TMI Blog2016 (8) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... lly complied with the directions given by the ld. CIT(A) as per page No.11 & 12 of the paper book. Thus we hold that the ld.CIT(A) has passed a well reasoned speaking order and no new circumstances of facts have been brought before us to deviate from or to interfere into well a reasoned and judicious findings recorded by the ld. CIT(A). - Decided against revenue - ITA No.4209(Mum) 2014 - - - Dated:- 10-8-2016 - SHRI JASON P BOAZ, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER Assessee by : Shri Neil Philip Revenue by : Shri D.C.Saboo O R D E R PER SHRI SANDEEP GOSAIN, JUDICIAL MEMBER The present appeal has been filed by the revenue against the order of CIT(A)-28,Mumbai dated 27-03-2014 in Appeal No.CIT(A)- 28/ITO.26(2)(2)/417/10-11 for the assessment year : 2003-04 on the following grounds; 1. Whether on the facts and in the circumstances of the case and in law, the CIT(A) erred in law in deleting the addition of ₹ 43,52,980/- by holding that the assessee was not granted the opportunity of cross examination of Shri Mukesh Choksi, Managing Director of Mahanagar Securities Pvt.Ltd. without appreciating that the powers of CIT(A) are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The AO held that the amount of ₹ 43,52,980/- to be assessee s income from undisclosed sources and therefore, added the same to the total income of the assessee vide order of assessment dated 29-12-2010. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A) and the CIT(A) after considering the case of both the parties, partly allowed the appeal; filed by the assessee and deleted the additions of ₹ 43,52,980/- and treated the profit on the sale of shares to be long term capital gains vide order dated 27-03-2014. 4. Aggrieved by the order of the ld. CIT(A) the revenue preferred the present appeal before us on the grounds mentioned above. ] 5. Ground nos.5 6 are general in nature and it does not require any specific adjudication. 6. Ground nos. 1 to 4 in this appeal are inter-connected and inter- related therefore, we deem it proper to adjudicate these grounds together. These grounds of appeal of the revenue relates to the issue of deleting the addition of ₹ 43,52,980/- made under the head Income from other sources . 7. We have heard the counsel for both the parties and we have also perused the material placed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crips of Buniyad Chemicals.' It is alleged that since the shares were stated to be financed out of speculative profits and the assessee did not pay for these shares separately, the purchase is doubtful. This and the discrepancy pointed out in para 2.1 and para 3 regarding the number of scrips sold leading 10 share profit of ₹ 1,67,3301-, has been clarified satisfactorily by the AR in rejoinder dated 22/03/2014 that there is no real difference . and the confusion is only due to poor drafting. With respect to the discrepancy pointed out by the. AO in para 3. l, para 6, 6.1 and para 6.2 regarding the market rates of scrips bought and sold being very different from what is shown in the bills submitted by the appellant, it is seen that these bills leading to share profits relate to AY 2002-03 and not to the year under consideration. Accordingly, the effect of the discrepancies has to be considered in AY 2002-03 only, for which the AO is 'free to t e-necessary action as per law. The contention of the AO in the concluding paragraph to enhance the income of the assessee for AY 2002-03 by ₹ 33,732 for unexplained investment in shares of Buniyad Chemicals . It is alleged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings nor during remand proceedings. From the assessment order it is seen that the basic 'and sole reason for initiation assessment proceedings and the completion of assessmenttreating the long-term gain as undisclosed income under section 69A, was the statement of Shri Chokshi only. No independent inquiry seems to have been done by the Assessing Officer to verify whether the statement of Mukesh Chokshi admitting to issuing bogus bills, was correct in the case of the assessee or not, especially when the assessee had vehemently denied the same during assessment proceedings and had submitted relevant details and bills. In the light of these facts, the allegation of the appellant that the Assessing Officer has approached the issue with a predetermined mind has some force. Further when the Assessing Officer was solely basing his decision on the statement or Shri Mukesh Chokshi, which the assessee had denied/contested during assessment proceedings, it was incumbent on the Assessing Officer to have provided a copy or that statement to the assessee and to have provided him an opportunity for cross-examination, before arriving at a decision. It is undisputed that the copy. of stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgument the ld. DR argued that the CIT(A) had erred in law in deleting the additions by holding that the assessee was not granted the opportunity of cross examination of Shri Mukesh Choksi, MD of M/s Mahasagar Securities Pvt. Ltd., without appreciating that the powers of ld. CIT(A) are co-terminus with the powers of AO and hence the CIT(A) could have given the opportunity of cross examination of Shri Mukesh Choksi to the assessee instead of pointing out the lacunae in the remand report of the AO and then making the same basis for deletion. The ld. DR in order to support his arguments had relied upon the decision in the case of CIT Vs Kanpur Coal Syndicate (53 ITR 225(SC) (1964) Jute Corpn.of India Ltd Vs CIT (53 Taxmann 85 (SC)(1990) CIT Vs K.S.Dattreya (197 Taxmann 151 (Kar) (2011). The ld.DR further argued that the CIT(A) has not appreciated the findings of AO s remand report as well as the DDIT(Inv.) and has only considered the discrepancies and shortcomings pointed out by the AO in remand report for unexplained investments in purchase of shares of M/s Buniyad Chemicals Ltd., 9. On the other hand, ld. AR appearing on behalf of the assessee relied upon the orders passed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the lower authorities and after considering the same, we have observed that the co-ordinate Bench of ITAT Mumbai has already dealt with the similar issue in ITA No. 1175/Mum/2012 and ITA No. 1176/Mum/2012 where in also the assessee s in those cases have dealt with the share transaction with the same companies. We referred the operative para of ITA No. 1175/Mum/2012 titled Smt. Durgadevi Mudra vs. ITO and the same is reproduced here in below: I have heard the parties and perused the record. The Ld. Counsel submits that in respect of the 'Shares Scam' alleged to be involved by Shri Mukesh Chokshi actions were taken against many persons disallowing their claim in respect of long-term capital gain and short term capital gain. He submits that on identical set of facts the issue has been considered by the Tribunal. The Ld. Counsel filed the copies of the Tribunal decision by way of compilation as under: i) Mukesh R. Marolia vs. Addl. CIT -6 SOT 247 ii) Rajnudevi Chowdhary vs. ITO -ITA 6455/M/2007(Bom) iii) ITO vs. Truptic Shah -ITA 6455/M/2007(Bom) iv) Chandrakant Babulal Shah -ITA 6108/M/2009(Bom) v) ACIT vs. Shri Ravindrakumar Thshinwal -ITA5302/M/2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interconnected stock exchange/ NSC. Most of the enquiries pertains to the transactions in interconnected stock exchange and sale of shares In the company viz., Rashel Agro Tech Ltd. The enquiry in the said group of companies was with reference. to the issuance of bogus , purchase and sale bills and accommodating various parties in earning the capital gains. However, as submitted by the learned Counsel, the assessee's name is not figuring in the transactions which were originally enquired by the DDIT (Inv.) on 26-4-2002. Even though the modus operandi was explained and stated that they were getting 0.5% commission in arranging the transactions, nothing was concluded against the assessee in the said statement. The Assessing Officer in the course of assessment again recorded the statement under section 131 on 9-11-2006 in which question No. 4 and 5 which are extracted in the assessment order itself. The main reliance is on question No. 5 which is as under: Q.5 : Please give the details of bills of profit issued by your company as stated above. Ans: These bills numbers Bills No. CC/2000/16/12501 dt.18-4-2000 which shows that B.87610.85 payable to Shri Chandrakant D. shah. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings of the' Assessing Officer and also the findings of the CIT (A). In fact, the CIT (A) has went ahead in treating the entire transaction as bogus and confirmed the action of the Assessing Officer while holding this will be more for an unexplained receipt of money of the appellant. Hence, Assessing Officer had rightly added the amount by and the action of the Assessing Officer in making this addition is confirmed treating it as STCG)). In arriving at this conclusion, the CIT (A) presumed that assessee could have paid full payment of 16 lakhs by way of cash which was not the case of the Assessing Officer either. There is no evidence even to presume these observations of the CIT (A) as stated above. 7. The facts are identical in this case as in the case of Chandrakant Babulal shah (supra). I hold that the assessee has proved the genuineness of the share transactions and there is no justification to disallow the claim of the assessee in respect of the long-term capital gain. I, accordingly, direct the A.O. to allow the same. Accordingly, ground no.2 is allowed. Assessee's appeal is partly allowed. In addition we have also analyse the orders passed in ITA No. 117 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to give any satisfactory reply as to why the AO has not complied with specific direction for allowing the assessee to cross examine such person as per directions given at page no.11 12 of paper book. After conjoint reading of the orders passed by the CIT(A) in the present case as well as the earlier orders by the Hon ble ITAT, Mumbai Bench in similar case and an after taking into consideration the documents relied upon by the assessee, we are of the considered view that the ld. CIT(A) has rightly pointed out that the assessment order is single page cryptic order in which the addition of ₹ 43,52,980/- has been made to the returned income, which is primarily based on the solitary statement of Shri Mukesh Choksi recorded by the DDIT(Inv.)(1)(4), Mumbai. The led. CIT(A) has also rightly considered the factual position of the present case, wherein no independent enquiry has been done by the AO to verify whether the statement of Shri Mukesh Choksi admitting to issuing bogus bills was correct in the case of assessee or not by providing an opportunity of cross examination to the assessee of such person and therefore, in such circumstances in the present case, the statement of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
