BIMAL V. VORA (HUF),MUMBAI vs. ITO WARD- 19 (1)(2), MUMBAI

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ITA 6789/MUM/2018Status: DisposedITAT Mumbai15 June 2020AY 2009-106 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal allowed the assessee an opportunity to cross-examine Shri Mukesh Chokshi, on whose statement the additions were based. The matter was restored to the Assessing Officer for this purpose.

What were the facts?

The assessee's appeal arose from an order confirming the reopening of assessment and an addition of ₹6,28,700/- for treating investment in shares as income from other sources. An additional addition of ₹12,578/- was made for alleged commission payment.

What were the issues?

The primary issues were the validity of reopening the assessment and the justification for additions made on account of share transactions and alleged commission, particularly concerning the denial of cross-examination.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC II” BENCH, MUMBAI

Before: SRI MAHAVIR SINGH

For Appellant: Shri Jitendra Singh, AR
Hearing: 15.06.2020Pronounced: 15.06.2020

O R D E R महावीर स िंह, उपाध्यक्ष / PER MAHAVIR SINGH, VP: This appeal of assessee is arising out of the order of the Commissioner of Income Tax (Appeals)]-6, Mumbai, [in short CIT(A)], in dated 08.08.2018. The assessment was framed by the Income Tax Officer, Ward 19(1)(2), Mumbai (in short ITO/ AO) for the A.Y. 2009-10 vide order dated nil under section 143(3) r.w.s 147 of the Income-tax Act, 1961 (hereinafter ‘the Act’).

1.

“1. Reopening of assessment under section 147 of the Act is bad-in law; i. The Ld. Commissioner of Income Tax (Appeals)-6, Mumbai [hereinafter referred to as the “Ld CIT(A)”] erred in passing the order dated 08.08.2018 confirming the action of the ld. Assessing Officer in reopening the assessment by issuing a notice under section 148 of the Act without recording proper and valid reason to show that any income chargeable to tax has escaped from assessment. Hence, the notice issue under section 148 and subsequent assessment order passed under section 143 read with section 147 is bad in law and the same may be quashed. ii. The Ld. CIT(A) failed to appreciate that the notice under section 148 of the Act was issued on the basis of information received from Investigation wing without making further independent inquiry. Thus, there is no application of mind by the Ld. Assessing Officer to the evidence available on record. Hence, the notice issue under section 148 of the Act as well as subsequent reassessment order passed in

3.

As the assessee has not pressed the issue of reopening, I dismiss the same as not pressed.

4.

The next issue on merits is as regards to the addition confirmed by CIT(A) in regard to treating the investment in purchase and sale of shares as income from other sources amounting to ₹6,28,700/-. For this, assessee has raised the following ground No. 2: -

2. Addition by treating the investment in purchase of shares as income from other sources unjustified –₹ 6,28,700/- The Ld. CIT(A) erred in confirming the action of Ld. A.O. erred in making addition of rs.6,28,700/- being investment made in purchase of shares of M/s. Essar Oil as income from other sources without appreciating the facts and circumstances of the case. The Appellant prays that the addition of ₹6,28,700/- is not at all justified and the same may be deleted. ii. The Ld. CIT(A) failed to appreciate that the Appellant has furnished all relevant details in her possession to prove the genuineness of share transactions. Hence, the addition of iii. The Ld. CIT(A) further erred in drawing an adverse inference against the Appellant, relying on the statements of Mr. Mukesh Chokshi, without providing the appellant an opportunity to cross examine him. Therefore, the addition of rs.6,28,700/- is made against the principles of natural justice and the same may be deleted.”

5.

The assessee has also raised ground No. 3 regarding alleged commission payment on the above transaction relevant to ground No.3 read as under: - “3. Addition under section 69C of the Act on account of alleged commission payment is unjustified-₹12,578/- The ld. CIT(A) erred in upholding the action of the ld. A.O. in making addition of ₹ 12,578/- treating the same as alleged commission paid for taking accommodation entries without appreciating that the Ld. Assessing Officer has not brought any evidence on record to support his allegation. Thus the addition of Rs.12,578/- under section 69C is made merely on conjecture and surmises. Hence, the same may be deleted.”

6.

The above two grounds on merits are interconnected. The learned Counsel for the assessee stated that the entire addition

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