JAY HANSRAJ CHHEDA, MUMBAI V. ITO - 19(2)(1), MUMBAI, MUMBAI

ITA 6444/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6275 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2015-2016
• Appeal Filed On: 09-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Opportunity of cross examination; Accommodation entries; Set aside; Bogus
• Section: 201; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI AMARJIT SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL , AM / I.T.A. NO. 6444 /MUM/201 9 ( / ASSESSMENT YEAR: 20 1 5 - 1 6 ) JAY HANSRAJ CHHEDA ROOM NO.61, 4 TH FLOOR, VASANT VILLA, BEHNAMA HALL LANE PRARTHNA SAMAJ, MUMBAI - 400006. / VS. ITO, WARD - 19(2)(1) MATRU MANDIR, ROOM NO.221, TARDEO ROAD, MUMBAI - 400007. ./ ./ PAN/GIR NO. : AJLPC9910H ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 28 / 07 /202 1 /DATE OF PRONOUNCEMENT: 03 /09 /2021 / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 26 .0 7 . 201 9 PASSED BY THE COMMISS IONER OF INCOME TAX (APPEALS) - 30 , MUMBAI (HEREINAFTER REFERRED TO AS THE CIT( A)) RELEVANT TO THE A.Y.20 15 - 1 6 . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. IN LAW AND ON FACTS AS WELL AS IN CIRCUMSTANCES OF THE APPELLANTS CASE, THE COMMISSIONER OF INCOME TAX (APPEALS) - 30 HAS ERRED IN NOT QUASHING THE ORDER PASSED BY THE AO. 2. THE LEARNED CIT(A) - 30 HAS ERRED IN UPHOLDING T HAT THE LTCG DISCLOSED ARE NOT GENUINE AND REPRESENT UNDISCLOSED INCOME OF THE ASSESSEE BY : SHRI MANOJ PANDIT REVENUE BY: MS . USHA GAIKWAD ( D R) ITA NO. 6444 /M UM /201 9 A.Y.20 1 5 - 1 6 2 APPELLANT AND THAT HE HAS RESORTED TO PREARRANGED METHOD TO EVADE TAXES THROUGH LTCG, ALTHOUGH THE APPELLANT HAS SUBMITTED ALL THE RELEVANT DOCUMENTS TO SHOW THAT THE PURCHASE AND SALE OF SHARES WERE GENUINE TRANSACTIONS. 3. THE LD. CIT(A) - 30 ERRED IN CONFIRMING THAT THE APPELLANT HAS INDULGED IN BOGUS TRANSACTIONS BY INDULGING IN PENNY STOCK SHARES OF M/S. PINE ANIMATION LIMITED. 4. THE LEARNED CIT(A) - 30 HAS ERRED IN NOT OBSERV ING THAT THE LD. AO HAS MADE THE ADDITION ONLY ON THE BASIS OF THE INFORMATION RECEIVED FROM KOLKATA WING (WHICH SPELLS OUT THE MODUS OPERANDI), ALTHOUGH THE AO HAS NOT BROUGHT ANY MATERIAL/EVIDENCE TO PROVE THAT THE APPELLANT IN SPECIFIC, HAS INDULGED IN ANY BOGUS TRANSACTION, OF WHATSOEVER NATURE. 5. THE LEARNED CIT(A) - 30 ERRED IN CONFIRMING THE FOLLOWING ALLEGATIONS LEVELED BY LD. AO WITHOUT PROVIDING ANY OPPORTUNITY OF CROSS EXAMINATION TO YOUR APPELLANT. (A) THE APPELLANT HAS INDULGED IN ACCOMMODATION ENTRIES AND HAS CONVERTED HIS CASH AND CLAIMED A LTCG (EXEMPT FROM TAX). (B) SHARES OF M/S. PINE ANIMATION LTD ARE IN NATURE OF PENNY STOCK AND HAS WRONGLY RELIED ON IMPUGNED STATEMENT OF BROKERS, DEALERS AND DUMMY DIRECTORS. 6. THE LD. CIT(A) - 30 HAS ERRED IN CONFIRMING THE ERRONEOUS CONCLUSION OF THE LD. AO THAT THE SOURCE OF CASH DEPOSITS IS NOT ESTABLISHED AND THAT THE DOCUMENTS SHOWING THE GENUINENESS OF TRANSACTIONS IE. CASH ACCOUNT, BANK ACCOUNT, PURCHASES & SALES ACCOUNTS BEING ON RECORD HAS BEEN IGN ORED AND FORMED OPINION TO CONCLUDE THAT ASSESSEE HAS INDULGED IN PENNY STOCK TRANSACTIONS AND IS INELIGIBLE FOR EXEMPTION FOR LTCG UNDER THE INCOME TAX ACT, 1961. ITA NO. 6444 /M UM /201 9 A.Y.20 1 5 - 1 6 3 7. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT CASE, THE LEARNED CIT(A) - 30 HA S GROSSLY ERRED IN CONCLUDED THAT THE LD. AO HAS RIGHTLY MADE THE ADDITIONS IN THE RETURNED INCOME OF THE APPELLANT. 3 . WE HAVE HEARD THE ARGUMENT S ADVANCED BY THE LD. REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD . THE LD. REPRESENTATIVE OF THE AS SESSEE HAS ARGUED THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY IN ABSENCE OF THE ASSESSEE AND WITHOUT GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH LAW, T HEREFORE, THE FINDING OF THE CIT(A) IS NOT JUSTIFIABLE, HENCE, IS L IABLE TO BE SET ASIDE IN THE INTEREST OF JUSTICE. HOWEVER, THE LD. REPRESENTATIVE OF THE DEPARTMENT HAS REFUTED THE SAID CONTENTION. ON APPRAISAL OF THE O RDER OF THE CIT(A) DATED 26 .0 7 .201 9 PASSED BY THE CIT(A) , WE FIND THAT THE CIT(A) HAS DECIDED THE MATT ER OF CONTROVERSY IN ABSENCE OF THE ASSESSEE /REPRESENTATIVE OF THE A SSESSEE WITHOUT GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE ACCORDANCE WITH LAW . A PROPER AND REASONABLE OPPORTUNITY IS REQUIRED TO BE GIVEN TO THE ASSESSEE BEFORE THE DEC IDING THE MATTER OF CONTROVERSY IN ACCORDANCE WITH LAW . 4 . FOR THIS PROPOSITION WE PLACE RELIANCE UPON THE FOLLOWING CASE LAWS. ( 1 ) CIT VS. PREMKUMAR ARJUNDAS LUTHRA (HUF) (2017) 154 DTR (BOM) 302 ( 2 ) CIT VS. S CHENNIAPPA MUDALIAR (1969) 74 ITR 1 (SC) 5 . ACCORDIN GLY IN THE INTEREST OF JUSTICE , WE REMIT THE ISSUE RAISED IN THE APPEAL TO THE FILE OF THE LD. CIT(A). LD. CIT(A) IS DIRECTED TO CONSIDER THE ISSUE AFRESH AND PASS AN ORDER ON THE MERITS OF THE CASE AFTER GIVING AFTER GIVING A PROPER OPPORTUNITY OF BEING H EARD TO THE ASSESSEE IN ACCORDANCE WITH LAW . THEREFORE, IN THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ITA NO. 6444 /M UM /201 9 A.Y.20 1 5 - 1 6 4 ORDER OF THE CIT(A) IS NOT LIABLE TO BE SUSTAINABLE IN THE EYES OF LAW, THEREFORE, WE SET ASIDE THE FINDING OF THE CIT(A ) ON ALL THE ISSUES AND R ESTORE THE MATTER BEFORE THE CIT(A) TO DECIDE THE MATTER AFRESH BY GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH LAW. 6 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ALLOWED FOR STATISTICAL PURPOSE S . ORDER PRONOUNCE D IN THE OPEN COURT ON 03 / 09 /202 1 SD/ - SD/ - ( MANOJ KUMAR AGGARWAL ) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : 03 / 09 /202 1 VIJAY PAL SINGH (SR. PS) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRU E COPY// / /(DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI