Milan S Shah (HUF) , Bangalore V. The Income Tax officer Ward-2(2)(4), Bangalore

ITA 96/BANG/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7737 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 14-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI
• Keywords: Reopening of assessment; Unexplained cash credit; Principle of natural justice; Accommodation entries; Set aside
• Section: 234B; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 96 /BANG/201 9 ASSESSMENT YEAR :20 08 - 09 SHRI MILAN S SHAH (HUF), NO. D-52, LAKSHMAN BUILDING, CHICKPET, BANGALORE 560 053. PAN: AAIHM9439D VS. THE INCOME TAX OFFICER, WARD 2 (2) (4), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SMT. SUMAN LUNKAR, CA RESPONDENT BY : SMT. PADMA MEENAKSHI, JCIT (DR) DATE OF HEARING : 10 .04.201 9 DATE OF PRONOUNCEMENT : 16 .04.201 9 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE ORDER OF LD. CIT(A)-2, BANGALORE DATED 27.11.2018 FOR ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE LEARNED ASSESSING OFFICER HAD ERRED IN PASSING THE ORDER IN THE MANNER PASSED BY HIM AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE SAME. THE ORDERS PASSED ARE BAD IN LAW AND ARE LIABLE TO BE QUASHED. 2.1 IN ANY CASE, THE CONDITIONS PRECEDENT FOR THE ISSUE OF NOTICE U/S. 148 OF THE ACT BEING ABSENT, THE RE-OPENING OF ASSESSMENT BECOMES BAD IN LAW AND CONSEQUENTLY THE ORDER AS PASSED/CONFIRMED BEING ALSO BAD IN LAW IS REQUIRED TO BE QUASHED. 2.2 IN ANY CASE THE ASSESSING OFFICER HAVING NOT COMPLIED WITH LEGAL PROVISIONS 1 PROCEDURE FOR REOPENING / REASSESSMENT, THE CONSEQUENTIAL ORDER BECOMES BAD IN LAW AND LIABLE TO BE QUASHED. 3.1 IN ANY CASE THE ORDER PASSED IN GROSS VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE AND FAIR PLAY, ESPECIALLY IN THE ABSENCE OF THE CROSS EXAMINATIONS OF THE PERSONS WHOSE AVERMENTS ARE SOUGHT TO BE RELIED ITA NO.96/BANG/2019 PAGE 2 OF 4 UPON BY THE ASSESSING OFFICER WHILE PASSING THE ORDER, MAKES THE ORDER TOTALLY BAD IN LAW AND LIABLE TO BE CANCELLED. 3.2 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS INSTEAD OF QUASHING THE IMPUGNED ORDER, HAS JUST CONFIRMED THE ORDER OF ASSESSING OFFICER WITHOUT PROPERLY CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, ARGUMENTS OF THE APPELLANT AND THE LAW APPLICABLE. 4. THE ASSESSING OFFICER HAD IN ANY CASE, ERRED IN TREATING A SUM OF RS. 4,35,130/- BEING CONSIDERATION RECEIVED ON SALE OF SHARES AS 'INCOME FROM OTHER SOURCES' AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE SAME. THE ACTION OF AUTHORITIES BELOW HAS NO SUPPORT IN LAW; IS CONTRARY TO FACT') AND EVIDENCE AVAILABLE AND THEREFORE DESERVES TO BE REJECTED. 5. IN ANY CASE AND WITHOUT FURTHER PREJUDICE, THE AUTHORITIES BELOW HAVE ERRED IN: A) TAXING/ CONFIRMING THE ENTIRE CONSIDERATION RECEIVED ON SALE OF SHARES AS UNEXPLAINED CASH CREDIT UNDER THE HEAD OTHER SOURCES. B) HOLDING WITHOUT BASIS THAT THE TRANSACTIONS IN SHARES ARE FRAUDULENT C) ALLEGING WITHOUT ANY BASIS THAT THE APPELLANT HAS OBTAINED ACCOMMODATION ENTRIES AND APPELLANT'S OWN MONEY COME BACK IN THE GUISE OF CAPITAL GAINS. THE CONCLUSIONS I OBSERVATIONS OF AUTHORITIES BELOW BEING TOTALLY ERRONEOUS AND WITHOUT BASIS BOTH ON FACTS AND LAW IS TO BE DISREGARDED. 6. THE APPELLANT DENIES THE LIABILITY TO PAY INTEREST U/S. 234B AND 234C. THE INTEREST HAVING BEEN LEVIED ERRONEOUSLY IS TO BE DELETED. 7. IN VIEW OF THE ABOVE AND OTHER GROUNDS TO BE ADDUCED AT THE TIME OF HEARING, IT IS REQUESTED THAT THE IMPUGNED ORDER BE QUASHED OR AT LEAST THE INCOME FROM SHORT TERM CAPITAL GAIN EARNED ON SALE OF SHARES AS RETURNED BY THE APPELLANT BE ACCEPTED, THE ASSESSMENT OF CONSIDERATION RECEIVED ON SALE OF SHARES AS UNEXPLAINED CASH CREDIT UNDER THE HEAD INCOME FROM OTHER SOURCES BE DELETED AND THE INTEREST LEVIED BE ALSO DELETED. 