KISHOR KHIMJI CHHEDA, MUMBAI V. ITO -29(2)(1), MUMBAI

ITA 609/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6042 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 05-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R K GUBGOTRA J
• Keywords: Reopening of assessment; Set aside
• Section: 143(3); 143(1); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER ITA NO.609/MUM/2019 ( ASSESSMENT YEAR: 2009-10) SHRI KISHOR KHIMJI CHHEDA, 10, PUSHPA KUNJ, 2 ND FLOOR, DR. AMBEDKAR ROAD, MULUND (W), MUMBAI-400080. VS. I.T.O.-29(2)(1), ROOM NO. 201, C-10, PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI- 400051. PAN/GIR NO.AAAPC 4412 A (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI KUMAR KALE (ADV) REVENUE BY SHRI R.K. GUBGOTRA (JCIT-DR) DATE OF HEARING 06/02/2020 DATE OF PRONOUNCEMENT 14/02/2020 / O R D E R PER: R.C. SHARMA, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 19/11/2018 OF LD. CIT(A)-40, MUMBAI FOR THE A.Y. 20 09-10 IN THE MATTER OF ORDER PASSED U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). FOLLOWING GROUNDS HAVE BE EN TAKEN BY THE ASSESSEE: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE LD. CIT(A) ERRED IN UPHOLDING LEGAL VALIDITY OF THE REA SSESSMENT PROCEEDINGS EVEN THOUGH THE REOPENING OF THE ASSESS MENT U/S 147 WAS BAD IN LAW AND WITHOUT JURISDICTION, INASMUCH A S THE MANDATE OF SECTION 147 WAS NOT SATISFIED. YOUR APPELLANT, THER EFORE, PRAYS THAT THE ASSESSMENT ORDER DATED 29/12/2016 PASSED U/S 14 3(3) R.W.S. 147 OF THE ACT BE QUASHED. TA NO. 609/MUM/2019 SHRI KISHOR KHIMJI CHHEDA VS ITO 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 1,99 ,800/- MADE BY THE LD. AO AS ALLEGED LOSS BOOKED BY THE APPELLANT BY C LIENT CODE MODIFICATION. YOUR APPELLANT, THEREFORE, PRAYS THAT THE ADDITION OF RS. 1,99,800/- BE DELETED. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. FACTS IN BRIEF ARE THAT THE ASSESSEE HAD FILED HIS RETURN OF INCOME ON 29.06.2009 DECLARING TOTAL INCOME OF RS.3,26,790/-, WHICH WAS PROCESSED U/S. 143(1) OF THE ACT. SCRUTINY ASSESSME NT U/S. 143(3) OF THE ACT WAS COMPLETED IN ASSESSEE'S CASE VIDE ORDER DATED 27.07.2011. SUBSEQUENTLY, A NOTICE U/S. 148 OF TH E ACT WAS ISSUED ON 30.03.2016 BY THE AO REOPENING THE ASSESSMENT. T HE AO ISSUED LETTER DATED 03.11.2016 TO THE ASSESSEE, PROVIDING COPY OF REASONS RECORDED FOR RE-OPENING OF THE ASSESSMENT. THE ASSE SSEE FILED LETTER DATED 15.11.2016 BEFORE THE AO WHEREIN HE RAISED OB JECTIONS AGAINST THE RE-OPENING OF ASSESSMENT. THE AO PASSED ASSESSM ENT ORDER U/S. 143(3) R. W. S. 147 OF THE ACT DATED 29.12.2016, IN WHICH HE REJECTED THE OBJECTIONS RAISED BY THE ASSESSEE. 3. THE ASSESSEE HAS OBJECTED THE REOPENING WHICH WA S DISPOSED OFF BY THE A.O. DURING THE COURSE OF REASSESSMENT P ROCEEDINGS, THE A.O. MADE ADDITION ON ACCOUNT OF CLIENT CODE MODIFI CATION IN TERMS OF INFORMATION RECEIVED FROM DGIT (INV.) MUMBAI. AS PE R THE INFORMATION, THE ASSESSEE WAS FOUND TO BE ONE OF TH E BENEFICIARY OF CLIENT CODE MODIFICATION. AS PER THE REASONS RECORD ED BY THE A.O. WE TA NO. 609/MUM/2019 SHRI KISHOR KHIMJI CHHEDA VS ITO 3 FOUND THAT THERE WAS SUFFICIENT REASON TO BELIEF TH AT THE INCOME TO THE CLIENT CODE MODIFICATION HAS ESCAPED ASSESSMENT. AC CORDINGLY, I UPHOLD THE REOPENING OF ASSESSMENT. 4. WITH REGARD TO MERIT OF ADDITION, I FOUND THAT T HE ASSESSEE HAS ENTERED INTO TRANSACTION ON THE STOCK EXCHANGE. ALL THE TRANSACTIONS ENTERED INTO HAVE BEEN DULY RECORDED IN THE BOOKS OF ACCOUNTS AND ARE SUPPORTED WITH BILLS AND LEDGERS FROM THE STOCK EXCHANGE AND THE BROKER. THE AO DID NOT PROVIDE AN OPPORTUNITY NOR D ID IT CONFIRM WITH THE BROKER REGARDING THE TRANSACTIONS. IT SOLELY RE LIED ON THE INFORMATION FROM THE INVESTIGATION WING. THE NATION AL STOCK EXCHANGE HAS NOT CONFIRMED ANY WRONG DOING IN THE SAID CASE TOO. CLIENT CODE MODIFICATION IS NOT IN THE HANDS OF THE ASSESSEE BU T IT CAN BE DONE ONLY BY THE BROKER. CLIENT CODE MODIFICATION OR REP UNCHING DONE BY THE BROKER WITHOUT PERMISSION OF THE ASSESSEE FOR W HICH THE ASSESSEE SHALL NOT BE RESPONSIBLE. THEREFORE, I DO NOT FIND ANY JUSTIFICATION IN THE ORDER OF THE A.O. FOR MAKING ADDITION WITHOUT C ONFIRMATION FROM THE NATIONAL STOCK EXCHANGE. THEREFORE, IN THE SUBS TANTIAL INTEREST OF JUSTICE, I SET ASIDE THE ORDERS OF THE LOWER AUTHOR ITIES AND RESTORE THE MATTER BACK TO THE A.O. FOR DECIDING AFRESH AFTER P ROVIDING DUE AND EFFECTIVE OPPORTUNITY OF HEARING TO THE ASSESSEE. TA NO. 609/MUM/2019 SHRI KISHOR KHIMJI CHHEDA VS ITO 4 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH FEBRUARY, 2020. SD/- (R.C.SHARMA) ACCOUNTANT MEMBER MUMBAI; DATED 14/02/2020. *RANJAN COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//