INCOME TAX OFFICER, WARD-8(1), HYDERABAD, HYDERABAD vs. SEEMA AGARWAL, HYDERABAD

At the outset, learned AR submitted that even according to Form- 36, the total tax effect is only Rs. 2,75,691/- and, therefore, in terms of Circular No. 3/2018 dated 11/07/2018, and 17/2019, dated 08/08/2019 it falls below the threshold condition for filing departmental appeals. In the alternative, he also pleaded that learned CIT(A) in his order, noticed that the facts of the case of the assessee are identical to the facts of her husband, wherein after considering all the aspects of the matter, by order dated 07/07/2017, in ITA No. 1520/Hyd/2016, a Co-ordinate Bench of the Tribunal decided the issue in favour of the assessee therein. He, therefore, submits that the present appeal which is identical in all respects is covered.

Per contra, learned DR submitted that the circulars cited by the learned AR are not applicable to the case of the assessee since the claim is in respect of the bogus LTCG/LTCL through penny stocks. He submitted that the assessee is not entitled to rely on the view taken by the Tribunal, in the case of her husband.

We have gone through the record in the light of the submissions made on either side. Pursuant to the search and seizure under section 132 of the Act conducted in Mahasagar group of cases, Mumbai of which M/s. Alliance Intermediateries & Network Pvt Ltd (M/s AINPL) is one of the group concerns and the sworn statement recorded on 16/01/2013 from Mr. Mukesh Choksi, Director of the group of companies to the effect that all his companies were engaged in fraudulent billing activities and in the business of providing bogus speculative profit/loss, short term/long term capital gain/loss etc. only the cases of the assessee and her husband were reopened.

Similarly, the learned Assessing Officer reopened the assessment of the Sri. Gajanand Agarwal, husband of the assessee also solely by relying on the statement of Mr. Mukesh Chokshi as the transaction done by him in M/s. Alliance Intermediaries & Network Pt Ltd., which is one of the companies, in which Mahasagar Group issued accommodation entries. Such an assessment was challenged on the ground that the learned Assessing Officer did not give any opportunity to assessee to cross examine Mr. Mukesh Chokshi.

A Co-ordinate Bench of the Tribunal in ITA No. 1520/Hyd/2016 considered such a plea taken by the husband of the assessee and held that without giving an opportunity of cross examination in this regard and merely relying on the statement of Mr. Mukesh Chokshi, which is against the natural justice the re-opening is bad and hence the re-assessment can be treated as void and cannot be enforced.

Case of Sri Gajanand Agarwal was decided by the Co-ordinate Bench of the Tribunal by relying on the decision of Hon’ble Apex Court in the case of Andaman Timber Ltd Vs. CCE(2015) 281 CTR 241(SC) and also the tax effect to file further appeal is below the monitory limit prescribed by the CBDT in Inst.No.21/2015 to file further appeal, no further appeal was preferred by the department. Since the facts of the case of the assessee are identical to the case of her husband Sri Gajanand Agarwal, learned CIT(A) followed the same and allowed the appeal preferred by the assessee.

On a careful consideration of the facts of this case and the case of the husband of the assessee, we find that both are identical and, therefore,

In the result, appeal of the Revenue is dismissed.