SUBHASH CHANDER (HUF),GURGAON vs. ITO, WARD- 4(3), GURGAON

The aforesaid assessees have filed the appeals against the

respective orders passed by Ld. CIT(A) confirming the orders of Assessing

Officer wherein following additions were made against sale of shares in

the scrip of M/s Effingo Textile & Trading Ltd, treated as unexplained cash

credit u/s 68 of the Income Tax Act, 1961 (in short “Act”). This was

claimed as exempt by assessees u/s 10(38) of the Income Tax Act, 1961.

Name of the case ITA No. Addition (Rs) VIKAS SAINI 3332/Del/2018 Rs 25,02,610/- SUBHASH CHANDER 3333/Del/2018 Rs. 24,98,000/- SAINI (HUF) DISBAGH SINGH SAINI 3334/Del/2018 Rs 25,01,427/- (HUF) JASBIR SINGH SAINI 3335/DEL/2018 RS. 24,81,510/- (HUF)

the appeals were heard together and for the sake of convenience, all

these appeals are being consolidated and disposed of by this common

order. For sake of reference and facility, the facts in case of Sh. Vikas

Saini vs. ITO, Ward 4(5), Gurgaon (AY 2015-16) are taken up and only

Grounds of appeal raised by assessee in this case are reproduced

hereunder for the sake of convenience, being identical and similar, except

the difference in the figures.

CIT(A) has erred in law and onf acts in confirming the action of the

AO in making addition of Rs. 25,02,610/- u/s. 68 and has further

erred in not allowing the exemption u/s. 10(38) as claimed by the

assessee and that too by recording incorrect facts and findings and

without granting opportunity of cross examination as per law and

without providing the entire adverse material on records and without

observing the principles of natural justice.

CIT(A) in confirming the action of the AO in making addition of Rs.

25,02,610/- u/s. 68 and not allowing the benefit of exemption u/s.

10(38), is bad in law and against the facts and circumstances of the

case.

CIT(A) has erred in law and on facts in not reversing the action of

AO in charging interest u/s. 234B of the Income Tax Act, 1961.

any of the grounds of appeal at the time of hearing and all the

above grounds are without prejudice to each other.

the issue in all the appeals are almost identical, but he is arguing only

one appeal i.e. ITA No. 3332/Del/2018 (AY 2015-16) – Vikas Saini vs. ITO

and drew my attention towards Ground No. 1 raised by the assessee in

the appeal as well as the ground raised by the assessee before the Ld.

CIT(A), which the Ld. CIT(A) has reproduced in his impugned order. Also

during the hearing, he further draw my attention towards ground no. 1 in

all the appeals and stated that the said issue is in legal nature, hence, he

wants to argue the same first and if the assessee succeeds in this ground,

then the addition in dispute may be deleted and assessment may be

cancelled. He further stated that if the Bench is not agreed with the

assessee’s contention on the issue involved in ground no. 1, then on

merits, the appeal of the assessee may be re-fixed for hearing. He

further submitted that the addition in dispute in all the appeals have been

made by the AO and confirmed by the Ld. CIT(A) u/s. 68 of the I.T. Act

on the basis of the statement of the entry provider Sh. Anil Kumar

Khemka and Nikhil Jain referred in the impugned order, but the same has

not been provided to the assessee as well as the opportunity of cross

examination has also not been provided to the assessee despite the

request made by the assessee to the AO. He further requested that non-

providing of opportunity to cross examine the above said entry providers,

it is against the principle of natural justice and against the settled law. He

also draw my attention towards one Paper Book filed by the assessee

containing pages 1 to 67 especially the Page No. 21-29 in which he has

attached the copy of letter issued by DDIT (Inv.), Unit-II, Kolkata to ITO,

Ward 4(3), Gurgaon dated 11.10.2017 stating that nobody attended for

cross examination; copy of reply dated 27.9.2017 filed with the AO

submitting that the assessee deputed Sh. Ashwani Verma and Mr. SM

Saini and issued him power of attorney for carrying out cross examination

of Sh. Anil Kumar Khemka on his behalf and further assessee submitting

the copy of letter dated 8.9.2017 issued by the AO providing opportunity

for cross examination; receipt copy of letter dated 22.9.2017 filed to

DDIT (Inv.) Unit-II, Kolkata to conduct cross verification of Sh. Anil Kumar

Khemka alongwith power of attorney and copy of air tickets; confirmed

copy of account of M/s DB (International) Stock Brokers Ltd.; copy of

letter dated 31.7.2017 from M/s Ankush Poly Engineering (P) Ltd. issued

to assessee providing the confirmed copy of bill, confirmed copy of receipt

of payment, copy of ITR and the copy of written statement filed before Ld.

CIT(A). He also filed the another paper book which is compilation of 30

case laws containing pages 1 to 402 and stated that the issue on merit is

squarely covered by the said decisions. He further submitted that in view

of the facts and circumstances of the present case as well as the

documentary evidences filed by the assessee and the supporting case laws

referred by him in the Paper Book, the addition in dispute may be deleted

and requested to cancel the orders of the authorities below.

authorities and stated that the opportunity of cross examination has been

given to the assessee, but the assessee has not availed the same. He

draw my attention toward the letter written by the ITO to the assessee

providing the statement of entry providers as well as the opportunity to

the assessee for cross examination the entry providers. He requested

that the assessee has not availed the opportunity of cross examination in

spite of the fact that the AO has provided the statement of the entry

provider to the assessee. Therefore, the arguments advanced by the Ld.

Counsel for the assessee as well as the case laws relied by him are not

useful on the ground no. 1 in all the appeals, hence, on this account the

appeal of the Assessee may be dismissed.

the Paper Books filed by the Ld. Counsel for the assessee as well as the

impugned order. In find that assessee has filed a Paper Book containing

pages 1 to 67 especially the Page No. 21-29 in which he has attached the

copy of letter issued by DDIT (Inv.), Unit-II, Kolkata to ITO, Ward 4(3),

Gurgaon dated 11.10.2017 stating that nobody attended for cross

examination; copy of reply dated 27.9.2017 filed with the AO submitting

that the assessee deputed Sh. Ashwani Verma and Mr. SM Saini and

issued him power of attorney for carrying out cross examination of Sh.

Anil Kumar Khemka on his behalf and further assessee submitting the

copy of letter dated 8.9.2017 issued by the AO providing opportunity for

cross examination; receipt copy of letter dated 22.9.2017 filed to DDIT

(Inv.) Unit-II, Kolkata to conduct cross verification of Sh. Anil Kumar

Khemka alongwith power of attorney and copy of air tickets; confirmed

copy of account of M/s DB (International) Stock Brokers Ltd.; copy of

letter dated 31.7.2017 from M/s Ankush Poly Engineering (P) Ltd. issued

to assessee providing the confirmed copy of bill, confirmed copy of receipt

of payment, copy of ITR and the copy of written statement filed before Ld.

CIT(A) and also perused another paper book which is compilation of 30

case laws containing pages 1 to 402 which are on merit of the case. I am

of the considered view that assessee has raised ground no. 3 before the

Ld. CIT(A) in all the appeals requesting for granting the opportunity of

cross examination as per law providing entire adverse material on record

used against him. It is noted that assessee has requested to the Ld.

CIT(A) for providing cross examination of the entry provider and

requested for the adverse material used against the assessee, but the Ld.

CIT(A) has not decided this ground in the impugned order. I have also

gone through all the four appeals and I am of the considered view that

assessee has raised 6 grounds before the Ld. CIT(A). For the sake of

convenience, I am reproducing 06 grounds of appeal as under, which are

also mentioned at page no. 2 of the impugned order:-

at total income of 25,34,787/- as against returned

income of Rs. 33,360/- and accordingly denies liability to

pay tax, cess and interest demanded thereon.

the case, Ld. AO has erred in law and on facts in

framing impugned assessment order and that too with

assuming jurisdiction us per law.

the case, Ld AO has erred in law and on facts in making

addition of Rs. 25,01,427/- u/s. 68 and has further erred

it not allowing the exemption u/s 10(38) as claimed by

the assessee and that too by recording incorrect facts

and findings without granting opportunity of cross

examination as per law and providing the entire adverse

material on records and without observing the principles

of natural justice.

amend or delete any of the grounds of appeal at the

time of hearing and all the above grounds are without

prejudice to each other. ”

5.1 After perusing the aforesaid grounds raised before the Ld. CIT(A) by

the assessee as well as the impugned order of the Ld. CIT(A), I note

that Ld. CIT(A) has not decided the ground 3 raised before him and

dismissed the appeal filed by the assessee on other grounds. No doubt

that assessee has raised the ground no. 1 in these appeals which is

relating to granting the opportunity of cross examination and providing

entire adverse material to the assessee. As argued by the Ld. Counsel for

the assessee that at Page no. 23-30 in which statement of entry provider

has been given to the assessee for cross examination namely Sh. Anil

Kumar Khemka S/o Lakhi Narayan Khemka was also provided to the

assessee. It is also noted that as per the evidence produced by the

assessee regarding the air ticket at page no. 27-30 of the paper book, the

assessee has gone to the office of the Dy. Director of Income Tax

(Investigation), Unit-II(3), Kolkata where the cross examination of the

entry provider was to be given by the Authority, but the same was not

provided to the A.R. for the assessee. On the contrary, Ld. DR has stated

that opportunity for cross examination of the entry providers has been

provided to the assessee. In my view, the issue in dispute i.e. cross

examination opportunity to the assessee was provided or not provided is

not clear and is disputed. Secondly, this ground raised by the assessee

before the Ld. CIT(A) vide ground no. 3, which is reproduced above, has

not been decided by the Ld. First Appellate Authority. Hence, in my

considered view and in the interest of justice, I deem it fit that the issue in

dispute raised in ground no. 1 in the present appeal before this Tribunal

and issue raised in ground no. 3 raised before the Ld. First Appellate

Authority needs to be set aside to the file of the Ld. CIT(A) with the

directions to decide the same as per law, after giving adequate

opportunity of being heard to the assessee. I hold and direct accordingly.

Ld. CIT(A) is also directed to verify the genuineness of the air tickets in

dispute. However, Assessee is directed to fully cooperate with the Ld.

CIT(A) for disposing of the issue in dispute in the present appeal and will

not seek any unnecessary adjournment. In the result, the appeal of the

assessee is allowed for statistical purposes.

Chander (HUF) in ITA 3333/Del/2018 (AY 2015-16); Disbagh Singh Saini

(HUF) in ITA No. 3334/Del/2018 (AY 2015-16); and Jasbir Singh Saini

(HUF) in ITA 3335/Del/2018 (AY 2015-16), similar facts are permeating,

therefore, my finding given above will apply mutatis mutandis in these

three appeals also, because the ground raised, evidences and documents

are exactly the same in all the appeals.

purposes.

The decision is pronounced on 08/01/2019.

Sd/- (H.S. SIDHU) JUDICIAL MEMBER

Dated: 08/01/2019

“SRBHATNAGAR”