Smt. KANTA DEVI GARG W/o. SHRI MAHESH GARG, Neemuch V. THE ITO, Neemuch

ITA 696/IND/2014

• Counselvise Citation: 69622714 RSA 2014
• Duration Of Justice: 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 07-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: RAVI SARDA
• Keywords: Income from undisclosed sources; Principle of natural justice; Accommodation entries
• Section: 133A; 234B

Judgement Text

SMT. KANTADEVI GARG ITA NO. 696/IND/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, INDORE SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NO. 696/IND/2014 A.Y. 2006-07 SMT. KANTADEVI GARG NEEMUCH PAN AASPG 08385 ::: APPELLANT VS INCOME TAX OFFICER NEEMUCH ::: RESPONDENT APPELLANT BY SHRI RAVI SARDA RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 15.10.2015 DATE OF PRONOUNCEMENT 2 0 . 10 .2015 O R D E R PER SHRI B.C. MEENA, AM THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LEARNED CIT(A),UJJAIN, DATED 28.8.201 4. THE GROUNDS OF APPEAL READ AS UNDER :- SMT. KANTADEVI GARG ITA NO. 696/IND/2014 2 1. THE CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.8,01,543/- AS INCOME FROM UNDISCLOSED SOURCES ARBITRARILY UNDER PRESUMPTION AND SURMISES. 2. THE LD. CIT(A) HAS ERRED IN CONFIRMING RS.8,01,543/ - NEITHER CONFRONTING THE MATERIAL COLLECTED BEHIND T HE BACK OF THE ASSESSEE NOR ALLOWING CROSS EXAMINATION TO SUCH PERSONS WHICH IS USED AGAINST THE ASSESSEE, ARBITRARILY BY NOT FOLLOWING PRINCIPLES OF NATURAL JUSTICE AND SETTLED PRINCIPLES OF LAW. 3. THE LD. CIT(A) HAS ERRED IN NOT ALLOWING SET OFF OF INCOME SHOWN FOR RS.98,697/- ARBITRARILY. 4. THE LD. CIT(A) HAS ERRED IN CHARGING THE LEVY OF IN TEREST U/S 234B AT RS.1,04,298/-. 5. THE ASSESSMENT ORDER AND THE APPELLATE ORDER IS ARBITRARY AND BAD IN LAW. SMT. KANTADEVI GARG ITA NO. 696/IND/2014 3 2. THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM TRADING IN SHARES. THE RETURN OF INCOME DECLARING INCO ME AT RS.23,820/- WAS FILED ON 3.3.2008. THE ASSESSING OF FICER MADE AN ADDITION OF RS. 8,01,543/- ON ACCOUNT OF INCOM E FROM UNDISCLOSED SOURCES AND RS.98,697/- ON ACCOUNT O F SPECULATION PROFIT. 3. GROUND NO. 5 IS GENERAL IN NATURE AND, THEREFORE, D OES NOT REQUIRE ANY ADJUDICATION. 4. GROUND NO. 4 IS AGAINST CHARGING OF INTEREST U/S 23 4B. ON THIS I HOLD THAT CHARGING OF INTEREST IS MANDATORY AN D CONSEQUENTIAL, THEREFORE, THIS GROUND IS DISMISSED. 5. IN GROUND NOS. 1 AND 2 THE ASSESSEE HAS CHALLENGED THE CONFIRMING ADDITION OF RS.8,01,543/- ON ACCOUNT O F INCOME FROM UNDISCLOSED SOURCES. SMT. KANTADEVI GARG ITA NO. 696/IND/2014 4 6. THE ASSESSEE HAS SHOWN INCOME FROM TRADING IN SHARES AT RS.8,01,543/- AND ALSO SHOWN LOSS IN FUTURES TRADING AT RS.9,53,851/-. THIS TRADING IN FUTURES WAS DONE THROU GH M/S GOLDSTAR FINVEST PVT. LTD. AND M/S MAHASAGAR SECURITIES PRIVATE LIMITED. AS PER THE ASSESSING OFF ICER, THESE COMPANIES WERE EXPELLED FROM MEMBERSHIP OF STO CK EXCHANGE. IN THE STATEMENT RECORDED OF MUKESH M. CHOK SI, IT HAS ADMITTED THAT THESE COMPANIES WERE UTILISED FOR ACCOMMODATION ENTRIES. HOWEVER, THE ASSESSEE WAS NOT PROVIDED PROPER OPPORTUNITY OF CROSS-EXAMINATION OF S HRI MUKESH CHOKSI. NOT PROVIDING OPPORTUNITY TO THE ASSE SSEE TO CROSS-EXAMINE SHRI CHOKSI GOES AGAINST THE PRINCIPL E OF NATURAL JUSTICE. THE ASSESSING OFFICER HAS MADE INVESTIGATION FROM INTERCONNECTED STOCK EXCHANGE INDI A LIMITED, MUMBAI. THE CONTRACT NOTES ISSUED BY M/S GOLDSTAR FINVEST PRIVATE LIMITED ARE FOR THE MONTH OF SMT. KANTADEVI GARG ITA NO. 696/IND/2014 5 JANUARY AND FEBRUARY, 2006. THE ASSESSING OFFICER FOUND FROM THE I.S.E. OF INDIA LIMITED THAT WHILE THE MEMBE RSHIP OF THIS CONCERN WAS CANCELLED ON 21.6.2004 AND THE TRANSACTION HAS NOT DONE THROUGH THIS EXCHANGE. THE CONTACT NOTES ISSUED BY M/S GOLDSTAR FINEST PVT. LTD. AND M/S MAHASAGAR SECUERITIES PRIVATE LIMITED WERE SENT TO EXCHANGE FOR VERIFICATION OF THE TRANSACTION AND IT WAS INFORMED BY EXCHANGE THAT NO SUCH TRANSACTIONS HAVE BEE N CARRIED OUT BY THESE COMPANIES. IT WAS ALSO ESTABLISHED THAT THE REGISTRATION OF M/S GOLDSTAR FINEST PRIVATE LI MITED WAS CANCELLED IN 2004 AND M/S MAHASAGAR SECURITIES PRIVATE LIMITED WAS NEVER A MEMBER OF THIS STOCK EXCHANGE. THE INVESTIGATION WING, MUMBAI, CARRIED OUT SURVEY U/S 133A OF THE ACT IN THE CASE OF M/S MAHASAGA R SECURITIES PVT. LTD. WHOSE DIRECTOR WAS MUKESH M. CH OKSI, WHO HAS ADMITTED THAT HE WAS GIVING ACCOMMODATION SMT. KANTADEVI GARG ITA NO. 696/IND/2014 6 ENTRIES OF LONG TERM CAPITAL GAINS THROUGH THESE COMPAN IES AND THE ASSESSEES NAME WAS IN LIST OF BENEFICIARIES. HOWEVER, THE STATEMENT RECORDED OF MUKESH M. CHOKSI WAS NOT PROVIDED TO THE ASSESSEE AND THE ASSESSEE WAS ALSO NOT PROVIDED AN OPPORTUNITY TO CROSS-EXAMINE MUKESH M. CHOKSI. AFTER HEARING BOTH SIDES AND KEEPING IN VIEW THE PRINCIPLE OF NATURAL JUSTICE, I HOLD THAT THE ASSESSEE MAY BE PROVIDED WITH A COPY OF THE STATEMENT RECORDED OF SH RI MUKESH CHOKSI IF THAT STATEMENT IS MADE BASIS OF ADDITIO N. FURTHER, ASSESSEE SHALL HAVE AN OPTION TO CROSS-EXAMINE SHRI CHOKSI. I WOULD ALSO MAKE IT CLEAR THAT IF DEPARTM ENT IS ABLE TO PROVE THE TRANSACTION BOGUS OR FALSE WITHOUT RELYING ON THE STATEMENT OF SHRI MUKESH CHOKSI THEN THE ASSESSEE SHALL NOT BE ENTITLED TO THE COPY OF STATEMEN T OF SHRI CHOKSI TO CROSS EXAMINE THE SAME. I, THEREFORE, RESTORE SMT. KANTADEVI GARG ITA NO. 696/IND/2014 7 THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DOING THE NEEDFUL. 7. IN THE RESULT, THE APPELLANT STANDS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN OPEN COURT ON 20 TH OCTOBER, 2015 SD (B.C. MEENA) ACCOUNTANT MEMBER 20 TH OCTOBER, 2015 DN/- SMT. KANTADEVI GARG ITA NO. 696/IND/2014 8