DR.BHAWANISHANKAR AGARWAL, MUMBAI V. INCOME TAX OFFICER-11(2)(2), MUMBAI

ITA 2363/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8131 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 17-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHAITNYA ANJARIA LD
• Assessee Lawyers: SATISH MODY LD
• Keywords: Principle of natural justice; Opportunity of cross examination; Accommodation entries; Set aside
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO. 2363/MUM/2018 ASSESSMENT YEAR: 2007-08 DR. BHAWANISHANKAR AGARWAL CO-OP. HOUSING SOCIETY, PODDAR PARK, MALAD (E), MUMBAI-400 097. PAN: AAAPA8268J VS. I.T.O., 11 (2)( 2 ) , MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SATISH MODY, LD.AR RESPONDENT BY : SHRI CHAITNYA ANJARIA, LD.DR DATE OF HEARING : 1 8 .07.2019 DATE OF PRONOUNCEMENT : 1 8 - 07 - 2019 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 29.12.2017 PASSED BY LD CIT(A)-5, MUMBAI AND IT REL ATES TO THE ASSESSMENT YEAR 2007-08. THE ASSESSEE IS AGGRIEVED BY THE DEC ISION OF LD CIT(A) IN CONFIRMING THE ASSESSMENT OF CAPITAL GAIN ARISING O N SALE OF SHARES AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES AND FURTHER CONFIRMING THE ADDITION OF EXPENSES. 2. THE LD A.R SUBMITTED THAT THE ASSESSEE HAS PU RCHASED AND SOLD SHARES THROUGH THE COMPANIES BELONGING TO SHRI MUKESH CHOKSI. THE ASSESSEE DECLARED LONG TERM CAPITAL GAIN OF RS.2,07,860/- ON SALE OF SHARES OF TALENT INFOWAYS LTD AND CLAIMED THE SAME AS EXEMPT. THE AO RECEIVED INFORMATION THAT THE MUKESH CHOKSI AND HIS GROUP OF COMPANIES W ERE PROVIDING ONLY [2] ITA NO.2363/MUM/2018 DR. BHAWANISHANKAR AGARWAL ACCOMMODATION ENTRIES WITHOUT ACTUAL PURCHASE AND S ALE 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 CONDUCTE D IN HIS HANDS. ACCORDINGLY, THE AO REOPENED THE ASSESSMENT OF THE YEAR UNDER CONSIDERATION BY ISSUING NOTICE U/S 148 OF THE ACT. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT BY ASSESSING THE SALE CONS IDERATION OF RS.3,07,730/- AS UNEXPLAINED INCOME. THE AO ALSO A SSESSED 5% OF SALE CONSIDERATION AS EXPENSES INCURRED IN PROCURING ACC OMMODATION ENTRIES. THE LD CIT(A) ALSO CONFIRMED THE SAME. 3. THE LD A.R SUBMITTED THAT THE ASSESSING OFFI CER HAS PLACED RELIANCE ON THE INFORMATION RECEIVED FROM THE INVESTIGATION WIN G. HE SUBMITTED THAT THE PURCHASE AND SALE OF SHARES MADE BY THE ASSESSEE IS DULY SUPPORTED BY PROPER EVIDENCES. FURTHER THE PAYMENTS HAVE BEEN M ADE/RECEIVED THROUGH BANKING CHANNELS. ACCORDINGLY HE SUBMITTED THAT TH E AO WAS NOT JUSTIFIED IN REJECTING THOSE EVIDENCES. HE SUBMITTED THAT TH E AO HAS MADE THE ADDITION BY PLACING RELIANCE ON THE STATEMENT SO GI VEN BY SHRI MUKESH CHOKSI, WHEN THE EVIDENCES AVAILABLE WITH THE ASSES SEE IS CONTRARY TO THE STATEMENT SO MADE. HE SUBMITTED THAT THE ASSESSEE HAD REQUESTED FOR COPIES OF EVIDENCES AND ALSO OPPORTUNITY TO CROSS E XAMINATION. HOWEVER, THEY WERE NOT PROVIDED TO THE ASSESSEE. ACCORDINGLY HE SUBMITTED THAT THE ASSESSEE MAY BE PROVIDED WITH AN OPPORTUNITY TO CRO SS EXAMINE SHRI MUKESH CHOKSI OR ANY OTHER PERSON WHO HAVE DEPOSED THAT THESE TRANSACTIONS WERE MERE ACCOMMODATION ENTRIES. 4. I HEARD LD D.R AND PERUSED THE RECORD. I FIN D MERIT 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 EXAMINE 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 [3] ITA NO.2363/MUM/2018 DR. BHAWANISHANKAR AGARWAL TO WHETHER THE TRANSACTIONS OF THE ASSESSEE ARE ALS O COVERED BY THE STATEMENT SO MADE. ACCORDINGLY, I SET ASIDE THE OR DER PASSED BY LD CIT(A) AND RESTORE ALL THE ISSUES TO THE FILE OF THE AO FO R EXAMINING THEM AFRESH AFTER PROVIDING OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 18-07-2019 SD/- ( B.R. BASKARAN) ACCOUNTANT MEMBER MUMBAI, DATED : 18 TH JULY,2019 *PP/SPS 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 NO.2363/MUM/2018 DR. BHAWANISHANKAR AGARWAL 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 19/7 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PP SR.PS 6. DATE OF PRONOUNCEMENT 18/7 SR.PS 7. FILE SENT TO THE BENCH CLERK 19/7 PP SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER