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2023 (11) TMI 939 - AT - Income TaxValidity of assessment u/s 153A - date of expiry of time limit for issuance of notice under section 143 (2) - HELD THAT:- We hold that assessment year 2010 – 11 to assessment year 2014 – 15 are unabated assessment years, which has been disturbed by the learned assessing officer, based on the incriminating material found during the course of search. For all these unabated assessment years, the addition is made with respect to the undisclosed income, income from house property and bogus long-term capital gain which are all based on the independent incriminating material found during the course of search relevant to those assessment years. Assessment year 2015 – 16 is not a concluded assessment year and therefore shall abate and assessing officer can make addition even in absence of incriminating material found during the course of search. Accordingly, we dismiss ground no 1 of the appeal. No notice u/s 143 (2) was issued by the new incumbent AO i.e. Deputy Commissioner of Income Tax Central Circle – 5 (2) within the permitted time - transfer u/s 127 - HELD THAT:- No provision of law was shown to us by the learned authorized representative. We drew attention of the learned authorized representative to the provisions of section 129 of the income tax act which provided that Whenever in respect of any proceeding under this Act an income-tax authority ceases to exercise jurisdiction and is succeeded by another who has and exercises jurisdiction, the income-tax authority so succeeding may continue the proceeding from the stage at which the proceeding was left by his predecessor. AR referred to his written submission and the various judicial precedents cited. We find that the provisions of section 129 of the act is clear in this case and there is no scope for taking the interpretation as pointed out before us by the learned authorized representative. It is not the case of the assessee that he has not been heard by the new incumbent prior to making the assessment order. Therefore, the argument of the learned authorized representative is in clear violation of the provisions of section 129 of the income tax act and therefore it is dismissed. Accordingly, ground number 5 of the appeal is dismissed. Levy of interest u/s 234B - claim of the learned authorized representative is that no continuity of hearing was given by the assessing officer before the levy of interest and no interest can be levied in special assessment proceedings u/s 153A - HELD THAT:- Levy of interest u/s 234B of the income tax act is chargeable in special assessment under section 153A of the act, as no judicial precedents are shown that in such proceedings, no interest is chargeable. There is no provision in the income tax act to grant an opportunity of hearing before charging of interest u/s 234B of the income tax act. It is not the case of the assessee that no interest can be charged under section 234B of the income tax act or no opportunity is given for hearing during assessment proceedings. Accordingly, ground of the appeal of the assessee is dismissed. Determination of the total income - argument of the assessee is that assessee was assessed at ₹ 335,486,417/– against the returned income of ₹ 24,438,590 by making an addition of ₹ 311,047,827 - HELD THAT:- We find that this ground is general, no arguments were advanced by the learned authorized representative, and hence, it is dismissed. Violation of the natural justice - No summons under section 131 or notices under section 133 (6) to the various parties whose statements have been relied upon issued - addition with respect to the denial of exemption u/s10 (38) of the act has been denied on the stated statement of Mr. Vipul Bhatt who has retracted the statement, therefore such statement cannot be relied upon - AO has also relied upon the appraisal report for making an addition and that too without making any enquiry whatsoever to ascertain the reliability or veracity of such a report and to examine the evidences produced by the assessee. The copy of the appraisal report was not furnished to the assessee in spite of the specific request made - HELD THAT:- With respect to the claim of the assessee that assessee requested for issue of summons under section 131 or notices under section 133 (6) to the various parties whose statements have been relied upon by the learned assessing officer, fact clearly shows that the assessing officer has referred to the statement of Mr. Bhatt, which was in the knowledge of the assessee. Therefore, the assessee produced the retraction statement and affidavit of the same person. Therefore so far as the cross examination of Mr. Bhatt is concerned, when assessee is aware about his retraction statement and his statement originally given implicating the assessee, the assessee could have himself produced Mr. Bhatt. Even otherwise, there is a statement recorded of that person during the course of assessment proceedings, which is also known to the assessee. The assessee does not make any request for cross-examination when his statement was recorded. Later on assessee makes a request for his cross-examination. Therefore there is no violation of principle of natural justice in not giving the cross examination of Mr. Vipul Bhatt. There is no provision in the income tax act to give an internal communication to the assessee such as appraisal report. Therefore, we reject this argument also. However while deciding the issue on the merits of the case; we will deal the same once again. Accordingly ground of the appeal to that extent stated above, is dismissed. Addition of annual value with respect to the house properties - HELD THAT:- As there is no change in the facts and circumstances of the case of the assessee and the daughter of the assessee except the amount of taxation determined with respect to each of the property, we following the decision in case of Mrs. Priya Gurnani [2023 (11) TMI 822 - ITAT MUMBAI] direct the learned assessing officer to grant deduction of standard deduction at the rate of 30% of annual value under section 24 of the act and upheld the action of the learned assessing officer in taxing the income of the above properties on all other issues Bogus LTCG - Addition u/s 68 on account of sale proceeds of shares - Exemption claimed u/s 10(38) denied - statement given by the accommodation entry provider and his retraction later on - HELD THAT:- We find that identical issue has been dealt with by the coordinate bench in case of the daughter of the assessee Mrs. Priya Gurnani [2023 (11) TMI 822 - ITAT MUMBAI] set-aside ground of the appeal back to the file of the learned assessing officer with a direction to the assessee to show the genuineness of the trade and unsecured loan with respect to the documents found as stated in the statement of various parties, exit entry providers details, Demat agencies and the cash trail found. It is also the duty of the assessee to produce before the AO of her chartered accountant (who statement is not retracted), Ms. Rukhsana who is stated to have been involved in transferring the cash for the long-term capital gain and conversion of loan entries, for further examination. It is also the duty of assessee to produce Mr. Vipul Bhatt before the ld AO to be examined specifically with respect to documents in annexure 1 to 17 , his each of the reference in 90 questions referring to Moraj Group. The learned assessing officer on appraisal of all the details furnished by the assessee may carry out further enquiry with respect to the observation made above and decide the issue afresh considering the standard operating procedure of investigation of penny stock. The LD AO may also consider the inquiry pending before him from BSE etc. LD AO may carry out the inquiries with respect to exit providers looking at date and time stamp of trades executed and sources of the fund of the exit providers tearing the layering where it is stated that in some of the case funds are out of RTGS made by assessee for repayment of loan.
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