ANANDKUMAR JAIN HUF,MUMBAI vs. ITO 24(1)(1), PIRAMAL CHAMBER

The Learned CIT(A) erred in upholding the action of assessing officer in making an addition of sum of Rs. 1,01,04,352/- u/s 68 of the act by treating the sale of shares made through recognized stock exchange as an accommodation entry. 2. The Learned CIT(A) erred in confirming the addition made by assessing officer by completely ignoring the fact that the reliance was placed on irrelevant consideration which had no bearing on the sale of shares made by the appellant under recognized stock exchange.

On the facts and circumstances of the case, the learned CIT(A) erred in confirming the addition without appreciating that the learned assessing officer had placed reliance upon certain reports of DDIT (Inv), Kolkata and for which a copy was also not served to the appellant to rebut the same.”

The assessee is a HUF and filed the return of income for AY 2014-15 on 30.03.2015 declaring a total income of Rs. 7,17,190/-. The case was selected for scrutiny and the statutory notices were duly served on the assessee. The Assessing Officer (AO) completed the assessment u/s. 143(3) by making a disallowance on alleged penny stock u/s. 68 to the tune of Rs. 1,01,04,352/- and also a disallowance u/s. 69C towards commission on the alleged penny stock to the tune of Rs. 3,03,131/-. Aggrieved the assessee filed further appeal before the CIT(A). The CIT(A) issued 7 notices from 2021 to 2025 and since the assessee did not respond to the notices proceeded to decide the appeal based on materials available on record ex-parte. The CIT(A) deleted the disallowance made u/s. 69C while confirming the addition made u/s 68 by the AO.

We heard the parties and perused the material on record. During the course of hearing the ld. AR submitted that the assessee did not respond to the various notices issued by the CIT(A) for the reason that the assessee was not aware of the issue of the said notices. The ld. AR submitted an affidavit from the assessee stating that the legal matters were handled by his brother Mr. Arvind Jain and due to family dispute in 2022 the assessee got separated from his brother. The ld. AR further submitted that since the notices were issued to the email Id of the brother and the assessee not being in talking terms with the brother was not informed of the notice of hearing issued by the CIT(A). Considering the facts peculiar to the present case, we see merit in the plea that one more opportunity to be given to the assessee to represent the case on merits before the CIT(A). Accordingly, in the interest of natural justice and fair play, we are remitting the issue back to the CIT(A) with a direction to call for relevant details for deciding the case on merits in accordance with law. The assessee is directed to file a details as may be called for by the CIT(A) with regard to the impugned issues and co-operate with the appellate proceedings. It is ordered accordingly.

In result, appeal of the assessee is allowed for statistical purposes.