TMI Blog2021 (12) TMI 1078X X X X Extracts X X X X X X X X Extracts X X X X ..... aside the order of the CIT(A), and delete both of the addition made u/s.68 and u/s. 69 - Decided in favour of assessee. - ITA NO. 6387/MUM/2019 - - - Dated:- 23-12-2021 - SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER AND MS. SUCHITRA RAGHUNATH KAMBLE, HON'BLE JUDICIAL MEMBER Assessee by : Shri Vimal Punmiya Department by : Ms. Neha Thakur ORDER PER S. RIFAUR RAHMAN (AM) 1. This appeal is filed by the assessee against order of Learned Commissioner of Income Tax (Appeals) 30, Mumbai [hereinafter in short Ld.CIT(A) ] dated 18.07.2019 for the A.Y.2015-16. 2. Brief facts of the case are that, the assessee is an individual filed his return of income on 24.09.2015 for the A.Y. 2015-16 declaring total income of ₹. Nil/-. The return was processed u/s 143(1) of the Income-tax Act, 1961 (in short Act ). The case was selected for scrutiny under CASS and notice u/s. 143(2) and 142(1) of the Act. Assessing Officer observed that assessee purchased 20000 Equity Shares of each of Premiere Capital Services Ltd in an off market transaction through preferential allotment (@ 75 % per share) with one-year lock in period on 04.09.2012 and lock in release o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 20.04.2020 who is the cousin of the assessee. In the case of Shri Amit Mafatlal Shah the ITAT has passed favorable order and Ld. AR filed the copy of the order and also he filed a comparative chart on facts of the both cases and filed the list of case laws in support of the assessee s case which is reproduced below for the sake of clarity: - Sr.No AMIT MAFATLAL SHAH MUKESH BHOORMAL JAIN 1. Name of Share: Premier Capital Services Ltd Name of Share: Premier Capital Services Ltd 2. Preferential allotment on 04/09/2012 Preferential allotment on 04/09/2012 3. Payment was made through account payee cheque (HDFC Bank) Payment was made through account payee cheque (Bank of Maharashtra) 4. 20,000 Shares allotted 20,000 Shares allotted 5. Demat A/c : Standard Chartered Demat A/c : Unique Stock Bro Pvt Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench following various judicial pronouncements deleted the addition made by the Assessing Officer observing as under: - 12. After examining the facts of the case and the orders of the authorities below, we note that assessee has filed all the necessary evidences as stated above before the AO as well as before the Ld. CIT(A). However, no further enquiry was carried out by the AO or by Ld. CIT(A) but merely relied on the report of the investigation wing and statements of certain individuals recorded during the course of search who have stated that they were engaged in providing accommodation entries for LTCG/LTCL in various shares which are called penny stocks. However, these information were never provided to the assessee. Similarly, no cross examination was allowed by the AO to the assessee during the assessment proceedings. In other words, the AO has merely relied on the investigation report and did not try to collect further evidences by conducting further investigation to prove that the assessee own funds have changed hands. Under these circumstances, we are not in a position to subscribe to the conclusion by the authorities below. The case of the assessee is squarely cove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bogus as assessee converted his own unaccounted money into accounted income and thus made the addition under section 68 of the Act. The Tribunal deleted the addition by observing that D-Mat account and contract notes showed the details of shares, transactions and Revenue stopped enquiry at particular point and did not carry forward it to discharge the basic onus and High Court has upheld the order of ITAT. Ramprasad Agarwal vs. ITO (supra) wherein assessee has produced all the relevant records to show the allotment of shares by the company on payment of consideration by cheque and subsequent dematerialization of shares in the D-mat account. The Tribunal reversed the order of AO wherein the AO has made addition by not allowing cross examination to the assessee and also not providing the information to the assessee which were used against the assessee while making addition.The tribunal followed the decision of coordinate bench in the case of Meghraj Singh Shekhawat Vs DCIT ITA No. 444/JP/2017 AY 2013-14 and 2014- 15 which in turn has followed apex court decision in the case of M/s. Andaman Timber Industries vs. CCE Civil Appeal No.4228 of 2006. In the case of Fara Marker vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the same as gospel truth, had therein drawn adverse inferences in the hands of the assessee by merely referring to the said statement of Sh. Mukesh Choksi (supra). We though do not approve of the reliance placed by the A.O on the stand alone statement of Sh. Mukesh Choksi (supra) for drawing of adverse inferences in respect of the share transactions carried out by the assessee during the year under consideration, but rather find that even no cross examination of Sh. Mukesh Choksi (supra), whose statement was so heavily being relied upon by the A.O, was ever provided to the assessee. We find that the failure on the part of the A.O to provide cross examination of the person, relying on whose statement adverse inferences are drawn in the hands of the assessee goes to the very root of the validity of such adverse inferences drawn in the hands of the assessee, had been looked into by the Hon'ble High Court of Bombay in the case of: CIT-13 Vs. M/s Ashish International (ITA No 4299 P a g e | 26 of 2009; dated. 22.02.2011), wherein the order of the Tribunal was affirmed by the Hon'ble High Court. We thus in the backdrop of our aforesaid observations, are neither able to persuade ..... X X X X Extracts X X X X X X X X Extracts X X X X
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