Rekha V Shah , Bangalore V. The Income Tax Officer Ward-2(3)(3), Bangalore

ITA 330/BANG/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4492 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 22-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S T SESHADRI
• Keywords: Set aside
• Section: 143(3); 143(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - C BENCH : BANGALORE BEFORE SHRI JASON P BOAZ , ACCOUNTANT MEMBER ITA NO S . 3 29 AND 330 /BANG/201 9 ASSESSMENT YEAR S : 20 07 - 08 AND 2008 - 09 SMT. REKHA V. SHAH, NO.D-52, LAKSHMAN BUILDING, CHICKPET, BANGALORE-560 053. PAN : AFKPS 0727 B VS. THE INCOME TAX OFFICER, WARD 2(3)(3), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SMT. SUMAN LUNKAR, CA REVENUE BY : SHRI. S. T. SESHADRI, JCIT DATE OF HEARING : 15 . 0 4 .201 9 DATE OF PRONOUNCEMENT : 24 . 0 5 .201 9 O R D E R PER SHRI JASON P BOAZ, A.M. : THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-2, BANGALORE, DATED 31.12.2018 FOR ASSESSMENT YEAR 2007-08 AND 21.12.2018 FOR ASSESSMENT YEAR 2008-09. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS UNDER: 2.1 THE ASSESSEE FILED HER RETURNS OF INCOME FOR ASSESSMENT YEAR 2007-08 ON 30.03.2008 DECLARING INCOME OF RS.1,95,750/- AND FOR ASSESSMENT YEAR 2008-09 ON ITA NOS.329 AND 330/BANG/2019 PAGE 2 OF 7 31.03.2009 DECLARING INCOME OF RS.6,36,160-. BOTH THESE RETURNS WERE PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). SUBSEQUENTLY, BASED ON INFORMATION RECEIVED CONSEQUENT TO SEARCH IN THE MAHASAGAR GROUP AND ITS DIRECTOR, SHRI MUKESH CHOKSI ON 25.11.2009, WHEREIN THE ASSESSEE WAS SAID TO HAVE BEEN A BENEFICIARY OF THEIR FRAUDULENT / BOGUS SHARE DEALINGS, THE ASSESSMENTS IN ASSESSEES CASE FOR THESE TWO ASSESSMENT YEARS WERE RE-OPENED BY PROCEEDINGS INITIATED BY THE ASSESSING OFFICER (AO) UNDER SECTION 147 OF THE ACT. THE RE-ASSESSMENTS WERE CONCLUDED VIDE ORDERS PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT DATED 18.03.2015 FOR ASSESSMENT YEAR 2007-08 AND 26.03.2016 FOR ASSESSMENT YEAR 2008-09; WHEREIN CONSIDERATION FOR THE PURCHASE OF SHARES AMOUNTING TO RS.11,70,321/- AND CONSIDERATION FOR SALE OF SHARES AMOUNTING TO RS.16,92,752/- RESPECTIVELY WAS BROUGHT TO TAX AS UNEXPLAINED INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. THE ASSESSEES APPEALS WERE DISMISSED BY CIT(A)-2, BANGALORE. 3. AGGRIEVED BY THE ORDERS OF CIT(A)-2, BANGALORE, DATED 31.12.2018 FOR ASSESSMENT YEAR 2007-08 AND DATED 21.12.2018 FOR ASSESSMENT YEAR 2008-09, THE ASSESSEE HAS PREFERRED THESE APPEALS BEFORE THE TRIBUNAL WHEREIN SHE HAS RAISED THE FOLLOWING GROUNDS: ASSESSMENT YEAR 2007-08 ITA NOS.329 AND 330/BANG/2019 PAGE 3 OF 7 ITA NOS.329 AND 330/BANG/2019 PAGE 4 OF 7 ASSESSMENT YEAR 2008-09 ITA NOS.329 AND 330/BANG/2019 PAGE 5 OF 7 4. GROUND NO.3.1 4.1 IT WAS SUBMITTED BY THE LEARNED AR OF THE ASSESSEE THAT IN GROUND NO.3.1 (SUPRA), THE ASSESSEE HAS DISPUTED THE VALIDITY OF REASSESSMENT ORDER PASSED BY THE AO WHICH WAS UPHELD BY THE LEARNED CIT(A). IN THIS REGARD, IT WAS POINTED OUT THAT THE MAIN BASIS FOR RE-OPENING THE ASSESSMENTS FOR ASSESSMENT YEARS 2007-08 AND 2008-09 ON ACCOUNT OF THE SEARCH IN THE CASE OF MAHASAGAR GROUP ON 25.11.2009, WHEREIN, AS PER THE STATEMENT OF MR. MUKESH CHOKSHI, DIRECTOR OF M/S. MAHASAGAR SECURITIES LTD., IN WHICH IT IS ALLEGED THAT HE HAS STATED THAT HIS BUSINESS ACTIVITIES IS TO PROVIDE ACCOMMODATIVE ENTRIES FOR LONG TERM AND SHORT TERM CAPITAL GAINS, PURCHASE AND SALES OF SHARES ETC., AND HE HAS ALSO PROVIDED LIST OF BENEFICIARIES WHICH INCLUDE THE NAME OF THE ASSESSEE ALSO. IT WAS SUBMITTED THAT NEITHER THE COPY OF THE STATEMENT OF MR. MUKESH CHOKSHI NOR THE LIST OF BENEFICIARIES HAVE BEEN MADE AVAILABLE TO THE ASSESSEE NOR HAS SHE BEEN ALLOWED CROSS-EXAMINATION OF THE PERSONS ON THE BASIS OF WHOSE STATEMENTS, THE AO HAS DRAWN ADVERSE INFERENCE IN THE ASSESSEES CASE. THE LEARNED AR SUBMITTED THAT UNDER THESE FACTS, JUDGMENTS OF HONBLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF CHANDRA DEVI KOTHARI IN WRIT ITA NOS.329 AND 330/BANG/2019 PAGE 6 OF 7 PETITION NO.39370/2014 DATED 2ND OF FEB, 2015 (COPY OF WHICH HAS BEEN PLACED ON RECORD), IS SQUARELY APPLICABLE. SHE HAS PARTICULARLY DRAWN MY ATTENTION TO PARA NO.8 OF THIS JUDGMENT OF HONBLE KARNATAKA HIGH COURT, AS PER WHICH, IT WAS HELD THAT SINCE THE PETITIONER HAS BEEN DENIED AN OPPORTUNITY OF FAIR HEARING BY PROVIDING COPY OF THE STATEMENT AND RELATED DETAILS, THE MATTER IS REQUIRED TO BE RECONSIDERED BY THE AO BY PROVIDING FAIR AND REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AFTER FURNISHING DETAILS / COPY OF THE STATEMENT BASED ON WHICH THE IMPUGNED ASSESSMENT ORDER HAS BEEN PASSED. THE LEARNED AR SUBMITTED THAT IN THE LIGHT OF THE FACTS OF THE PRESENT CASE AND AS PER THIS JUDGMENT OF HONBLE KARNATAKA HIGH COURT, IN THE CASE ON HAND ALSO, THE ENTIRE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE AO FOR FRESH DECISION WITH SAME DIRECTIONS. 4.2 PER CONTRA, THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4.3.1 I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FIRST OF ALL, I REPRODUCE PARA NO.8 OF THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF M/S. CHANDRA DEVI KOTHARI (SUPRA) AND THIS IS AS UNDER: 8. IN THE LIGHT OF THE FACTS AND CIRCUMSTANCE SA S ADVERTED TO ABOVE AND AS THE PETITIONER HAS BEEN DENIED AN OPPORTUNITY OF FAIR HEARING BY PROVIDING COPY OF THE STATEMENT AND RELATED DETAILS REGARDING THE ALLEGED SHARE AMOUNT, I AM OF THE VIEW THAT THE MATTER REQUIRES TO BE RE-CONSIDERED BY THE RESPONDENT BY PROVIDING FAIR AND REASONABLE OPPORTUNITY OF HEARING TO THE PETITIONER AND BY FURNISHING THE DETAILS / COPY OF THE STATEMENT BASED ON WHICH THE IMPUGNED ASSESSMENT ORDER HAS BEEN PASSED. 4.3.2 FROM THE ABOVE PARA FROM THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT, IT IS SEEN THAT MATTER WAS RESTORED BACK TO THE FILE OF THE AO FOR FRESH DECISION AFTER PROVIDING COPY OF THE STATEMENT OF SHRI MUKESH CHOKSI AND OTHER RELATED DETAILS. AS PER THE FACTS NOTED BY THE HIGH COURT IN THE EARLIER PARAS OF JUDGMENT ITA NOS.329 AND 330/BANG/2019 PAGE 7 OF 7 (SUPRA) AND AS PER THE FACTS OF THE CASE ON HAND, THERE APPEARS TO BE NO DIFFERENCE IN FACTS AND THEREFORE BY RESPECTFULLY FOLLOWING THIS JUDGMENT IN THE CASE OF CHANDRA DEVI KOTHARI (SUPRA), I SET ASIDE THE IMPUGNED ORDERS OF LEARNED CIT(A) FOR ASSESSMENT YEARS 2007-08 AND 2008-09 AND RESTORE THE MATTERS TO THE FILE OF THE AO FOR FRESH DECISION WITH THE SAME DIRECTIONS AS WERE ISSUED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE AS PER PARA NO.8 OF THE JUDGMENT REPRODUCED ABOVE. IN VIEW OF THIS DECISION, NO ADJUDICATION IS CALLED FOR AT THIS STAGE REGARDING THE MERITS OF THE ADDITION. 5. IN THE RESULT, THE ASSESSEES APPEAL FOR ASSESSMENT YEARS 2007-08 AND 2008-09 ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF MAY, 2019. SD/- SD/ - SD/ - (N. V. VASUDEVAN) VICE PRESIDENT (JASON P BOAZ) ACCOUNTANT MEMBER BANGALORE. DATED: 24 TH MAY, 2019. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.