKESH CHOKSI OR ANY OTHER PERSON WHO HAS DEPOSED THAT THE TRANSACTIONS CARRIED OUT BY THEIR GROUP WAS MERE ACCOMMODATION ENTRIES, SINCE IT IS NOT CLEAR AS TO WHETHER THE TRANSACTIONS OF THE ASSESSEE ARE ALSO C OVERED BY THE STATEMENT SO MADE. ACCORDINGLY, I SET ASIDE THE ORDER PASSED BY LD CIT(A) AND RESTORE ALL THE ISSUES TO THE FILE OF THE AO FOR EXAMIN ING THEM AFRESH AFTER PROVIDING OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE. 3 ITA NO. 1984/MUM/2018 HARESH M.MEHTA 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 17-07-2019 SD/- ( B.R. BASKARAN) ACCOUNTANT MEMBER MUMBAI, DATED : 17 TH JULY,2019 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. THE CIT 5. THE DR, B BENCH, ITAT, MUMBAI BY ORDER (ASSISTANTREGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI DATE INITIAL WHETHER DICTATION PAD ENCLOSED WITH THE FILE : YES/NO. 1. DRAFT DICTATED ON 17.07.2019 NO, PENDRIVE ORDER PREPARED BY HON.AM SR.PS 2. DRAFT PLACED BEFORE AUTHOR 17.07.2019 MATTER COMPLETED/TYPED P.P SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 17.07.2019 P.P JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 18/07 PP SR.PS 6. DATE OF PRONOUNCEMENT 17/7 SR.PS 7. FILE SENT TO THE BENCH CLERK 18/7 PP SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER