Dinesh Kumar Singhi, Bangalore V. Deputy Commissioner Of Income Tax, Circle- 1(1)(2), Bangalore

ITA 379/BANG/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 1648 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 19-03-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMER SINGH MEENA
• Keywords: Unexplained expenditure; Principle of natural justice; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings; Set aside; Capital Gains
• Section: 147; 68; 148; 144; 69C; 143(3); 234B; 143(1); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA Nos. 378 & 379/Bang/2020 Assessment Year : 2012-13 & 2013-14 Shri Dinesh Kumar Singhi, 101, Pride Elite No. 10, Museum Road, Bangalore – 560 001. PAN: AEFPS2551F Vs. The Deputy Commissioner of Income Tax, Circle – 1(1)(2), Bangalore. APPELLANT RESPONDENT Assessee by : Shri K.R. Pradeep & Smt. G.P. Girija, Advocates Revenue by : Shri Sumer Singh Meena, CIT DR Date of Hearing : 01-08-2022 Date of Pronouncement : 29-08-2022 ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeals are filed by assessee against two separate orders both dated 21/01/2020 passed by Ld.CIT(A)-1, Bangalore for A.Ys. 2012-13 & 2013-14 on following grounds of appeal: Assessment Year 2012-13: “1. That the order of the authorities below in so far as it is against the assessee is opposed to law, facts, circumstances, natural justice, equity all other known principles of law. 2. That the total income and total tax computed is hereby disputed. Page 2 of 21 ITA Nos. 378 & 379/Bang/2020 3. The authorities below erred in not providing sufficient and adequate opportunity to the appellant as required under law, thereby violating the principles of natural justice, hence the order requires to be cancelled. 4. That the notice, initiation and all subsequent proceedings u/s 148 is bad in law, is without jurisdiction, barred by limitation and requires to be cancelled. 5. The notice u/s 148 and service thereof is bad in law and the reassessment requires to be cancelled. 6. The conditions precedent to justify the reopening of the assessment u/s 147 of the Act being absent, the reopening of the assessment is bad in law and the reassessment requires to be cancelled. 7. That the order u/s 147 r.w.s.143(3) of the Act is bad in law, as the appellant had disclosed the material facts fully and truly necessary for assessment and there is no new or fresh information or evidence warranting reopening of the assessment. 8. That the entire reassessment proceedings violates the procedure prescribed by the Supreme Court in 259 ITR 19 for 148 proceedings. 9. The reassessment proceedings is on a change of opinion on the same set of facts without there being any new evidence or information which is not permitted under law. 10. The reasons / findings of the authorities below are unsustainable and untenable in law as the same is contrary to the facts emerging from the record. 11. That the authorities below erred in relying on material/information without furnishing the same to the assessee before passing the assessment order. 12. That the authorities below erred in relying on uncorroborated statement of Shri Raj Kumar Kedia without providing the copy of the statement and without providing an opportunity of cross examination inspite of request by the assessee. 13. That the authorities below erred in relying on uncorroborated statement of persons namely Shri Dhruv Narayan Jha, Shri Jagdish Prasad Purohit, Shri Devesh Upadhyaya and Shri Anuj Agarwal without furnishing the Page 3 of 21 ITA Nos. 378 & 379/Bang/2020 same to the assessee before passing the assessment order. 14. That the authorities below erred in not providing complete details relied on before calling for objections from the assessee. 15. That the authorities below erred in relying on statements without providing opportunity to cross examine. 16. That the authorities below erred in relying on irrelevant material while ignoring the relevant material. 17. That the authorities below erred in making addition of Rs.19,10,02,443/- as unexplained cash credits u/s 68 of the Act. 18. That the authorities below erred in treating the capital gains declared by the assessee from transfer of shares of M/s. Blue Circle Services Ltd of Rs. 19,10,02,443/- u/s 68 of the IT Act. 19. That the authorities below erred in resorting to section 68 of the Act. 20. That the authorities below erred in refusing to apply the beneficial treatment provided under the Act of the Capital gains earned by the assessee from the transfer of shares in M/s. Blue Circle Services Ltd of Rs. 19,10,02,443/-. 21. That the authorities below erred in making addition of Rs.57,30,073/- as Unexplained Expenditure u/s 69C of the Act without adducing any evidence in support of the same. 22. That the authorities below erred in estimating 3% of sale consideration of shares as the commission paid u/s 69C of the Act merely on surmise. 23. The appellant denies the liabilities for interest u/s 234A, 234B and 234C of the Act. Further prays that the interest if any should be levied only on returned income. 24. No opportunity has been given before levy of interest u/s 234A, 234B and 234C of the Act. Page 4 of 21 ITA Nos. 378 & 379/Bang/2020 25. Without prejudice to the appellant's right of seeking waiver before appropriate authority, the appellant begs for consequential relief in the levy of interest u/s 234A, 234B and 234C of the Act. 26. For the above and other grounds and reasons which may be submitted during the course of hearing of the appeal, the assessee requests that the appeal be allowed as prayed and justice be rendered.” Assessment Year 2013-14: “1. That the order of the authorities below in so far as it is against the assessee is opposed to law, facts, circumstances, natural justice, equity all other known principles of law. 2. That the total income and total tax computed is hereby disputed. 3. The authorities below erred in not providing sufficient and adequate opportunity to the appellant as required under law, thereby violating the principles of natural justice, hence the order requires to be cancelled. 4. That the notice, initiation and all subsequent proceedings u/s 148 is bad in law, is without jurisdiction, barred by law and requires to be cancelled. 5. The notice u/s 148 and service thereof is bad in law and the reassessment requires to be cancelled. 6. The conditions precedent to justify the reopening of the assessment u/s 147 of the Act being absent, the reopening of the assessment is bad in law and the reassessment requires to be cancelled. 7. That the order u/s 147 r.w.s.143(3) of the Act is bad in law, as the appellant had disclosed the material facts fully and truly necessary for assessment and there is no new or fresh information or evidence warranting reopening of the assessment. 8. That the entire reassessment proceedings violates the procedure prescribed by the Supreme Court in 259 1TR 19 for 148 proceedings. 9. The reassessment proceedings is on a change of opinion on the same set of facts without there being any new evidence or information which is not permitted under law. Page 5 of 21 ITA Nos. 378 & 379/Bang/2020 10. The reasons / findings of the authorities below are unsustainable and untenable in law as the same is contrary to the facts emerging from the record. 11. That the authorities below erred in relying on material/information without furnishing the same to the assessee before passing the assessment order. 12. That the authorities below erred in relying on uncorroborated statement of Shri Raj Kumar Kedia without providing the copy of the statement and without providing an opportunity of cross examination inspite of request by the assessee. 13. That the authorities below erred in relying on uncorroborated statement of persons namely Shri Dhruv Narayan Jha, Shri Jagdish Prasad Purohit, Shri Devesh Upadhyaya and Shri Anuj Agarwal without furnishing the same to the assessee before passing the assessment order. 14. That the authorities below erred in not providing complete details relied on before calling for objections from the assessee. 15. That the authorities below erred in relying on statements without providing opportunity to cross examine. 16. That the authorities below erred in relying on irrelevant material while ignoring the relevant material. 17. That the authorities below erred in making addition of Rs.10,76,99,848/- as unexplained cash credits u/s 68 of the Act. 18. That the authorities below erred in treating the capital gains declared by the assessee from transfer of shares of M/s. Blue Circle Services Ltd of Rs.10,76,99,848/- u/s 68 of the IT Act. 19. That the authorities below erred in resorting to section 68 of the Act. 20. That the authorities below erred in refusing to apply the beneficial treatment provided under the Act of the Capital gains earned by the assessee from the transfer of Page 6 of 21 ITA Nos. 378 & 379/Bang/2020 shares in M/s. Blue Circle Services Ltd of Rs. 10,76,99,848/-. 21. That the authorities below erred in making addition of Rs.32,30,995/- as Unexplained Expenditure u/s 69C of the Act without adducing any evidence in support of the same. 22. That the authorities below erred in estimating 3% of sale consideration of shares as the commission paid u/s 69C of the Act merely on surmise. 23. The appellant denies the liabilities for interest u/s 234B of the Act. Further prays that the interest if any should be levied only on returned income. 24. No opportunity has been given before levy of interest u/s 234B of the Act. 25. Without prejudice to the appellant's right of seeking waiver before appropriate authority, the appellant begs for consequential relief in the levy of interest u/s 234B of the Act. 26. For the above and other grounds and reasons which may be submitted during the course of hearing of the appeal, the assessee requests that the appeal be allowed as prayed and justice be rendered.” Assessment Year 2012-13: 2. Brief facts of the case are as under: 2.1 The assessee for the above assessment year filed its return of income on 30.03.2013 declaring total income of Rs.5,66,46,210/- consisting of Income from Salary of Rs.2,49,97,600/-, Income from House Property of Rs.35,41,250/-, Income from Business of Rs.24,00,000/-, Short term capital gains of Rs.78,85,727/- and Income from Other sources of Rs.98,23,674/-. The assessee also earned exempt Long term capital gains of Rs.80,97,954/- and dividend of Rs.56,34,559/-. The case was selected for scrutiny and the assessment was completed u/s 143(3) of the Act on 25.03.2015 accepting the return of income. Page 7 of 21 ITA Nos. 378 & 379/Bang/2020 2.2 Subsequently based on the information gathered by the Directorate of Income tax (Investigation), Kolkata, it was noticed that, the scrips of certain companies were manipulated in the securities market by various brokers to artificially increase the price of the scrips to facilitate several persons to book artificial Long term capital gains and claiming the same as exempt income. As the assessee had invested in shares of one such script namely, M/s Blue Circle Services Ltd., and claimed exempted LTCG in respect of the same, the Ld.AO had reason to believe that income chargeable to tax escaped assessment. The Ld.AO thus initiated proceedings u/s 147 of the Act, and completed the assessment u/s 143(3) rws 147 of the Act on 27.12.2018 by arriving at assessed income of Rs.25,33,78,726/- after treating Rs.19,10,02,443/- as Unexplained cash credits u/s 68 and Rs.57,30,073/- as Unexplained Expenditure u/s 69C of the Act. Aggrieved by the above additions, the assessee filed appeal before the Ld.CIT(A). 2.3 Before the Ld.CIT(A), the assessee raised issue on the validity of reopening of assessment u/s. 147 of the Act and that the initiation of notice u/s. 148 to be bad in law. 2.4 Assessee also raised issues on merits. The Ld.CIT(A) dismissed the appeal of the assessee on both the aspects and confirmed the addition made by the Ld.AO. 2.5 Aggrieved by the order of Ld.CIT(A), assessee is in appeal before this Tribunal. 3. Ground nos. 1-10 – These grounds are in respect of challenge raised against issuance of notice u/s. 148 of the Act. Page 8 of 21 ITA Nos. 378 & 379/Bang/2020 3.1 The Ld.AR submitted that, the assessee disclosed all material facts necessary, during the original assessment proceedings, and therefore the Ld.AO, wrongly issued notice u/s. 147 of the Act, which is beyond the period of 4 years. 3.2 She submitted that, the assessment order was passed on 27/12/2018 for A.Y. 2012-13. It is submitted that, the return of income for year under consideration was filed on 30/03/2013, which was processed u/s. 143(1) and the assessment was completed u/s. 143(3) of the Act, accepting the returned income. 3.3 Subsequently on 08/06/2017, the Ld.AO issued notice u/s. 148 of the Act which is beyond the period of 4 years. The Ld.AR submitted that the reasons for reopening was furnished to assessee which are as under: Page 9 of 21 ITA Nos. 378 & 379/Bang/2020 Page 10 of 21 ITA Nos. 378 & 379/Bang/2020 3.4 The objections in respect of the reasons recorded were filed by assessee on 11/10/2017 which are as under: Page 11 of 21 ITA Nos. 378 & 379/Bang/2020 3.5 The Ld.AR submitted that, reassessment proceedings can be initiated beyond the period of 4 years only when, there is fresh evidences or material or information, that lead to the belief that, income escaped assessment. It is the submission of the Ld.AR that, in the present facts of the case, all the details regarding earning of capital gain on transfer of shares of the script M/s. Blue Circles Services Ltd., was furnished by the assessee during Page 12 of 21 ITA Nos. 378 & 379/Bang/2020 the assessment proceedings and after due examination and verification of the claim, the return of income was accepted by the Ld.AO while passing the assessment order u/s. 143(3) of the Act. She submitted that, the reassessment order passed therefore deserves to be quashed as the notice u/s. 148 has been issued without having jurisdiction. 3.6 On the contrary, the Ld.DR submitted that the issue in respect of the capital gain earned on sale of shares of Blue Circles has not been considered by the Ld.AO while passing the assessment order u/s. 143(3) of the Act. He submitted that the notice u/s. 148 is issued beyond the period of 4 years based on fresh evidences available with the Ld.AO, based on which he came to the conclusion that income has escaped assessment. He submitted that this fact is very clear from the reasons recorded. 3.7 The Ld.DR relying on the reasons recorded submitted that the information with the Ld.AO that the shares of Blue Circles sold by the assessee during the year under consideration is penny stock is sufficient reason to form a reasonable belief that income has escaped assessment for the year under consideration. He submitted that the information of the script being a penny stock is fresh / new evidence sufficient to reopen the assessment as there is a reasonable belief that the long term capital gain earned by the assessee on sale of such penny stocks treated as exempt escaped assessment. 3.8 He submitted that in the assessment order dated 25/03/2015 passed by the Ld.AO u/s. 143(3), there is no opinion formed in respect of the capital gains earned by assessee, and Page 13 of 21 ITA Nos. 378 & 379/Bang/2020 therefore the reopening on the issue alleged cannot be treated as change of opinion. 3.9 He thus supported the issuance of notice u/s. 148 to be in accordance with law and relied on the reassessment order passed by the Ld.AO as a consequence of such notice issued. We have perused the submissions advanced by both sides in the light of records placed before us. 4. Before us, the Ld.AR contends that the condition precedent for reopening the assessment beyond the period of 4 years are absent and the reasons of the Ld.AO are unsustainable. On the other hand, the Ld.DR contends that the reasons recorded are very specific based on fresh materials available with the Ld.AO and that the reasons recorded are not merely a ‘reason to suspect’, but it is the reason to believe that the LTCG earned by the assessee on sale of shares of Blue Circle escaped assessment which is a penny stock. 5. Law with regard to, what is meant by "full" and "true" disclosure, has been succinctly laid down by a Constitution Bench of Hon’ble Supreme Court in case of Callcutta Discount Co. Ltd. v. ITO reported in (1961) 41 ITR 191, wherein, Hon’ble Court held as follows : 8, 9, 10 and 11. "8. .....The words used are " omission or failure to disclose fully and truly all material facts necessary for his assessment for that year ". It postulates a duty on every assessee to disclose fully and truly all material facts necessary for his assessment. What facts are material, and necessary for assessment will differ from case to case. In every assessment proceeding, the assessing authority will, for the purpose of computing or determining the proper tax due from an assessee, require to know all the facts which help him in coming to the correct conclusion. From the primary facts in his Possession, whether on disclosure by the assessee, or discovered by him on the basis of the facts disclosed, or otherwise-the assessing authority has to draw inferences as regards certain other facts; and ultimately, from the primary facts and the Page 14 of 21 ITA Nos. 378 & 379/Bang/2020 further facts inferred from them, the authority has to draw the proper legal inferences, and ascertain on a correct interpretation of the taxing enactment, the proper tax leviable. Thus, when a question arises whether certain income received by an assessee is capital receipt, or revenue receipt, the assessing authority has to find out what primary facts have been proved, what other facts can be inferred from them, and taking all these together, to decide what the legal inference should be. 9. There can be no doubt that the duty of disclosing all the primary facts relevant to the decision of the question before the assessing authority lies on the assessee. To meet a possible contention that when some account books or other evidence has been produced, there is no duty on the assessee to disclose further facts, which on due diligence, the Income-tax Officer might have discovered, the Legislature has put in the Explanation, which has been set out above., In view of the Explanation, it will not be open to the assessee to say, for example-" I have produced the account books and the documents: You, the assessing officer examine them, and find out the facts necessary for your purpose: My duty is done with disclosing these account-books and the documents". His omission to bring to the assessing authority's attention these particular items in the account books, or the particular portions of the documents, which are relevant, amount to " omission to disclose fully and truly all material facts necessary for his assessment." Nor will he be able to contend successfully that by disclosing certain evidence, he should be deemed to have disclosed other evidence, which might have been discovered by the assessing authority if he had pursued investigation on the basis of what has been disclosed. The Explanation to the section, gives a quietus to all such contentions; and the position remains that so far as primary facts are concerned, it is the assessee's duty to disclose all of them-including particular entries in account books, particular portions of documents and documents, and other evidence, which could have been discovered by the assessing authority, from the documents and other evidence disclosed. 