Kamlesh Kumar Munot , Bangalore V. The Income Tax Officer Ward-2(2)(1), Bangalore

ITA 360/BANG/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4500 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 27-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S T SESHADRI
• Keywords: Accommodation entries; Set aside
• Section: 143(3); 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - C BENCH : BANGALORE BEFORE SHRI JASON P BOAZ , ACCOUNTANT MEMBER ITA NO. 3 6 0 /BANG/201 9 ASSESSMENT YEAR : 20 14 - 15 SHRI. KAMLESH KUMAR MUNOT, NO.104, ARIHANT COMFORTS, 50/51, 1 ST MAIN, 32 ND CROSS, OKALIPURAM, BANGALORE-560 021. PAN : AIBPM 1488 P VS. THE INCOME TAX OFFICER, WARD 2(2)(1), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SMT. SUMAN LUNKAR, CA REVENUE BY : SHRI. S. T. SESHADRI, JCIT DATE OF HEARING : 1 6 . 0 4 .201 9 DATE OF PRONOUNCEMENT : 24 . 0 5 .201 9 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-2, BANGALORE, DATED 28.12.2018 FOR ASSESSMENT YEAR 2014-15. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS UNDER: 2.1 THE ASSESSEE FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2014-15 ON 25.06.2014 DECLARING INCOME OF RS.3,35,620/-. THE CASE WAS TAKEN UP FOR SCRUTINY AND THE ASSESSEMENT WAS CONCLUDED UNDER SECTION 143(3) OF THE INCOME TAX ACT, ITA NO. 360/BANG/2019 PAGE 2 OF 6 1961 (IN SHORT THE ACT) VIDE ORDER DATED 27.12.2016, WHEREIN THE ASSESSEES INCOME WAS DETERMINED AT RS.26,44,880/-. THIS WAS, IN VIEW OF THE ASSESSING OFFICER (AO) DISALLOWING THE EXEMPTION OF RS.23,08,853/- CLAIMED UNDER SECTION 10(38) OF THE ACT TOWARDS LTCG ON SALE OF SHARES OF M/S. NCL RESEARCH AND FINANCIAL SERVICES LTD., AND RISA INTERNATIONAL IN THE YEAR UNDER CONSIDERATION. THE ASSESSEES APPEAL WAS DISMISSED BY THE CIT(A)-2, BANGALORE VIDE ORDER DATED 28.12.2018. 3. AGGRIEVED BY THE ORDERS OF CIT(A)-2, BANGALORE, DATED 28.12.2018 FOR ASSESSMENT YEAR 2014-15, THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL WHEREIN HE HAS RAISED THE FOLLOWING GROUNDS: ASSESSMENT YEAR 2007-08 ITA NO. 360/BANG/2019 PAGE 3 OF 6 4. GROUND NO.2.1 4.1 IT WAS SUBMITTED BY THE LEARNED AR OF THE ASSESSEE THAT IN GROUND NO.2.1 (SUPRA), THE ASSESSEE HAS DISPUTED THE VALIDITY OF THE ASSESSMENT ORDER PASSED BY THE AO WHICH WAS UPHELD BY THE LEARNED CIT(A) BY RELYING ON STATEMENT OF MR. MUKESH CHOKSHI, DIRECTOR OF M/S. MAHASAGAR SECURITIES LTD., IN WHICH IT IS ALLEGED THAT HE ITA NO. 360/BANG/2019 PAGE 4 OF 6 HAS STATED THAT HIS BUSINESS ACTIVITIES IS TO PROVIDE ACCOMMODATION 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 IS SUBMITTED THAT THE ABOVE DETAILS ARE AVAILABLE AND RECORDED IN THE IMPUGNED ORDER OF CIT(A). 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 AUTHORITIES BELOW HAVE 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 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 CIRCUMSTANCES AS ADVERTED TO ABOVE AND AS THE PETITIONER HAS BEEN DENIED AN OPPORTUNITY OF FAIR HEARING BY PROVIDING COPY OF THE STATEMENT AND RELATED ITA NO. 360/BANG/2019 PAGE 5 OF 6 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 8 OF THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CHANDRA DEVI KOTHARI (SUPRA) 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 (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 ORDER OF LEARNED CIT(A) FOR ASSESSMENT YEAR 2014-15 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 YEAR 2014-15 IS 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/* ITA NO. 360/BANG/2019 PAGE 6 OF 6 COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.