KAILASH PRASAD CHOKHANI HUF, MUMBAI V. ITO WD 14(2)(1), MUMBAI

ITA 1990/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92886 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2015
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 24-03-2014
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR BORA
• Assessee Lawyers: RAHUL K HAKANI
• Keywords: Opportunity of being heard; Additional evidence; Accommodation entries
• Section: 143(3); 142(1); 131; 68

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ./I.T.A. NO. 1990/M/2014 ( AY: 200 4 - 200 5 ) KAILASH PRASAD CHOKHANI - HUF, 103 - A, RIZVI PARK, S.V. ROAD, SANTACRUZ (W), MUMBAI - 54. / VS. ITO, WARD 14 (2)(1), 3 RD FLOOR, EARNEST HOUSE, N POINT, MUMBAI. ./ PAN : AABHC 4162J ( / APPELLANT) .. ( / RESPONDENT ) ./I.T.A. NO. 1991/M/2014 ( AY: 2004 - 2005 ) RACHANA S. CHOKHANI, 101 - A, RIZVI PARK, S.V. ROAD, SANTACRUZ (W), MUMBAI - 54. / VS. ITO, WARD 14 (2)(1), 3 RD FLOOR, EARNEST HOUSE, N POINT, MUMBAI. ./ PAN : AADPC5895J ( / APPELLANT) .. ( / RESPONDENT ) ./I.T.A. NO. 1992/M/2014 ( AY: 2004 - 2005 ) SHAKUNTALA CHOKHANI, 10 3 - A, RIZVI PARK, S.V. ROAD, SANTACRUZ (W), MUMBAI - 54. / VS. ITO, WARD 14 (2)(1), 3 RD FLOOR, EARNEST HOUSE, N POINT, MUMBAI. ./ PAN : ACZPC9745P ( / APPELLANT) .. ( / RESPONDENT ) / ASSESSEE BY : MR. RAHUL K HAKANI / REVENUE BY : SHRI VIJAY KUMAR BORA / DATE OF HEARING : 15.6 .2015 / DATE OF PRONOUNCEMENT : 15.6 .2015 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE THREE APPEALS UNDER CONSIDERATION AGAINST THREE DIFFERENT ORDER OF THE CIT (A) - 25, MUMBAI, COMMONLY DATED 31.1.2013 FOR THE AY 2004 - 2005. SINCE, THE ISSUES INVOLVED IN ALL THESE APPEALS ARE IDENTICAL, THEREFORE, FOR THE SAK E OF 2 CONVENIENCE, THEY ARE CLUBBED, HEARD COMBINEDLY AND DISPOSED - OFF IN THIS CONSOLIDATED ORDER. APPEAL WISE ADJUDICATION IS GIVEN IN THE FOLLOWING PARAS OF THIS ORDER. 2. SINCE, THE GROUND RAISED IN ALL THE THREE APPEALS ARE IDENTICAL, FOR THE SAKE OF R EFERENCE, THE GROUNDS RAISED BY THE ASSESSEE IN THE CASE OF KAILASH PRASAD CHOKHANI ARE EXTRACTED AS FOLLOWS: 1. THE LD CIT (A) OUGHT NOT HAVE HELD THAT AS THE APPELLANT DID NOT AVAIL THE OPPORTUNITY OF BEING HEARD AND THEREFORE, IT IS LEGITIMATE TO INFER THAT THE APPELLANT IS NOT INTERESTED MEANINGFUL PROSECUTION OF APPEAL AND THEREFORE, THE APPEAL IS REQUIRED TO BE ADJUDICATED DRAWING ADVERSE INFERENCE AND ACCORDINGLY, HOLDING THA THE APPEAL FILED BY THE APPELLANT IS LIABLE TO BE DISMISSED AND LIABLE TO BE REJECTED ON MERIT ALSO WITHOUT CONSIDERING THE FOLLOWING APPLICABLE FACTS WHICH HAS RELEVANCE TO THE VALIDITY OF THE INVOCATION OF SECTION 68 OF THE IT ACT, 1961 IN RELATION TO LONG TERM CAPITAL GAINS REALIZED ON SALE OF SHARES IN THE ORDER OF ASSESSMEN T DATED 28 TH DECEMBER, 2008 PASSED U/S 143(3) R.W.S 147 OF THE ACT. (A) NON - FURNISHING TO THE APPELLANT A COPY OF THE DOCUMENTS RELIED UPON BY THE AO; (B) NON - AFFORDING OF THE OPPORTUNITY TO THE APPELLANT BY THE AO TO CROSS EXAMINE MR. CHOKSI WHO IS ALLEGED TO HAV E ADMITTED IN THE STATEMENT RECORDED U/S 131 OF THE ACT TO THE SEARCH PROCEEDINGS ON 25 TH NOVEMBER, 2009 OF HAVING ISSUED CHEQUES / DDS FOR ACCOMMODATION ENTRIES. 