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2022 (3) TMI 663 - AT - Income TaxAddition u/s 68 - Bogus share transaction - Assessee has claimed exemption u/s. 10(38) on the huge long term capital gain from the sale of scrip MJTL - HELD THAT:- There is no dispute as far as the claim made by the assessee that assessee has made investment in these shares and subsequently sold the same in the Bombay Stock Exchange through the registered stock broker. It is also fact on record AO and the Ld.CIT(A) has not brought anything on record to link the assessee or his brother in any of the price manipulation taken place in the scrip of MJTL. Even the SEBI has exonerated assessee’s brother and his wife from any of the charges of price manipulation. AO has discussed in detail the price manipulation happened in this scrip and various intermediaries were involved and none of the intermediators were anyway connected with the assessee or his family members directly/indirectly. Even AO proceeded to make investigations with the share broker through whom assessee has made the sales. These statements or any of the statements recorded by Shri Vipul Vidur Bhatt or any of the intermediaries were never shared with the assessee. Even Assessing Officer has not extended the opportunity of cross examination to the assessee. From the assessment record that during the assessment proceedings assessee has raised several contentions vide letter dated 22.12.2017, in the contentions No. 12 and 13 in which assessee has demanded cross examination of persons whose statements have been discussed in foregoing paragraphs. The assessee also submitted that they do not know any of the said persons and never had connections with them. From the above paragraph it can be noticed the Assessing Officer expressed in clear term that that assessee has not utilized the opportunity extended by the Assessing Officer on the summons dated 27.12.2017 issued by him for the purpose of cross examination at his office. The Hon'ble Supreme Court in the case of Andaman Timber Industries v. CCE [2015 (10) TMI 442 - SUPREME COURT] held that when the assessment was made on the basis of the statements recorded from third parties and those statements were not provided nor cross examination was given to the assessee, the Assessment Order made based on those statements is bad in law. Facts and circumstances being identical respectfully following the decision of the Hon'ble Supreme Court, we hold that the assessment order passed u/s. 143(3) of the Act by the Assessing Officer is bad in law and has to be quashed as the Assessing Officer has failed to provide the copies of statements on which he relied on for making assessments and also for not providing cross examination of those persons inspite of specific request made by the assessee. Thus, we quash the assessment orders passed u/s. 143(3) of the Act on this ground. - Appeal of assessee allowed.
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