Shobha M.Makana , Raichur V. The Income Tax Officer Ward-1, Raichur

ITA 481/BANG/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9477 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-05-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 28-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: H N KHINCHA
• Keywords: Opportunity of being heard; Accommodation entries; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI B.R BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.481/BANG/2017 ASSESSMENT YEAR : 2010-11 SHOBHA M MAKANA, M/S SMM TRADERS NO.11-2-21, M.G ROAD, LOHARWADI, RAICHUR-584 101. PAN AIUPM 2085 K. VS. THE INCOME-TAX OFFICER, WARD-1, RAICHUR. APPELLANT RESPONDENT APPELLANT BY : SHRI H.N KHINCHA, C.A RESPONDENT BY : SHRI R.N SIDDAPPAJI, ADDL. CIT DATE OF HEARING : 01.07.2019 DATE OF PRONOUNCEMENT : 02.07.2019 O R D E R O R D E R PER B.R BASKARAN, ACCOUNTANT MEMBER BOTH THE APPEALS FILED BY THE ASSESSEE ARE DIRECTE D AGAINST THE ORDER DATED 29/12/2016 PASSED BY LD CIT(A), GUL BARGA AND THEY RELATE TO ASSESSMENT YEARS 2010-11 AND 2011-12 . SINCE THE ISSUES URGED IN THESE APPEALS ARE IDENTICAL IN NATU RE, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO MMON ORDER, FOR THE SAKE OF CONVENIENCE. ITA NO.2189/BANG/2016 PAGE 2 OF 6 2. IN BOTH THE YEARS, THE ASSESSEE IS CONTESTING TH E REJECTION OF CLAIM OF LONG TERM CAPITAL GAIN ARISING ON THE SALE OF SHARES AND CONSEQUENTLY ASSESSING THE ENTIRE SALE CONSIDERATIO N AS INCOME OF THE ASSESSEE. 3. THE LD COUNSEL APPEARING FOR THE ASSESSEE SUBMIT TED THAT THE ASSESSEE IS INVESTING IN SHARES OF VARIOUS COMPANIE S FOR THE PAST SEVERAL YEARS. DURING THE YEARS RELEVANT TO THE AS ST. YEARS 2007-08 TO 2009-10, THE ASSESSEE HAD PURCHASED AND SOLD CER TAIN SHARES THROUGH THE CONCERNS BELONGING TO A SHARE BROKER NA MED SHRI MUKESH CHOKSI. THE ABOVE SAID BROKER APPEARS TO HA VE ADMITTED BEFORE THE TAX AUTHORITIES THAT HE AND HIS GROUP OF COMPANIES WERE GIVING ONLY ACCOMMODATION ENTRIES WITHOUT ACTUAL PU RCHASE AND SALE OF SHARES. ACCORDINGLY THE ASSESSEES CLAIM O F CAPITAL GAIN WAS REJECTED IN THE ABOVE SAID YEARS AND THE SALE CONSI DERATION RECEIVED ON SALE OF SHARES WAS ASSESSED AS INCOME OF THE ASS ESSEE IN AY 2007-08 TO 2009-10. WHEN THE MATTER REACHED THE TR IBUNAL, THE SMC BENCH OF ITAT, VIDE ITS ORDER DATED 16-06-2017 PASSED IN ITA NOS.479, 480 AND 937/BANG/2017, RESTORED THE MATTER S TO THE FILE OF THE AO WITH THE DIRECTION TO ALLOW THE ASSESSEE TO CROSS EXAMINE SHRI MUKESH CHOKSI. 4. THE LD AR SUBMITTED THAT THE AO, FOLLOWING THE O RDERS PASSED BY HIM FOR ASST. YEARS 2007-08 TO 2009-10 HAS ASSES SED THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE ON SALE OF S HARES AS INCOME OF THE ASSESSEE IN BOTH THE YEARS UNDER CONSIDERATI ON ALSO, REJECTING THE CLAIM OF CAPITAL GAINS. THE LD AR SU BMITTED THAT THE ITA NO.2189/BANG/2016 PAGE 3 OF 6 ASSESESE, DURING THE YEARS UNDER CONSIDERATION, HAS NOT EITHER PURCHASED OR SOLD ANY OF THE SECURITIES THROUGH SHR I MUKESH CHOKSI GROUP. ACCORDINGLY HE CONTENDED THAT THE TA X AUTHORITIES ARE NOT JUSTIFIED IN REJECTING THE CLAIM OF CAPITAL GAINS BY THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE HAS PURCH ASED AND SOLD SHARES OF REPUTED COMPANIES, WHICH HAVE NOT BEEN DE ALT BY SHRI MUKESH CHOKSI AT ALL. THE LD AR FURTHER SUBMITTED THAT THE LD CIT(A) HAS REFERRED TO THE SHARES OF TWO COMPANIES VIZ. M/S UNIVERSAL CREDIT AND M/S ZEN SAVINGS IN HIS ORDER . THE ASSESSEE HAS PURCHASED THOSE SHARES IN THE EARLIER YEARS THR OUGH SHRI MUKESH CHOKSI GROUP, BUT HELD THE SAME AS INVESTMEN T IN HIS BOOKS OF ACCOUNT I.E THOSE SHARES HAVE NOT BEEN SOL D BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. ACCO RDINGLY THE LD AR SUBMITTED THAT THE LD CIT(A) WAS NOT JUSTIFIED I N CONFIRMING THE ASST. ORDER IN BOTH THE YEARS BY CONSIDERING THE SH ARES PURCHASED IN THE EARLIER YEARS. 5. THE LD DR, ON THE CONTRARY, SUBMITTED THAT THE C ONTENTIONS OF THE ASSESEE REQUIRE EXAMINATION. 6. IN THE REJOINDER THE LD AR SUBMITTED THAT THE AS SESSEE HAS FURNISHED PROOFS IN ITS PAPER BOOK TO SHOW THAT THE SHARES SOLD DURING THE YEARS UNDER CONSIDERATION WERE PURCHASED AND SOLD THROUGH BROKERS, WHO ARE NOT CONNECTED WITH SHRI MU KESH CHOKSI GROUP. HE ALSO SUBMITTED THAT THE MATTERS MAY BE R ESTORED TO THE FILE OF THE AO FOR EXAMINING THE CLAIM OF THE ASSES SEE. ITA NO.2189/BANG/2016 PAGE 4 OF 6 7. WE HEARD THE RIVAL CONTENTIONS AND PERUSED THE R ECORD. WE NOTICED THAT THE AO HAS REJECTED THE CLAIM OF CAPIT AL GAINS ONLY FOR THE REASON THAT THE ASSESSEE HAS PURCHASED AND SOLD SHARES THROUGH SHRI MUKESH CHOKSI GROUP . THE CONTENTION OF THE ASSESSEE IS THAT THE SHARES SOLD DURING THE YEARS U NDER CONSIDERATION, HAVE BEEN PURCHASED AND SOLD THROUG H BROKERS WHO ARE NOT CONNECTED WITH THE SHRI MUKESH CHOKSI GROU P. ACCORDING TO LD AR THE ASSESSEE HAS FURNISHED RELEVANT DOCUME NTS IN THE PAPER BOOK. IF THE ASSESSEE HAS PURCHASED AND SOLD THE SHARES THROUGH OTHER BROKERS, THE STAND TAKEN BY THE REVEN UE WITH REGARD TO DEALING WITH SHRI MUKESH CHOKSI GROUP, IN OUR VI EW, CANNOT BE APPLIED ON THOSE SHARES. THE AO SHOULD EXAMINE THE TRANSACTIONS INDEPENDENTLY WITHOUT BEING INFLUENCED BY THE STAND TAKEN BY THE REVENUE IN RESPECT OF SHARES PURCHASED AND SOLD THR OUGH MUKESH CHOKSI GROUP. HOWEVER, AS SUBMITTED BY LD DR, THE CLAIM OF THE ASSESSEE REQUIRES EXAMINATION AT THE END OF THE AO BY DULY CONSIDERING VARIOUS EVIDENCES FURNISHED BY THE ASSE SSEE. ACCORDINGLY WE ARE OF THE VIEW THAT VARIOUS CONTENT IONS OF THE ASSESSEE REQUIRE EXAMINATION AT THE END OF AO. ACC ORDINGLY WE SET ASIDE THE ORDERS PASSED THE LD CIT(A) IN BOTH THE Y EARS UNDER CONSIDERATION AND RESTORE THEM TO THE FILE OF THE A O FOR EXAMINING THE CLAIM OF THE ASSESSEE. AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD AND ALSO BY DULY CONSIDERING EXPLANATIO NS OF THE ASSESSEE AND VARIOUS DOCUMENTS THAT MAY BE FURNISH ED BY HIM, THE AO MAY TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. ITA NO.2189/BANG/2016 PAGE 5 OF 6 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND JULY, 2019. SD/ - (BEENA PILLAI) JUDICIAL MEMBER SD/ - (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, 2 ND JULY, 2019. /VMS / COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3 . THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER A SST. REGISTRAR, ITAT, BANGALORE. ITA NO.2189/BANG/2016 PAGE 6 OF 6 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..