Manish Kumar Jain , Bangalore V. The Income Tax Officer Ward-5(2)(2), Bangalore

ITA 583/BANG/2018

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5478 (ITAT-BANGALORE)
• Duration Of Justice: 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 01-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: L V BHASKAR REDDY
• Keywords: Principle of natural justice; Validity of assessment
• Section: 234B; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 58 3 / BANG/201 8 ASSESSMENT YEAR : 200 8 - 09 SHRI MANISH KUMAR JAIN, PROP: MEHANDI CREATION, NO. 3, M.B.T. STREET, NAGARATHPET CROSS, BANGALORE 560 002. PAN: AFOPK5331B VS. THE INCOME TAX OFFICER, WARD 5 (2) (2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SMT. SUMAN LUNKAR, CA RESPONDENT BY : SHRI L.V. BHASKAR REDDY, ADDL. CIT (DR) DATE OF HEARING : 20 . 0 3 .2018 DATE OF PRONOUNCEMENT : 20 . 0 3 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT(A) 5, BANGALOREDATED 11.01.2018 FOR ASSESSMEN T YEAR 2008-09. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE LEARNED ASSESSING OFFICER HAD ERRED IN PASSI NG THE ORDER IN THE MANNER PASSED BY HIM AND THE LEARNED COMMISSION ER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE SAME. THE IMPUGNED ORDERS BEING BAD IN LAW, VOID AB-INITIO ARE REQUIRED TO BE QUASHED. 2.1 IN ANY CASE, THE CONDITIONS PRECEDENT FOR THE I SSUE OF NOTICE U/S. 148 OF THE ACT BEING ABSENT, THE RE-OPENING OF ASSE SSMENT BECOMES BAD IN LAW AND CONSEQUENTLY THE ORDER AS PASSED/CON FIRMED BEING ALSO BAD IN LAW IS REQUIRED TO BE QUASHED. 2.2 IN ANY CASE THE ASSESSING OFFICER HAVING NOT CO MPLIED WITH LEGAL PROVISIONS / PROCEDURE FOR REOPENING / REASSESSMENT , THE CONSEQUENTIAL ORDER BECOMES BAD IN LAW AND LIABLE T O BE QUASHED. 3. IN ANY CASE THE ORDER PASSED IN GROSS VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE AND FAIR PLAY, ESPECIALLY IN THE AB SENCE OF THE CROSS ITA NO. 583/BANG/2018 PAGE 2 OF 4 EXAMINATIONS OF THE PERSONS WHOSE AVERMENTS ARE SOU GHT TO BE RELIED UPON BY THE ASSESSING OFFICER WHILE PASSING THE ORD ER, MAKES THE ORDER TOTALLY HAD IN LAW AND LIABLE TO BE CANCELLED . 4. THE LEARNED ASSESSING OFFICER HAS ERRED IN MAKIN G ADDITION OF RS. 24,26,250/- TO THE INCOME OF THE APPELLANT AND THE LEARNED CIT (A) -5 HAS ERRED IN CONFIRMING THE SAME. THE ADDITION TO T HE INCOME IS BAD IN BOTH LAW AND ON FACTS AND IS LIABLE TO BE DELETED I N ENTIRETY. 5. THE AUTHORITIES BELOW HAVE NOT PROPERLY APPRECIA TED THE FACTS OF THE CASE. ON PROPER APPRECIATION OF THE FACTS AND LAW A PPLICABLE, IT WILL BE CLEAR THAT THE ADDITION AS MADE/CONFIRMED HAS NO BASIS TO STAND AND IS LIABLE TO BE DELETED IN ENTIRETY. 6. IN ANY CASE, THE APPELLANT HAVING NEVER DEALT WI TH THE SHARES OF IFCI LTD., THE ADDITION AS MADE AND CONFIRMED BY AU THORITIES BELOW IS TOTALLY ON ERRONEOUS PREMISE IS TO BE DELETED. 7. THE VARIOUS CONCLUSION AND OBSERVATIONS MADE / D RAWN BY THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT HAS N O JUSTICE AND ARE BASED ONLY ON SURMISES, CONJECTURES AND HEARSAY, HE NCE ARE TO BE DISREGARDED IN TOTO. 8. THE APPELLANT DENIES LIABILITY TO PAY INTEREST/S 234A, 234B AND 234C OF THE ACT. THE INTEREST HAVING BEEN ERRONEOUS LY LEVIED IS TO BE DELETED. 9. IN VIEW OF THE ABOVE AND OTHER GROUNDS TO BE ADD UCED AT THE TIME OF HEARING, IT IS REQUESTED THAT THE IMPUGNED ORDER BE QUASHED OR ATLEAST THE INCOME FROM LONG TERM CAPITAL GAIN EARNED ON SA LE OF SHARES AS RETURNED BY THE APPELLANT BE ACCEPTED, THE ASSESSME NT OF RS. 24,26,250/- UNDER THE HEAD INCOME FROM OTHER SOURCE S BE DELETED AND THE INTEREST LEVIED BE ALSO DELETED. 3. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F THE ASSESSEE THAT IN THE PRESENT CASE, THE ADDITION WAS MADE BY THE AO IS ON THE BASIS OF STATEMENT OF SHRI MUKESH CHOKSI, DIRECTOR OF M/S. MAHASAGAR SECU RITIES PVT. LTD. SHE SUBMITTED THAT UNDER SIMILAR FACTS IN THE CASE OF S HRI MUKESH KUMAR SOLANKI VS. ITO IN ITA NO. 2168/BANG/2016 DATED 17.03.2017, THE TRIBUNAL HAS RESTORED THE MATTER BACK TO THE FILE OF AO FOR FRESH DECISIO N WITH THE SAME DIRECTIONS AS WERE GIVEN BY HON'BLE KARNATAKA HIGH COURT IN A JUD GMENT RENDERED IN THE CASE OF CHANDRA DEVI KOTHARI IN WRIT PETITION NO. 3 9370/2014 DATED 02.02.2015. SHE SUBMITTED A COPY OF THIS TRIBUNAL ORDER AND REQUESTED THAT IN THE PRESENT CASE ALSO, THIS ISSUE SHOULD BE RESTORE D BACK TO THE FILE OF AO FOR ITA NO. 583/BANG/2018 PAGE 3 OF 4 FRESH DECISION WITH THE SAME DIRECTIONS. THE LD. D R OF REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND FORCE IN THE SUBMISSIONS OF LD. AR OF THE ASSESSEE BECAUSE NO DIFFERENCE IN FACTS C OULD BE POINTED OUT BY LD. DR OF REVENUE. I REPRODUCE PARAS 5 AND 6 OF THIS T RIBUNAL ORDER RENDERED IN THE CASE OF SHRI MUKESH KUMAR SOLANKI VS. ITO(SUPRA). T HE SAME READS UNDER. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FIRS T OF ALL, I REPRODUCE PARA NO.8 OF THE JUDGMENT OF HON'BLE KARN ATAKA HIGH COURT RENDERED IN THE CASE OF M/S CHANDRA DEVI KOTH ARI (SUPRA) AND THIS IS AS UNDER:- 8. IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES AS A DVERTED TO ABOVE, AND AS THE PETITIONER HAS BEEN DENIED AN OPP ORTUNITY 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 HEA RING TO THE PETITIONER AND BY FURNISHING THE DETAILS/COPY OF TH E STATEMENT BASED ON WHICH THE IMPUGNED ASSESSMENT ORDER HAS BE EN PASSED.' 6. FROM THE ABOVE PARA FROM THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT, IT IS SEEN THAT MATTER WAS RESTORED BAC K TO THE FILE OF THE AO FOR FRESH DECISION AFTER PROVIDING COPY OF THE S TATEMENT OFSHRI MUKESH CHOKSI. AS PER THE FACTS NOTED BY THE HIGH C OURT IN THE EARLIER PARAS OF JUDGMENT AND AS PER THE FACTS OF THE PRESE NT CASE, I FIND THAT THE FACTS ARE SIMILAR AND LD DR OF THE REVENUE ALSO COULD NOT POINT OUT ANY DIFFERENCE IN FACTS AND HENCE, BY RESPECTFULLY FOLLOWING THIS JUDGMENT OF KARNATAKA HIGH COURT, I SET ASIDE THE O RDER OF LD CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE AO FOR FR ESH DECISION WITH THE SAME DIRECTIONS AS WERE GIVEN BY THE HON'BLE KARNAT AKA HIGH COURT IN THE CASE AS PER PARA NO.8 OF THE JUDGMENT REPROD UCED ABOVE. IN VIEW OF THIS DECISION, NO ADJUDICATION IS CALLED FO R AT THIS STAGE REGARDING THE MERIT OF THE ADDITION. 5. RESPECTFULLY FOLLOWING THIS TRIBUNAL ORDER, I DE CIDE THIS ISSUE IN THE PRESENT CASE ALSO ON SIMILAR LINE AND RESTORE THIS MATTER BACK T O THE FILE OF AO FOR FRESH DECISION WITH THE SAME DIRECTIONS AS WERE GIVEN BY HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CHANDRA DEVI KOTHARI(SUPRA) AS PER PARA 8 OF THE JUDGMENT WHICH IS REPRODUCED ABOVE.IN VIEW OF THIS DECISION, NO ADJUDICATION IS CALLED FOR REGARDING MERIT OF THE ADDITION AT THIS STAGE. ITA NO. 583/BANG/2018 PAGE 4 OF 4 6. REGARDING THE SECOND ISSUE RAISED IN THESE APPEA LS IN RESPECT OF VALIDITY OF ASSESSMENT PROCEEDINGS, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THIS ISSUE IS NOT PRESSED AND ACCORDINGLY THIS ISSUE IS REJECT ED AS NOT PRESSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 20 TH MARCH, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.