VIREN PANACHAND VORA, MUMBAI V. INCOME TAX OFFICER 16(2)(1), MUMBAI

ITA 2006/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8256 (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: 2007-2008
• Appeal Filed On: 02-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHAITNYA ANJARIA LD
• Assessee Lawyers: JITENDRA JAIN LD
• Keywords: Principle of natural justice; Opportunity of cross examination; Accommodation entries; Set aside
• Section: 148

Judgement Text

1 ITA NOS. 2006/MUM/18, 2007/MUM/18 & 2008/MUM/18 A.YS 2007-08, 08-09 & 09-10 VIREN PANACHAND VORA IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO. 2006/MUM/2018 ASSESSMENT YEAR: 2007-08 ITA NO. 2007/MUM/2018 ASSESSMENT YEAR: 2009-10 ITA NO. 2008/MUM/2018 ASSESSMENT YEAR: 2008-09 SHRI VIREN PANACHAND VORA 302, 3 RD FLOOR, ANAND BUILDING, TIRUPATI MAHALAXMI HSG. SOCIETY, BHULABHAI DESAID ROAD, MUMBAI- 400 026. PAN: ABWPV7797E VS. I.T.O., 19(3)(5) MATRU MANDIR, ROOM NO. 201, TARADEO ROAD, MUMBAI-400 07. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI JITENDRA JAIN, 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 ALL THE APPEALS OF THE ASSESSEE ARE DIRECTED AGAINST T HE ORDERS PASSED BY LD CIT(A)-53, MUMBAI AND THEY RELATE TO THE ASSESSMENT YEARS 2007-08 TO 2009-10. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ASSESSMENT OF BOTH PURCHASE AND S ALE OF SHARES AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES REJEC TING CLAIM OF CAPITAL GAINS IN ALL THE THREE YEARS. 2 ITA NOS. 2006/MUM/18, 2007/MUM/18 & 2008/MUM/18 A.YS 2007-08, 08-09 & 09-10 VIREN PANACHAND VORA 2. THE LD A.R SUBMITTED THAT THE ASSESSEE HAS PURCH ASED AND SOLD SHARES THROUGH THE COMPANIES BELONGING TO SHRI MUKESH CHOKSI. THE ASSESSEE DECLARED CAPITAL GAINS ON SALE OF SHARES IN ALL THE THREE YEARS. THE AO RECEIVED INFORMATION THAT THE MUKESH CHOKSI AND H IS GROUP OF COMPANIES WERE PROVIDING ONLY ACCOMMODATION ENTRIES WITHO UT ACTUAL PURCHASE AND SALE OF SHARES. THIS FACT APPEARS TO HAVE BEEN SO STATED BY SHRI MUKESH CHOKSI IN THE STATEMENT TAKEN FROM HIM DURING THE COURSE OF SEARCH CONDUCTED IN HIS HANDS. ACCORDINGLY, THE AO RE OPENED THE ASSESSMENTS OF THE YEARS UNDER CONSIDERATION BY ISSUING NOTICES U/S 148 OF THE ACT. THE ASSESSING OFFICER COMPLETED THE ASSESSMEN TS BY ASSESSING BOTH PURCHASE AND SALE VALUE OF SHARES AS INCOME FROM U NDISCLOSED SOURCES IN ALL THE THREE YEARS. 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 SUBMITTED THAT THE PURCHASE AND SALE OF SHARES MADE BY THE ASSE SSEE IS DULY SUPPORTED BY PROPER EVIDENCES. FURTHER THE PAYMENTS HAVE BEEN MADE/RECEIVED THROUGH BANKING CHANNELS. ACCORDINGLY HE SUBMITTED THAT THE AO WAS NOT JUSTIFIED IN REJECTING THOSE EVIDENCE S. HE SUBMITTED THAT THE AO HAS MADE THE ADDITION BY PLACING RELIANCE ON THE STATEMENT SO GIVEN BY SHRI MUKESH CHOKSI, WHEN THE EVIDENCES AVAILA BLE WITH THE ASSESSEE IS CONTRARY TO THE STATEMENT SO MADE. ACCORDIN GLY HE SUBMITTED THAT THE ASSESSEE MAY BE PROVIDED WITH AN OPPORTUNITY TO CROSS EXAMINE SHRI MUKESH CHOKSI OR ANY OTHER PERSON WHO HAVE DEPOS ED THAT THESE TRANSACTIONS WERE MERE ACCOMMODATION ENTRIES. HE FURTH ER SUBMITTED THAT THE AO WAS NOT CORRECT IN LAW IN ASSESSING BOTH PUR CHASES AND SALES AS INCOME OF THE ASSESSEE, SINCE THEY HAVE BEEN ROUTED THROUGH BANKING CHANNELS. AT THE MOST, ONLY NET INCOME COULD HAVE BEEN ASSESSED. 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 INTEREST OF NATURAL JUSTICE, SHOULD HAVE PROVIDED OPPORTUNITY TO CROSS EXAM INE 3 ITA NOS. 2006/MUM/18, 2007/MUM/18 & 2008/MUM/18 A.YS 2007-08, 08-09 & 09-10 VIREN PANACHAND VORA SHRI MUKESH CHOKSI OR ANY OTHER PERSON WHO HAS DEPOSE D THAT THE TRANSACTIONS CARRIED OUT BY THEIR GROUP WAS MERE ACCOMMODATIO N ENTRIES, SINCE IT IS NOT CLEAR AS TO WHETHER THE TRANSACTIONS OF T HE ASSESSEE ARE ALSO COVERED BY THE STATEMENT SO MADE. FURTHER, THERE IS MERIT IN THE C CONTENTIONS OF THE ASSESSEE THAT BOTH PURCHASE AND SA LE VALUES SHOULD NOT HAVE BEEN ASSESSED. THE ADDITION, IF ANY, SHOULD HAVE BEEN RESTRICTED TO THE GAINS RECEIVED BY THE ASSESSEE. ACC ORDINGLY, I SET ASIDE THE ORDER PASSED BY LD CIT(A) IN ALL THE THREE YEARS UND ER CONSIDERATION AND RESTORE ALL THE ISSUES TO THE FILE OF THE AO FOR EXAMININ G THEM AFRESH AFTER PROVIDING OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE. 5. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE TREATED 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 4 ITA NOS. 2006/MUM/18, 2007/MUM/18 & 2008/MUM/18 A.YS 2007-08, 08-09 & 09-10 VIREN PANACHAND VORA DATE INITIAL WHETHER DICTATION PAD ENCLOSED WITH THE FILE : /NO. 1. DRAFT DICTATED ON/PENDRIVE 18.07.2019 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 18.07.2019 MATTER TYPED P.P SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 18.07.2019 P.P JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 18/7 PP SR.PS 6. DATE OF PRONOUNCEMENT 17/7 PP 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