3. BOTH SIDES WERE HEARD AND IT WAS NOTED THAT IN THIS CASE, THE ISSUE WAS DECIDED AGAINST THE ASSESSEE ON THE BASIS OF THE STATEMENT OF SHRI MUKESHCHOKSI, KEY PERSON OF M/S. MAHASAGAR GROUP OF CASES AS PER WHICH IT WAS STATED BY HIM THAT HE IS PROVIDING ACCOMMODATION ENTRIES AND IT IS NOTED BY THE AO IN THE ASSESSMENT ORDER THAT THE ASSESSEE IS ONE OF THE ITA NO.96/BANG/2019 PAGE 3 OF 4 BENEFICIARIES OF SUCH ACCOMMODATION ENTRIES. THIS TRIBUNAL IS TAKING A CONSISTENT VIEW TO RESTORE THE MATTER BACK TO THE AO BY FOLLOWING THE TRIBUNAL ORDER RENDERED IN THE CASE OF SHRI MUKESH KUMAR SOLANKI VS. ITO IN ITA NO. 2168/BANG/2016 DATED 17.03.2017, IN WHICH THE TRIBUNAL HAS RESTORED THE MATTER BACK TO THE FILE OF AO FOR FRESH DECISION WITH THE SAME DIRECTIONS AS WERE GIVEN BY HON'BLE KARNATAKA HIGH COURT IN A JUDGMENT RENDERED IN THE CASE OF CHANDRA DEVI KOTHARI IN WRIT PETITION NO. 39370/2014 DATED 02.02.2015.THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I REPRODUCE PARAS 5 AND 6 OF THIS TRIBUNAL ORDER RENDERED IN THE CASE OF SHRI MUKESH KUMAR SOLANKI VS. ITO(SUPRA). THE SAME READ UNDER. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FIRST OF ALL, I REPRODUCE PARA NO.8 OF THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF M/S CHANDRA DEVI KOTHARI (SUPRA) AND THIS IS AS UNDER:- 8. IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES AS ADVERTED TO ABOVE, AND AS THE PETITIONER HAS BEEN DENIED AN OPPORTUNITY OF FAIR HEARING BY PROVIDING COPY OF THE STATEMENT AND RELATED DETAILS REGARDING THE ALLEGED SHARE AMOUNT, I AM OF THE VIEW THAT THE MATTER REQUIRES TO BE RE- CONSIDERED BY THE RESPONDENT BY PROVIDING FAIR AND REASONABLE OPPORTUNITY OF HEARING TO THE PETITIONER AND BY FURNISHING THE DETAILS/COPY OF THE STATEMENT BASED ON WHICH THE IMPUGNED ASSESSMENT ORDER HAS BEEN PASSED.' 6. FROM THE ABOVE PARA FROM THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT, IT IS SEEN THAT MATTER WAS RESTORED BACK TO THE FILE OF THE AO FOR FRESH DECISION AFTER PROVIDING COPY OF THE STATEMENT OFSHRIMUKESHCHOKSI. AS PER THE FACTS NOTED BY THE HIGH COURT IN THE EARLIER PARAS OF JUDGMENT AND AS PER THE FACTS OF THE PRESENT CASE, I FIND THAT THE FACTS ARE SIMILAR AND LD DR OF THE REVENUE ALSO COULD NOT POINT OUT ANY DIFFERENCE IN FACTS AND HENCE, BY RESPECTFULLY FOLLOWING THIS JUDGMENT OF KARNATAKA HIGH COURT, I SET ASIDE THE ORDER OF LD CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE AO FOR FRESH DECISION WITH THE SAME DIRECTIONS AS WERE GIVEN BY THE HON'BLE KARNATAKA HIGH COURT IN THE CASE AS PER PARA NO.8 OF THE JUDGMENT REPRODUCED ABOVE. IN VIEW OF THIS DECISION, NO ADJUDICATION IS CALLED FOR AT THIS STAGE REGARDING THE MERIT OF THE ADDITION. ITA NO.96/BANG/2019 PAGE 4 OF 4 5. RESPECTFULLY FOLLOWING THIS TRIBUNAL ORDER AND IN TURN FOLLOWING THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF CHANDRA DEVI KOTHARI (SUPRA), I DECIDE THIS ISSUE IN THE PRESENT CASE ALSO ON SIMILAR LINE AND RESTORE THIS MATTER BACK TO THE FILE OF AO FOR FRESH DECISION WITH THE SAME DIRECTIONS AS WERE GIVEN BY HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CHANDRA DEVI KOTHARI(SUPRA) AS PER PARA 8 OF THE JUDGMENT WHICH IS REPRODUCED ABOVE.IN VIEW OF THIS DECISION, NO ADJUDICATION IS CALLED FOR REGARDING MERIT OF THE ADDITION AT THIS STAGE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 16 TH APRIL, 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.