Kailashben Chimanbhai Pokal, Surat V. The ITO, Ward-3(3)(10), Ahmedabad

MA 95/AHD/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6613 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-06-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-05-2024
• Assessment Year: 2010-2011
• Appeal Filed On: 08-11-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 69

Judgement Text

MA No.95/Ahd/2023 Assessment Year: 2010-11 Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER M.A. No.95/Ahd/2023 (In ITA No.1681/Ahd/2019) Assessment Year: 2010-11 Kailashben Chimanbhai Pokal, P4-504, Capital Greens, Nr. GD Goenka International School, Canal Road, Vesu, Surat – 395 007. [PAN – ACYPP 7107 P] Vs. The Income Tax Officer, Ward – 3(3)(10), Ahmedabad. (Appellant) (Respondent) Assessee by Shri Vipul Khandhar, AR Revenue by Ms. Saumya Pandey Jain, Sr. DR Da t e o f He a rin g 31.05.2024 Da t e o f P ro n o u n ce m e n t 07.06.2024 O R D E R This Miscellaneous Application is filed by the assessee in respect of order dated 26.05.2023 passed by the Tribunal. 2. The Ld. AR submitted that while passing the order the Tribunal has not considered the fact that the assessee had not been given opportunity of cross- examination of third party on the basis of which addition made for bogus entries in the scrip of Vindus Holding Limited and Concrete Credit Limited. The Assessing Officer has failed to grant cross-examination of the Directors and brokers whose statements were referred by the Directorate of Investigation, Kolkata which is against the principles of natural justice. The Ld. AR further submitted that the Tribunal has also not considered the decision of Hon’ble Gujarat High Court in the case of PCIT vs. Parasben Kasturchand Kochar, (R-Tax Appeal No.204/2020, order dated 17.09.2020) which was later confirmed by the Hon’ble Apex Court. MA No.95/Ahd/2023 Assessment Year: 2010-11 Page 2 of 4 3. The Ld. DR relied upon the order of the Tribunal dated 26.05.2023. 4. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the decision of Hon’ble Gujarat High Court in the case of PCIT vs. Parasben Kasturchand Kochar (supra) was later confirmed by the Hon’ble Supreme Court has not been dealt by the Tribunal and, therefore, to that extent the order is recalled and after confirming the parties relating to the said decision and the contention of the cross-examination of third party not given to the assessee, we are modifying/amending paragraph no.6 of the order dated 26.05.2023 which reads as under :- “6. Heard both the parties and perused all the relevant material available on record. The Assessing Officer has reopened the assessee’s case after the survey was carried out in the premises of Ashok Kumar Kyan, Share Broker in assessee’s case while selling the scrip of Concrete Credit Limited and Vindus Holding Limited Both these shares were purchased by the assessee in cash though the assessee stated that the purchase was made from the original holder Shri Amit Chaurasia as mentioned in each physical share certificate. The said company is provider of services relating to transfer and registration of shares and providing service as Registrars and Share Transfer Agents authorised from SEBI which is Maheshwari Datamatics Pvt. Ltd. and subsequently the Demat holding was also obtained by the assessee. The Ld. AR while dealing with the shares has submitted that the same was sold through Ashok Kumar Kyan who is the very person whose premises were surveyed by the Investigation Wing. Though the assessee was not confronted the same, but was not explained by the assessee as to how the original shares were purchased and the details of Amit Chaurasia was also not given by the assessee while purchasing the shares of these two scrips. This share certificate does not explain as to how Amit Chaurasia, as individual, transported the shares to the assessee in both these scrips. The element of genuineness is in doubt and the Assessing Officer’s observation that the sale of shares purchased MA No.95/Ahd/2023 Assessment Year: 2010-11 Page 3 of 4 from Maheshwari Datamatics Pvt. Ltd. and Stock Holding Corporation of India Limited were fabricated appears to be justifiable with the conduct of the assessee. It is clear that 5000 plus 3000 i.e. 8000 shares of Vindus Holding Limited and Concrete Credit Limited respectively was not purchased from Maheshwari Datamatics Pvt. Ltd. and Stock Holding Corporation of India Limited. However, the same was purchased in earlier years from the original share holders of which the payment was made in cash but not other records were available before the Assessing Officer as well as before the CIT(A) as well as before the Tribunal. When the purchase of shares which was in doubt, as the assessee has not explained the genuineness of the original holder, the same was rightly added under Section 69 as undisclosed investment. The Ld. AR submitted that the assessee had not been given opportunity of cross-examination of third party on the basis of which addition made for bogus entries in the scrip of Vindus Holding Limited and Concrete Credit Limited alongwith cross- examination of the Directors and Brokers whose statements are referred by the Directorate of Investigation, Kolkata will not be the sole criteria for making the addition by the Assessing Officer and in fact the Assessing Officer categorically mentioned in the Assessment Order the sale of shares purchased from Maheshwari Datamatics Pvt. Ltd. and Stock Holding Corporation of India Limited were not genuine and fabricated transaction. In fact, the Assessing Officer has dealt with the assessee’s reply and given finding that the said transaction with Stock Holding Corporation of India Limited & Maheshwari Datamatics Pvt. Ltd. are merely entry providers for which the assessee has not given any explanation to that effect. The very basis of investment through the purchase from Maheshwari Datamatics Pvt. Ltd. & Stock Holding Corporation of India Limited was doubted for which the assessee has not given any explanation either before the Assessing Officer or before the CIT(A). The question of cross- examination as envisaged by the ld. AR will only arise if the Assessment Order was based on the statement of the Directors and Brokers. The basis of assessment is not from the statements of third MA No.95/Ahd/2023 Assessment Year: 2010-11 Page 4 of 4 party but the very purchase and the selling is doubted by the Assessing Officer and the same was observed by the CIT(A) which was not countered by the assessee before both the Authorities. Therefore, the decision of Hon’ble Gujarat High Court in case of PCIT vs. Parasben Kasturchand Kochar (R-Tax Appeal No.204/2020, order dated 17.09.2020) which states that the assessee has Demat account maintained with ICICI Bank has also furnished the details with regard to the shares. This element is missing/absent in the present assessee’s case and, therefore, the decision will not be applicable in the present assessee’s case. Appeal of the assessee is thus dismissed.” 5. In the result, Miscellaneous Application of the assessee is allowed. Order pronounced in the open Court on this 7 th June, 2024. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 7 th June, 2024 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad