SURENDRAKUMAR R. BOHRA, MUMBAI V. ITO 24(3)(3), MUMBAI

ITA 4825/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 101128 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 13-08-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 21-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOURYA PRATAP
• Section: 148

Judgement Text

, SMC , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC , MUMBAI , . . , , , BEFORE SHRI B.R.BASKARAN , AM AND SHRI LALIT KUMAR , JM ITA NO. 4825 /MUM/201 4 : ASST.YEAR 200 5 - 200 6 SHRI SURENDRAKUMAR R. BOHRA S/3/36, VISHRAM SITHAL BANGUR NAGAR, GOREGAON (WEST) MUMBAI 400 090. PAN : AEZPB6907N / VS. THE INCOME TAX OFFICER WARD 2 4 ( 3 )( 3 ) MUMBAI. ( / APPELLANT) ( / RESPONDENT) /APPELLANT BY : SHRI AJAY SINGH /RESPONDENT BY : SHRI MOURYA PRATAP / DATE OF HEARING : 1 3 .08. 2015 / DATE OF PRONOUNCEMENT : 23.09 .2015 / O R D E R PER LALIT KUMAR (JM) : THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 09 - 04 - 2014 PASSED BY LD CIT(A) - 34, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2005 - 06. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE FILED HIS ORIGINAL RETURN OF INCOME ON 31.8.2005 DECLARING A TOTAL INCOME OF RS.1,81,809/ - AND THE SAME WAS PROCESSED U/S 143(1) OF THE ACT. THE ASSESSEE HAD ALSO DECLARED LONG TERM CAPITAL GAIN OF RS.9,99,561/ - FROM SALE OF SHARES. SUBSEQUENTLY, UPON THE SEARCH CONDUCED IN THE HANDS OF SHRI MUKESH CHOKSI AND HIS GROUP OF COMPANIES, IT CAME TO LIGHT THAT THEY WERE ITA NO. 4825 /MUM/201 4 . SHRI SURENDRAKUMAR R.BOHRA 2 ISSUING BOGUS ACCOMMODATION BILLS IN ORDER TO ENABLE THE PARTIES TO DECLARE BOGUS LONG TERM CAPITAL GAINS FROM SALE OF SHARES. THE ASSESSEE HAD ALSO TR ANSACTED WITH THOSE GROUP AND HENCE, ON THE BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT, THE AO REOPENED THE ASSESSMENT OF THE YEAR UNDER CONSIDERATION BY ISSUING NOTICE U/S 148 OF THE ACT ON 28.3.2011. IN THE RE - OPENED THE ASSESSMENT, THE AO ASSESSED LONG TERM CAPITAL GAIN DECLARED BY HIM AS INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES. THE AO ALSO ASSESSED 5% OF THE LONG TERM CAPITAL GAIN AS INCOME OF THE ASSESSEE TOWARDS THE EXPENSES INCURRED IN PROCUR ING THE LONG TERM CAPITAL GAIN. THE ASSESSEE COULD NOT SUCCEED IN THE APPEAL FILED BEFORE LD CIT(A) AND HENCE HE HAS FILED THIS APPEAL BEFORE US. 3. AT THE TIME OF HEARING, THE LD COUNSEL SUBMITTED THAT THE ASSESSING OFFICER HAS NOT ISSUED THE STATUT ORY NOTICE PRESCRIBED U/S 143(2) OF THE ACT BEFORE SCRUTINISING THE RETURN OF INCOME AND HENCE THE IMPUGNED ASSESSMENT ORDER IS BAD IN LAW IN VIEW OF THE DECISION OF HONBLE SUPREME COURT RENDERED IN THE CASE OF HOTEL BLUE MOON (321 ITR 362). THE LD D.R COULD NOT CONTRADICT THE SAME. 4. IN THE CASE OF HOTEL BLUE MOON (SUPRA), THE HONBLE SUPREME COURT HAS HELD THAT THE ISSUE OF NOTICE WITHIN THE PRESCRIBED TIME U/S 143(2) OF THE ACT IS MANDATORY WITHOUT WHICH THE AO COULD NOT ASSUME JURISDICTION TO S CRUTINISE THE RETURN OF INCOME. IN THE INSTANT CASE, THE CONTENTION OF THE ASSESSEE THAT NO NOTICE U/S 143(2) OF THE ACT WAS ISSUED BY THE AO COULD NOT BE CONTROVERTED BY THE DEPARTMENT. IN THE ABSENCE OF NOTICE U/S 143(2) OF THE ACT, THE AO COULD NOT HA VE ASSUMED JURISDICTION TO SCRUTINISE THE RETURN OF INCOME FILED BY THE ASSESSEE. IN VIEW OF THE ABOVE, THE IMPUGNED ITA NO. 4825 /MUM/201 4 . SHRI SURENDRAKUMAR R.BOHRA 3 ASSESSMENT ORDER IS ILLEGAL AND BAD IN LAW. ACCORDINGLY WE SET ASIDE THE ORDER OF LD CIT(A) AND QUASH THE IMPUGNED ASSESSMENT ORDER PASSE D BY THE AO. 5. SINCE WE HAVE QUASHED THE ASSESSMENT ORDER, THERE IS NO NECESSITY TO ADJUDICATE THE OTHER GROUNDS URGED BY THE ASSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 23 RD D AY OF SEPT , 2015 . SD SD ( B.R.BASKARAN ) ( LALIT KUMAR ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 23RD , 2015 . DEVDAS* / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT , MUMBAI. 4. / CIT(A) - 34 , MUMBAI 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI