TMI Blog2022 (4) TMI 893X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Chandra Devi Kothari [ 2015 (2) TMI 1313 - KARNATAKA HIGH COURT] and the order of co-ordinate bench of ITAT, Bangalore in the case of Shri Suresh J. Kothari (HUF) [ 2019 (7) TMI 1918 - ITAT BANGALORE] we set aside the impugned order passed by Ld. CIT(A) and Ld. AO and restore the matter back to the file of the Ld. AO with the direction to comply with the mandatory statutory requirements of section 142(3) of the Act failing which may vitiate the assessment itself. AO has to reconsider the issue afresh after furnishing to the assessee all the material relied upon by him/her while passing the assessment order. Appeal of the assessee is allowed for statistical purpose - I.T.A. Nos. 1903 And 1904 to 1907/Chny/2019 And I.T.A No. 1970/Chny/2018 - - - Dated:- 31-3-2022 - Shri Mahavir Singh, Hon ble Vice President And Shri Girish Agrawal, Hon ble Accountant Member For the Appellant : Mr. D. Anand, Advocate For the Respondent : Mr. G. Johnson, Addl.CIT ORDER PER GIRISH AGRAWAL, ACCOUNTANT MEMBER : All the above captioned six appeals preferred by respective assessees against the separate orders of Commissioner of Income-tax (Appeals) 2, Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese grounds and such other ground that maybe adduced before or during the hearing of the appeal with the leave of this respectful authority, may be pleased to (a) Allow the exemption U/s. 10(38) of the I.T. Act, 1961 on the Long Term Capital Gains on sale of shares having sales consideration of ₹ 24,82,748/-; OR (b) Pass such other orders as this respectful authority may deem fit. 4. Similar grounds are raised in ITA No. 1970/Chny/2018 which are reproduced for ease of reference 1. The order of the learned Commissioner of Income (Appeals)-S, is wrong, illegal and opposed to facts of the instant case. 2. The learned CIT(A)-5 erred in law in passing the impugned order exparte without providing adequate opportunity to the appellant which is against the provision of law and principles of natural justice. 3. The learned Assessing officer and the first appellate authority erred in assessing the income from purchase and sale of shares under the head un-explained credit under section 68 and not as income exempt under section 10(38) of the Income Tax Act as claimed by the appellant. 4. The learned CIT(A)-5 and AO ought to have seen that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso, PPF contributions were made out of taxable income only. Hence no interest can be attributed to the investment in PPF. 12. The AO erred in relying on the reports from Investigating Wing of Income Tax Department, Kolkatta and statement of entry operators and post survey enquiries. The appellant was never afforded any opportunity to counter the same. Infact, in none of the hearing notices, the AO ever had mentioned about receipt of any such reports or statements. All these are grossly violative of principles of natural justice. The appellant was thus prevented from cross-examining the person whose statement has been relied on by the AO. 5. From the perusal of above grounds, we observe that the common grievance of all the assessee is against the decision of Ld. CIT(A) in confirming the addition of sale consideration received on sale of shares of listed companies under section 68 of the Act, denying the claim of exemption u/s 10(38) and commission paid on the sale transaction without confronting the evidences for cross verification relied upon by the Ld. AO for taking the adverse view. 6. For ease of reference, we draw brief facts from the case of Smt. Vandana Jai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d treated the sale consideration of shares as bogus transaction. Ld. AO concluded the assessment by making the addition as unexplained cash credits since explanation furnished by the assessee being unsatisfactory for the credit of ₹ 24,82,748/- u/s. 68 of the Act and assessed the same under the head Income from other sources . Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) who sustained the addition made by the Ld. AO. Aggrieved, now the assessee is in appeal before this Tribunal. 8. Mr. G. Jhonson, Addl.CIT represented the matter on behalf of the revenue and assisted the Bench in perusing the material on record. Mr. D. Anand, Advocate represented the assessee in the case of ITA No. 1970/Chny/2018. 9. Before adverting on the merits of the case, at the outset, the Bench took note of Ground No. 6 in ITA Nos. 1903 to 1907/Chny/2019 and Ground Nos. 9 and 12 in ITA No. 1970/Chny/2018 reproduced supra relating to non-confronting of evidences to the assessee for cross verification and cross examination, violating the principles of natural justice and raised a specific query before the Ld. Sr. DR to this effect in the light of provisions of section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer with similar directions. Ld. AR also placed reliance on the decision of Hon ble Delhi High Court in the case of PCIT-12 v. Smt. Krishna Devi Others in ITA 125/2020 order dated 15.01.2021. 11. We heard the parties and perused the material available on record including the judgments cited before us. It is placed on record that Ld. Sr. DR filed a written submission through email dated 11.03.2022 / 15.03.2022l addressed to the Bench along with soft copies of relevant attachments comprising of a. Decision by coordinate SMC Bench of Chennai ITAT in Manish D. Jain (HUF) ITA No. 2982/Chny/2018 dated 04.09.2019 b. Decision by Hon ble Madras High Court in the case of CIT, Chennai v. Manish D. Jain (HUF) TCA No. 223 of 2020 dated 16.12.2020 c. Investigation Report by Directorate of Income-Tax (Investigation) Kolkata in the case of Project Bogus LTCG/STCL through BSE Listed Penny Stocks comprising of 135 pages from Chapter 1 to 8 (annexure A B not included in this submission though listed in the index of this report) 12. We find from the submission made by the Ld. Sr. DR that the factual position in the light of provisions of section 142(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer for examining it afresh as per directions issued by Hon'ble Karnataka High Court, in the case of Chandra Devi Kothari Vs. ITA (Writ Petition No. 39370/2014 Dt. 2.2.2015). Accordingly, the learned Authorised Representative prayed that the issue contested in this appeal may also be restored to the file of Assessing Officer with similar directions. 4. The learned Departmental Representative did not object to the prayer put forth by the learned A.R. 5. We heard the parties and perused the record. We notice that the SMC Bench of Bangalore Tribunal has considered an identical issue in the case of Shri Vinod Kothari (HUF) (supra) and the matter has been restored to the file of Assessing Officer with the following observation: 4.3.1 I have considered the rival submissions and first of all, I reproduce Para No.8 of the judgment of Hon'ble Karnataka High Court rendered in the case of M/s. Chandra Devi Kothari (Supra) and this is as under: 8. In the light of the facts and circumstances as adverted to above and as the petitioner has been denied an opportunity of fair hearing by providing copy of the statement and related details regarding the all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (HUF) ( supra ) on the availability of material to the assessee. Further, respectfully following the directions given in Para 8 in the judgment of Hon ble Karnataka High Court in the case of Chandra Devi Kothari ( supra ) and the order of co-ordinate bench of ITAT, Bangalore in the case of Shri Suresh J. Kothari (HUF) ( supra ), we set aside the impugned order passed by Ld. CIT(A) and Ld. AO and restore the matter back to the file of the Ld. AO with the direction to comply with the mandatory statutory requirements of section 142(3) of the Act failing which may vitiate the assessment itself. We are of the considered view that the Ld. AO has to reconsider the issue afresh after furnishing to the assessee all the material relied upon by him/her while passing the assessment order. Since the matter is restored to the file of Ld. AO for fresh adjudication in terms of finding and observations made hereinabove, we are not expressing any views on the merits of the case so as to limit the assessment procedure before the Ld. AO. The observations herein made by us in remanding the matter back to the file of Ld. AO will not impair or injure the case of the Revenue nor will it cause any prejud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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