10. Does the duty however extend beyond the full and truthful disclosure of all primary facts ? In our opinion, the answer to this question must be in the negative. Once all the primary facts are before the assessing authority, he requires no further assistance by way of disclosure. It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else-far less the assessee--to tell the assessing authority what inferences-whether of facts or law should be drawn. Indeed, when it is remembered that people often differ as regards what inferences should be drawn from given facts, it will be meaningless to demand that the assessee must disclose what inferences-whether of facts or law-he would draw from the primary facts. 11. If from primary facts more inferences than one could be drawn, it would not be possible to say that the assessee should have drawn any particular inference and communicated it to the assessing authority. Page 15 of 21 ITA Nos. 378 & 379/Bang/2020 How could an assessee be charged with failure to communicate an inference, which he might or might not have drawn?" 6. In the same context, reference is placed on the Full bench decision of Hon’ble Delhi High Court in case of CIT v. Usha International Ltd. reported in (2012) 25 taxmann.com 200, wherein, it is held as under: "13. It is, therefore, clear from the aforesaid position that: (1) Reassessment proceedings can be validly initiated in case return of income is processed under section 143(1) and no scrutiny assessment is undertaken. In such cases there is no change of opinion; (2) Reassessment proceedings will be invalid in case the assessment order itself records that the issue was raised and is decided in favour of the assessee. Reassessment proceedings in the said cases will be hit by principle of change of opinion? (3) Reassessment proceedings will be invalid in case an issue or query is raised and answered by the assessee in original assessment proceedings but thereafter the Assessing Officer does not make any addition in the assessment order. In such situations it should be accepted that the issue was examined but the Assessing Officer did not find any ground or reason to make addition or reject the stand of the assessee. He forms an opinion. The reassessment will be invalid because the Assessing Officer had formed an opinion in the original assessment, though he had not recorded his reasons." 7. Admittedly, the notice is issued beyond the period of four years. Before us the Ld.AR submitted that the assessee had filed all the relevant details at the time of original assessment proceedings. Therefore, the re-opening of notice under section 148 of the Act, without there being any failure on the part of the assessee to fully and truly disclose all material and relevant facts to determine the income in the hands of the assessee being the pre-requisite stands fulfilled. We principally agree with the arguments advanced by the revenue, that income has escaped assessment and that there is fresh material to come to the conclusion that income has escaped assessment. However the mandate of the law that there was no full and true disclosure of Page 16 of 21 ITA Nos. 378 & 379/Bang/2020 all material and relevant facts to determine true income, does not stand fulfilled at the time of issuance of notice under section 148 issued beyond the period of 4 years. 8. Respectfully following the views taken by Hon’ble Delhi High Court in the above referred cases, we quash and set aside the notice issued under section 148 of the Act. As a consequent, assessment order passed under section 147 r.w.143(3) stands quashed and set aside. Accordingly Grounds 1-10 raised by the assessee of for assessment year 2012-13 stands allowed on the legal issue. In the result, appeal filed by the assessee for assessment year 2012-13 stands allowed. Assessment Year 2013-14: 9. The Ld.AR submits that similar is the issue on merits alleged by assessee in respect of the long term capital gain earned during the year under consideration by assessee upon sale of shares in Blue Circle Services Ltd. She did not object for the remand of the issue in accordance with the observations of this Tribunal in case of Ms. Sarita Dudheria vs. ACIT (supra). The relevant para that has been reproduced hereinabove. Respectfully following the observations therein and applying the ration mutatis mutandis we direct the Ld.AO to reexamine the case in the light of the directions by the Coordinate Bench of this Tribunal in case of Ms. Sarita Dudheria vs. ACIT (supra). 10. On merits of the case, the assessee submits that the LTCG earned by assessee on sale of shares in Blue Circle Services Ltd. were through recognised stock exchange and banking channels. It is submitted that both receipts and payments are done through Account Payee cheques. The Ld.AR relying on third party Page 17 of 21 ITA Nos. 378 & 379/Bang/2020 statements submitted that assessee has not been provided an opportunity to cross examine these individuals on whose statements the addition has been made in the hands of the assessee. 11. On the contrary, the Ld.DR relied on the observations by the Coordinate Bench of this Tribunal in case of Ms. Sarita Dudheria vs. ACIT in ITA Nos. 380 to 382/Bang/2020 by order dated 15/03/2022 wherein identical issue in respect of long term capital gain earned by the assessee therein on sale of the shares of Blue Circles Ltd. was earned. He submitted that the issue may be remanded to the Ld.AO to verify in accordance with the directions therein. We have perused the submissions advanced by both sides in the light of records placed before us. 12. We note that the issue of sale of shares in case of Blue Circles has been considered by Coordinate Bench of this Tribunal in the case relied by the Ld.AR (supra) by observing as under: “6.4. In present facts of the case, the statements recorded of third parties only reveal that the alleged companies involved in providing bogus LTCG/STCG or LTCL/STCL and provide accommodation entries by beneficiaries. We note that the Ld.AO in para 7.11 for AY 2013-14 raised serious doubts on capacity of assessee to purchase shares of these companies in such huge volumes, which has not been satisfactorily/reasonably established by assessee to be genuine. Assessee thus did not establish genuineness of purchase and source of investment of this company during the relevant period. 6.5. Ld.AO upon verifying credentials of these companies and other attending circumstances, observed that alleged companies were included in list of penny stock companies, in enquiries conducted by SEBI/BSE, as well as in Investigation Report issued by Investigation Wing, Kolkata. The Assessee having purchased shares of this company in huge volumes, should have possessed all required documents, as a prudent investor. The Assessee thus did not establish activities/business of companies, financial statements, annual income tax returns etc., in respect of alleged companies. Page 18 of 21 ITA Nos. 378 & 379/Bang/2020 6.6. In the above list of decisions, relied by the Ld.AR, we note that the Hon’ble Mumbai Tribunal deleted the addition on the basis that the assessee therein established the sale of shares to be genuine and therefore the disallowance of LTCG is unwarranted for. However in the present facts of the case, the Ld.AO has doubted the capacity of assessee in making such huge investment in the alleged comapnies during the year in which they were purchased. 6.7. The decision of Hon’ble Delhi, Bombay and Madras High Courts is also on distinguishing facts. In those cases, the statements of third person recorded were direct evidence against the assessed person and cross examination was denied by the revenue. Under such circumstances, Honble Courts held that there was violation of natural justice. 6.8 Therefore in our view, none of the decisions are of any help to assessee on merits in the present facts of the case. The Ld.AR relied heavily on the decision of coordinate bench of this Tribunal in Shri.Lxmipat Dudheria Vs.ACIT in ITA no.2373 to 2376/Bang/2018 by order dated 09/04/2019, wherein investment in Bule circles Services Ltd by the assessee therein and the there assessment was reopened which was struck down by this Tribunal. We note that in the decision by this Tribunal nothing is decised on merits but the entire decision was on the validity of reopening where there the assessment order was passed under section144 of the Act. We therefore are of the opinion that the decision is of no rescue to assessee. 6.9. We are conscious of principle laid down by Hon’ble Supreme Court in case of M/s Andaman Timber Industries vs CCE, Kolkata-II, reported in (2015) 127 DTR 241, in support of his contention as well as decision of Hon’ble High Courts relied by the Ld.AR. All these decisions lay down that, without opportunity of cross-examination, statements cannot be relied upon against any asessee. However, such right, as held in various decisions by Hon’ble Supreme Court, is not an absolute right and depends on circumstances of the case and the statute concerned, as held in State of J&K Vs. Bakshi Gulam Mohd. AIR 1967 (SC) 122, and Nath International Sales Vs. UOI reported in AIR 1992 Del 295. Similar is the view taken by Hon’ble Allahabad High Court in case of In case of Prem Castings Pvt.Ltd. Vs.CIT (Supra). 6.10. At this juncture we referred to decision of T.Devasahaya Nadar V. CIT reported in (1964) 51 ITR 20 (Mad), wherein, it has been held that; "We are of opinion that it cannot be said as a general proposition of law that any evidence upon which the Page 19 of 21 ITA Nos. 378 & 379/Bang/2020 department might rely should have been subjected to cross-examination. The procedure for assessment is indicated in section 23 (3) of the Act.” 6.11. Further Hon’ble Mumbai Tribunal in case of GTC Industries Ltd. V. Asstt. CIT reported in (1998) 60 TTJ 308 , held that, where statement and report of third parties are only secondary and subordinate material which were used to buttress the main matter connected with the quantum of addition, denial of opportunity to cross examine third parties did not amount to violation of natural justice. 6.12. Therefore, each case has to be decided on facts and circumstances of that case. In our considered opinion, relevant factors to be considered are surrounding circumstances, objective facts, evidence adduced, presumption of facts based on common human experience in life and reasonable conclusions. 6.13. Under such circumstances, the assessee was liable to discharge its onus regarding purchase of shares by way of cogent documentary evidences. We note that assessee has not placed anything on record regarding the source of investments and capacity to invest such huge monies during the year in which the investments were made. Be that as it may, we also note that, the assessee having invested huge monies in these alleged companies, has not been able to provide any documents to establish sound financial of these companies and that, the fluctuation in price was market driven. Assessee is therefore directed to provide all relevant documents to establish source of investment and capacity to invest in the alleged companies in the year of investment. Ld.AO shall take all evidences into consideration and then decide the issue as per law. 6.14. At the outset we also hold that the statements recorded are secondary and subordinate evidence, and therefore cross examination is not relevant. Ld.AO is directed to re-examine the case of assessee in the light of aforestated direction in accordance with law. Needless to say that proper opportunity shall be granted to assessee to represent its case as per. Accordingly we allow grounds on merits raised by assessee for statistical purposes for all the years under consideration.” 13. Para 6.8 has been rectified wherein the following amendment was issued by way of M.P. No. 41/Bang/2022 by order dated 01/07/2022. “3. We note that section 148 also has to be mentioned in the said para which was missed out originally. Henceforth the limited portion of para 6.8 shall be read as under: Page 20 of 21 ITA Nos. 378 & 379/Bang/2020 “6.8................We note that in the decision by this Tribunal nothing is decided on merits but the entire decision was on the validity of reopening where there the assessment order was passed under section 144 r.w.s. 148 of the Act. We therefore are of the opinion that the decision is of no rescue to assessee.”” 14. We note that the scrip involved in the present facts of the case is also Blue Circle Services Ltd. and the assessee before us had earned long term capital gains that was treated as exempt u/s. 10(38) of the Act. The arguments advanced by the Ld.AR are identical with that raised in the case of M/s. Sarita Dudheria vs. ACIT (supra) before this Tribunal. Respectfully following the view taken by Coordinate Bench of this Tribunal in that case (hereinabove), we remand the present case back to the Ld.AO. Based on the above, we remand the present case back to the Ld.AO to be decided in accordance with the principles laid down hereinabove. Accordingly, the appeal filed by the assessee for Assessment Year 2013-14 stands allowed for statistical purposes. In the result, the appeal filed by the assessee for A.Y. 2013-14 stands allowed for statistical purposes. Order pronounced in the open court on 29 th August, 2022. Sd/- Sd/- (CHANDRA POOJARI) (BEENA PILLAI) Accountant Member Judicial Member Bangalore, Dated, the 29 th August, 2022. /MS / Page 21 of 21 ITA Nos. 378 & 379/Bang/2020 Copy to: 1. Appellant 4. CIT(A) 2. Respondent 5. DR, ITAT, Bangalore 3. CIT 6. Guard file By order Assistant Registrar, ITAT, Bangalore