2. THE LD CIT (A) IN ANY VIEW OF THE MATTER, OUGHT TO HAVE GIVEN WEIGHT AGE TO THE FACTS AND APPLICABLE AND BROUGHT ON RECORD IN THE ASSESSMENT ORDER, MORE PARTICULARLY REFERRED TO IN GROUND NO.1 AND ACCORDINGLY, OUGHT TO HAVE HELD THAT INVOCATION OF SECTION 68 OF THE ACT TO THE LONG TERM CAPITAL GAINS REALIZED ON SALE OF SHARES IS IMPROPER IN LAW AND GAINS REALIZED ON SALE OF SHARES HAVE TO BE ASSESSED UNDER THE HEAD LONG TERM CAPITAL GAINS. 3. WITHOUT PREJUDICE TO THE ABOVE AND IN THE ALTERNATE, IN ANY VIEW OF THE MATTER, THE ORDER PASSED BY THE AO DATED 28/12/2011 U/S 143(3) R.W.S 147 OF THE A CT HAS TO BE CONSIDERED AS BAD IN LAW, IN ABSENCE OF ISSUANCE OF NOTICE U/S 143(2) OF THE ACT. 3. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE BROUGHT MY ATTENTION TO THE FACT THAT THE GROUNDS RA ISED IN THE APPEAL S UNDER CONSIDERATION ARE REQUIRED TO BE REM ANDED TO THE FILE OF THE AO FO R EXAMINING THE FACT RELATING TO THE GROUND NO.3, WHICH IS COMMON IN ALL THE THREE APPEALS. THE SAID GROUND NO.3 RELATES TO THE VALIDITY OF THE ASSESSMENT U/S 147 R.W.S 143(3) OF THE ACT MADE WITHOUT ISSUING A MANDATORY NOTIC E U/S 143(2) OF THE ACT. IN THIS REGARD, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE ASSESSMENT ORDER, WHERE THERE IS NO REFERENCE TO THE ISSUE OF NOTICE U/S 142(2), AND IT ONLY REFERS TO SECTION 142(1) AND 147 / 1 48 OF THE ACT. FURTHER, HE SUBMITTED THAT NOBODY REPRESENTED TO THE ASESSEE BEFORE THE CIT (A), THEREFORE, THE ORDER OF THE CIT (A) WAS PASSED EXPARTE. FURTHER, ASSESSEE ALSO SUBMITTED THAT HE WANTS TO FILE ADDITIONAL EVIDENCES RELATING TO CONFIRMATIONS LETTERS BEFORE THE LOWER AU THORITIES DURING THE REMANDING PROCEEDINGS, IF ORDERED BY THE TRIBUNAL. 3 4. ON THE OTHER HAND, LD DR FOR THE REVENUE SUBMITTED THAT THERE IS A NEED FOR EXAMINING THE RELEVANT FILED ON THE ISSUE RAISED IN GROUND NO.3 IN ALL THE THREE APPEALS BY THE THREE ASS ESSES. 5. ON HEARING BOTH THE PARTIES AND AFTER CONSIDERING THE ARGUMENT OF THE LD COUNSEL FOR THE ASSESSEE, I AM OF THE OPINION THAT THE ISSUES RAISED IN ALL THE THREE APPALS ARE REQUIRED TO BE REMANDED TO THE FILE OF THE AO FOR FRESH ADJUDICATION AS ARGU ED BY THE ASSESSEE IN THE REMANDING PROCEEDINGS, THE AO SHALL EXAMINE ALL THE ARGUMENTS RAISED BEFORE THE TRIBUNAL AND SHALL PASS A SPEAKING ORDER IN ACCORDANCE WITH THE LAW BOTH ON THE LEGAL ISSUE OF VALIDITY OF REASSESSMENT MADE WITHOUT STATUTORY NOTICE U/S 143(2) OF THE ACT AS WELL AS ON MERITS. AO SHALL ALSO GRANT A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . ACCORDINGLY, ALL THE GROUNDS RAISED IN ALL THE THREE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, ALL THE THREE A PPEALS OF THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15.6.2015 IMMEDIATELY AFTER COMPLETION OF HEARING. SD/ - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER MUMBAI ; 15.6 .201 5 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT - 4. / 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI