RAMESH DEVSHI PATEL, MUMBAI V. INCOME TAX OFFICER-22(2)-2, MUMBAI

ITA 6522/MUM/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8254 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 07-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHAITNYA ANJARIA LD
• Assessee Lawyers: A L SHARMALD
• Keywords: Principle of natural justice; Opportunity of cross examination; Accommodation entries; Set aside
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO.6522/MUM/2017 ASSESSMENT YEAR: 2008-09 RAMESH DEVSHI PATEL F/504, VIKRAM APARTMENTS, NEW MANEKLAL ESTATE, LBS MARG, GHATKOPAR (W), MUMBAI-400 086. PAN: AGXPP0464E VS. I.T.O., 22(2)(2), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI A.L. SHARMA, LD.AR RESPONDENT BY : SHRI CHAITNYA ANJARIA, LD.DR DATE OF HEARING : 1 7 .07.2019 DATE OF PRONOUNCEMENT : 17 - 07 - 2019 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDE R DATED 24.08.2017 PASSED BY LD CIT(A)-25, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2008-09. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ASSESSMENT OF CAPITAL GAIN ARISING ON SALE OF SHARES AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. 2. THE LD A.R SUBMITTED THAT THE ASSESSEE HAS PURCH ASED AND SOLD SHARES THROUGH THE COMPANIES BELONGING TO SHRI MUKESH CHOKSI. THE ASSESSEE DECLARED LONG TERM CAPITAL GAIN OF RS.1,17,644/- ON SALE OF SHARES OF CABLE CORPORATION AND CLAIMED THE SAME AS EXE MPT. THE ASSESSEE ALSO EARNED SHORT TERM CAPITAL GAINS ON SALE OF SHARES OF C & C CORPORATION AND CROMPTON GREAVES LTD TO THE TUNE OF R S.1,01,668/-. THE AO RECEIVED INFORMATION THAT THE MUKESH CHOKSI AND H IS GROUP OF COMPANIES WERE PROVIDING ONLY ACCOMMODATION ENTRIES WITHO UT ACTUAL PURCHASE AND SALE OF SHARES. THIS FACT APPEARS TO HAVE BEEN SO STATED BY SHRI MUKESH CHOKSI IN THE STATEMENT TAKEN FROM HIM DURING THE COURSE OF SEARCH CONDUCTED IN HIS HANDS. ACCORDINGLY, THE AO RE OPENED THE ASSESSMENT OF THE YEAR UNDER CONSIDERATION BY ISSUING NO TICE U/S 148 OF THE ACT. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT BY ASSESSING THE SALE CONSIDERATION OF SHARES CABLE CORPORATION AND SHORT TERM C APITAL GAINS AGGREGATING TO RS.2,25,462/- AS INCOME FROM UNDISCLOSE D SOURCES. THE LD CIT(A) ALSO CONFIRMED THE SAME. 3. THE LD A.R SUBMITTED THAT THE ASSESSING OFFICER HAS PLACED RELIANCE ON THE INFORMATION RECEIVED FROM THE INVESTIGATION WING. HE SUBMITTED THAT THE PURCHASE AND SALE OF SHARES MADE BY THE ASSE SSEE IS DULY SUPPORTED BY PROPER EVIDENCES. FURTHER THE PAYMENTS HAVE BEEN MADE/RECEIVED THROUGH BANKING CHANNELS. ACCORDINGLY HE SUBMITTED THAT THE AO WAS NOT JUSTIFIED IN REJECTING THOSE EVIDENCE S. HE SUBMITTED THAT THE AO HAS MADE THE ADDITION BY PLACING RELIANCE ON THE STATEMENT SO GIVEN BY SHRI MUKESH CHOKSI, WHEN THE EVIDENCES AVAILA BLE WITH THE ASSESSEE IS CONTRARY TO THE STATEMENT SO MADE. ACCORDIN GLY HE SUBMITTED THAT THE ASSESSEE MAY BE PROVIDED WITH AN OPPORTUNITY TO CROSS EXAMINE SHRI MUKESH CHOKSI OR ANY OTHER PERSON WHO HAVE DEPOS ED THAT THESE TRANSACTIONS WERE MERE ACCOMMODATION ENTRIES. 4. I HEARD LD D.R AND PERUSED THE RECORD. I FIND MER IT IN THE CONTENTIONS OF THE ASSESSEE. I AM OF THE VIEW THAT THE AO, IN THE INTEREST OF NATURAL JUSTICE, SHOULD HAVE PROVIDED OPPORTUNITY TO CR OSS EXAMINE SHRI MUKESH CHOKSI OR ANY OTHER PERSON WHO HAS DEPOSE D THAT THE TRANSACTIONS CARRIED OUT BY THEIR GROUP WAS MERE ACCOMMODATION ENTRIES, SINCE IT IS NOT CLEAR AS TO WHETHER THE TRANSACTIONS OF T HE ASSESSEE ARE ALSO COVERED BY THE STATEMENT SO MADE. ACCORDINGLY, I SET ASIDE THE ORDER PASSED BY LD CIT(A) AND RESTORE ALL THE ISSUES TO THE FILE OF THE AO FOR EXAMINING THEM AFRESH AFTER PROVIDING OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 17-07-2019 SD/- ( B.R. BASKARAN) ACCOUNTANT MEMBER MUMBAI, DATED : 17 TH JULY,2019 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. THE CIT 5. THE DR, B BENCH, ITAT, MUMBAI BY ORDER (ASSISTANTREGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI DATE INITIAL WHETHER DICTATION PAD ENCLOSED WITH THE FILE : YES/NO. 1. DRAFT DICTATED ON 17.07.2019 NO SR.PS 2. DRAFT PLACED BEFORE AUTHOR 17.07.2019 MATTER PREPARED BY AM/PENDRIVE P.P SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 17.07.2019 P.P JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 17/7 PP SR.PS 6. DATE OF PRONOUNCEMENT 17/7 SR.PS 7. FILE SENT TO THE BENCH CLERK 18/7 PP SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER