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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SRI MAHAVIR SINGH
महावीर ससुंह, न्याययक सदस्य/ PER MAHAVIR SINGH, JM:
These appeals of the assessee are arising out of the orders of Commissioner of Income Tax (Appeals)]-2, Mumbai [in short CIT(A)], in Appeal Nos. CIT(A)-2/IT/10278,10279,10280/2017- 18 of even date 22.06.2018. The Assessments were framed by the Income Tax Officer, Ward-19(1)(2), Mumbai (in short ITO / AO) for the A.Ys. 2006-07 to 2008-09 vide orders of even date
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2016, under section 143(3) of the Income-tax Act, 1961 (hereinafter ‘the Act’).
At the outset, the learned Counsel for the assessee drew our attention to the common grounds / grounds No. 2 and 3. The facts and circumstances are exactly identical in all the years and issue is also identical. Hence, I will take the facts from AY 2006-07 in ITA No. 5451/Mum/2018 and will decide the issue. The relevant ground Nos. 2 and 3 read as under: - “2. The learned CIT(A) further erred in upholding the action of the learned AO in treating share purchased as sham without considering the direction issued by the honorable ITAT in its order. Thus, the order passed by the learned CIT (A) in contravention of directions issued by the honorable ITAT is bad in law and Lite same may be quashed.
Without prejudice to the above the learned CIT (A) uphold the action of the learned AO in treating the shares purchased amounting to Rs. 1,56,525/- as bogus unverifiable relying on the statement of Shri Mukesh Choksi without providing all opportunity of cross examination. Thus, the order passed by the learned CIT (A) is against the 3 | P a g e ITA Nos. 5451 to 5453/Mum/2018 Bimal V. Vora,
principles of natural justice. Hence, the same may be quashed.”
The learned Counsel for the assessee filed copy of Tribunals order in assessee’s own cases in its paper book. In all the three years, the Tribunal in ITA Nos. 3187/Mum/2015, 3190/Mum/2015, 3188/Mum/2015, 3191/Mum/2015, 3192/Mum/2015 for AYs 2006-07, 2007-08, 2008-09 vide order dated 19.08.2015 has remanded the matter back to the file of the AO for allowing opportunity of cross examination by Shri Mukesh Choksi, the alleged entry provider. The Tribunal vide Para 4 remanded the matter back by observing as under: -
“4. After going through the reasons for reopening, we found that there was sufficient material before the AO for reaching to conclusion that there was escapement of income. Accordingly, I uphold the reopening of assessment under section 147 of I.T. Act. The assessee has vehemently requested for opportunity of Cross examination. In these peculiar facts, it is considered appropriate to send these matters back to the file of the with the direction to provide all adverse material and copies of statements which have been referred by AO for making addition in the assessment order of the assessee. The assessee shall 4 | P a g e ITA Nos. 5451 to 5453/Mum/2018 Bimal V. Vora,
also place full material as may be required by Assessing Officer. The assessee shall extend necessary cooperation to the Assessing Officer. The Assessing Officer shall also give opportunity of cross examination to the assessee before making any addition in this regard.”
In term of the above, the learned Counsel for the assessee took us through the assessment order and stated that the AO repeated the same additions without any evidence or without allowing opportunity of cross examination of Shri Mukesh Choksi, the alleged entry provider on the basis of whose statement the addition was made. Even this issue was raised before CIT(A) and CIT(A) has reproduced the ground vide Para 3 of his order which read as under: -
“3. The AO has erred in not complying with specific directions of the Honourable ITAT that the appellant be given an opportunity to cross examine Mr. Choksi.” He pointed out that this ground was not at all adjudicated 5. by CIT(A). When these facts were confronted to the learned Sr. Departmental Representative, he could not rebut the above arguments and the fact that no opportunity of cross examination was provided to the assessee, of the alleged entry provider Shri Mukesh Choksi.
I have heard rival contentions and gone through the facts of the case. The admitted fact is that the Tribunal in ITA Nos.
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3187/Mum/2015, 3190/Mum/2015, 3188/Mum/2015, 3191/Mum/2015, 3192/Mum/2015 for AYs 2006-07, 2007-08, 2008-09 vide order dated 19.08.2015 has already directed for cross-examination of alleged entry provider Shri Mukesh Choksi. But neither the AO nor CIT(A) has carried out the exercise which is very much essential. This is second round of litigation and even in second round of litigation the AO has totally violated the judicial discipline. In view of the above facts, I am of the view that on this alleged addition made on account of profit on share of investment cannot be made without cross examination as the Tribunal has already directed the AO to allow cross examination of the alleged entry provider to the assessee, which was not done by the lower authorities. This is in total violation of the directions of the Tribunals order and again and again the same exercise cannot be directed. Hence, on this very ground, I delete the addition and reverse the orders of the lower authorities. Hence, in all the three years, the appeals of the assessee are allowed.
In the result, the appeals of the assessee are allowed. Order pronounced in the open court on 16.12.2019. (महावीर स िंह /MAHAVIR SINGH) (न्याययक दस्य/ JUDICIAL MEMBER) मुिंबई, ददिािंक/ Mumbai, Dated: 16.12.2019 स दीप सरकार, व.यनजी सधिव / Sudip Sarkar, Sr.PS
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आदेश की प्रयिसलपप अग्रेपिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त(अपील) / The CIT(A) 4. आयकर आयुक्त / CIT ववभागीय प्रयतयिधर्, आयकर अपीलीय अधर्करण, मुिंबई / DR, ITAT, Mumbai 5. 6. गार्ा फाईल / Guard file. आदेशान सार/ BY ORDER, त्यावपत प्रयत //// उप/सहायक पुंजीकार (Asstt.