Usha Kothari, Chennai V. ITO, Non Corp ward-10(4), Chennai

ITA 606/CHNY/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1219 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 08-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANATH KUMAR RAHA
• Assessee Lawyers: D ANAND
• Keywords: Set aside

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL C SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ ITA NO.606/CHNY/2019 ' #$' / ASSESSMENT YEAR : 2011-12 SMT. USHA KOTHARI, C/O M/S PASS ASSOCIATES, UNIT NO.208, 2 ND FLOOR, BETA WING, RAHEJA TOWERS, NO.113-134, ANNA SALAI, CHENNAI - 600 002 PAN : AAAPU 8229 R V. THE INCOME TAX OFFICER, NON CORPORATE WARD 10(4), CHENNAI - 600 034. (&'/ APPELLANT) (()&'/ RESPONDENT) &' * + / APPELLANT BY : SHRI D. ANAND, ADVOCATE ()&' * + / RESPONDENT BY : SHRI SANATH KUMAR RAHA, JCIT , # * -. / DATE OF HEARING :03.07.2019 /0$ * -. / DATE OF PRONOUNCEMENT : 04.09.2019 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -12, CHENN AI, DATED 10.01.2019 AND PERTAINS TO ASSESSMENT YEAR 2011-12. 2. SHRI D. ANAND, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE PURCHASED AND SOLD SHARES OF M/S SPLASH MEDIA 2 I.T.A. NO.606/CHNY/19 THROUGH BANKING CHANNEL. ACCORDING TO THE LD. COUN SEL, THE ASSESSING OFFICER BY PLACING RELIANCE ON THE SO-CAL LED INVESTIGATION REPORT SAID TO BE RECEIVED FROM THE DIRECTORATE OF INVESTIGATION, KOLKATA FOUND THAT THE ASSESSEE KNOWINGLY INVESTED IN A PENNY STOCK COMPANY. THE CIT(APPEALS) ALSO CONFIRMED THE ORDER OF THE ASSESSING OFFICER. PLACING RELIANCE ON THE ORDER O F THIS TRIBUNAL IN VIJAY KUMAR BAID (HUF) V. ITO IN I.T.A. NO.2300/CHN Y/2018 DATED 24.01.2019 AND IN SHRI NIRAV KUMAR MAHENDRA KUMAR S APANI V. DCIT IN I.T.A. NO. 2032/MDS/2017 DATED 08.02.2018, THE LD.COUNSEL SUBMITTED THAT WHEN THE TRANSACTIONS WERE MADE THRO UGH BANKING CHANNEL, THE TRANSACTIONS CANNOT BE DOUBTED. 3. SHRI SANATH KUMAR RAHA, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE MADE IN VESTMENT IN A PENNY STOCK COMPANY. REFERRING TO THE ORDERS OF TH E ASSESSING OFFICER AND THE CIT(APPEALS), THE LD. D.R. SUBMITTE D THAT THE ASSESSING OFFICER FOUND THAT M/S SPLASH MEDIA LTD. IS ONE OF THE PENNY STOCK COMPANIES PROVIDING ACCOMMODATION ENTRI ES. THIS WAS ADMITTED BY SHRI ANUJ AGARWAL DURING THE COURSE OF EXAMINATION. THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEA LS) HAS RIGHTLY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICE R. 3 I.T.A. NO.606/CHNY/19 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE CIT(APPEALS) AS WELL AS THE ASSESSING OFFICER FOUND THAT THE ENTIRE TRANSACTION WAS FRAUDULENTLY MADE BY THE ASSESSEE TO GET ILLEGAL BENEFIT. DURING THE COURSE OF EXAMINATION, SHRI AN UJ AGARWAL ADMITTED THAT M/S SPLASH MEDIA IS ONE OF THE COMPAN IES WHICH PROVIDE ACCOMMODATION ENTRY FOR BOGUS LONG TERM CAP ITAL GAINS. THE ASSESSEE CLAIMS THAT THE SHARES WERE PURCHASED FROM MSE FINANCIAL SERVICES LTD., A REGISTERED STOCK BROKER WITH SEBI. WHEN THE ASSESSEE CLAIMS THAT THE SHARES WERE PURCHASED THROUGH RECOGNIZED STOCK BROKER, IT IS NOT KNOWN HOW THE AS SESSEE ENTERED INTO TRANSACTION FRAUDULENTLY. THE STATEMENT RECOR DED AT KOLKATA AND OTHER MATERIAL RECEIVED FROM KOLKATA INVESTIGAT ION WING WERE NOT FURNISHED TO THE ASSESSEE. THEREFORE, THIS TRI BUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RE-E XAMINED AFTER FURNISHING ALL THE MATERIALS TO THE ASSESSEE. ON I DENTICAL CIRCUMSTANCES, THIS TRIBUNAL IN THE CASE OF KANHAIY ALAL & SONS (HUF) V. ITO IN I.T.A. NO.1849/CHNY/2018, HAS REMIT TED BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR REC ONSIDERATION. IN FACT, THIS TRIBUNAL HAS OBSERVED AT PARA 4 OF ITS O RDER DATED 06.02.2019 AS FOLLOWS:- 4 I.T.A. NO.606/CHNY/19 4. WE HEARD SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE ALSO. ADMITTEDLY, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEES ON THE BASIS OF THE INFORMATION SAID TO BE RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT AT KOLKATA WITH REGARD TO INVESTMENT MADE BY THE ASSESSEES IN THE PENNY STOCK COMPANY. IT IS NOT IN DISPUTE THAT A COPY OF THE INVESTIGATI ON REPORT SAID TO BE RECEIVED FROM KOLKATA WAS NOT FURNISHED TO THE ASSESSEE. MOREOVER, DETAILS OF THE ENQUIRIES SAID TO BE MADE BY THE ASSESSING OFFICER WERE ALSO NOT FURNISHED TO THE ASSESSEES. IN THOSE CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS TO RECONSIDER THE ISSUE AFRESH AFTER FURNISHING THE MATERIAL RELIED UPON BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL BRING ON RECORD THE ROLE OF THE ASSESSEES IN PROMOTING THE COMPANY AND THE RELATIONSHIP OF THE ASSESSEES, IF ANY WITH THE PROMOTERS, ROLE OF THE ASSESSEES IN INFLATING THE PRICE OF SHARES, ETC. THE ASSESSING OFFICER SHALL ALSO FURNISH A COPY OF THE INVESTIGATION REPORT SAID TO BE RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT AT KOLKATA AND OTHER MATERIALS IF ANYTHING IN HIS POSSESSION AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEES. 5. IN VIEW OF THE ABOVE, THE ORDERS OF BOTH THE AUT HORITIES BELOW ARE SET ASIDE AND THE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE- EXAMINE THE 5 I.T.A. NO.606/CHNY/19 MATTER AFTER FURNISHING ALL THE MATERIAL EVIDENCE T O THE ASSESSEE AND THEREAFTER DECIDE THE ISSUE AFRESH AFTER CONSID ERING THE DECISIONS OF THIS TRIBUNAL IN VIJAY KUMAR BAID (HUF ) (SUPRA) AND IN SHRI NIRAV KUMAR MAHINDRA KUMAR SAPANI (SUPRA). 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 4 TH SEPTEMBER, 2019 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED, THE 4 TH SEPTEMBER, 2019 KRI. * (-34 54$- /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. , 6- () /CIT(A)-12, CHENNAI 4. PRINCIPAL CIT-3, CHENNAI 5. 4#7 (- /DR 6. 8' 9 /GF.