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Income Tax Appellate Tribunal, “E”, BENCH MUMBAI
Before: SHRI MAHAVIR SINGH, JM & SHRI G. MANJUNATHA, AM &
Date of Hearing 05/07/2019 Date of Pronouncement 24/07/2019 आदेश आदेश / O R D E R आदेश आदेश PER G.MANJUNATHA (A.M): The assessee has filed Stay Application and requested to stay outstanding demand of tax and interest of Rs. 17,42,32,676/- for the Assessment Year (AY) 2012-13. When the Stay Application is called for hearing on 05/07/2019, the Ld. AR for the assessee submitted that the AO has made additions towards share premium u/s 68 of the I.T Act, 1961, without providing an opportunity of cross- examination of Shri Shirish C.Shah and copy of the statement on the basis of which additions were made and sustained during the course of assessment as well as appellate proceedings, in gross
S.A.No.275/Mum/2019 Empire India Multitrade Pvt.Ltd. violation of the principles of natural justice and law. Therefore, instead of taking up SA for the assessee, the appeal filed by the assessee, which is tagged along with this SA may be heard and set aside to the file of the AO to give an opportunity to the assessee before the AO. The Ld. DR present for the revenue, although initially opposed hearing of appeal, but subsequently aggreed for the proposition put forth by the Ld.AR for the assessee to set aside the issue to the file of the AO. We, therefore, decided to take-up the appeal filed by the assessee for hearing.
The brief facts of the case are that the assesee company is engaged in the business of trading others filed its return of income for AY 2012-13 on 27/09/2012 declaring taxable income at Rs. 55,43,547/-. The assessment has been completed u/s 143(3) of the I.T.Act, 1961 on 17/03/2015 determining the total income at Rs. 94,21,93,547/- by making additions towards disallowance on account of accommodation entries of share capital and share premium on the ground that the assesee is indulged in the activity of providing accommodation entries of share capital and share premium.
Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee has filed elaborate return submissions on the issue which has been reproduced at Para 4.2 on pages 11 to 23 of Ld.CIT(A) order. The Ld. CIT(A) for the detailed reasons recorded in its appellate order dated 25/02/2019 allowed partial relief to the assessee, whereby deleted additions to the extent of Rs. 51,93,25,000/- and balance
S.A.No.275/Mum/2019 Empire India Multitrade Pvt.Ltd. amount of Rs. 41,73,25,000/- has been confirmed. Aggrieved by the Ld.CIT(A), the assessee is in appeal before us.
The Ld. AR for the assessee, at the time of hearing, submitted that the AO as well as the Ld. CIT(A) were grossly erred in not providing opportunity of cross-examination of Shri Shirish C.Shah and copy of his statement on the basis of which additions were made and sustained during the course of assessment as well as appellate proceedings in gross violation of the principles of nature justice and law. Therefore, the issue may be set aside to the file of the AO to give an opportunity to the assessee to cross-examine Shri Shirish C. Shah and also to avail the benefit of his statement. The Ld. DR, on the other hand, fairly accepted that the issue may be set aside to the AO for denovo assessment in light of claim of the assesse that there is violation of the principles of natural justice.
We have heard both the parties, perused the material available on record and gone though the orders of the authorities below. At this juncture, we make it clear that both counsels for the assessee as well as the revenue have agreed to set aside the issue to the file of the AO for denovo assessment in light of claim of the assessee that there is violation of the principles of natural of justice in assessment proceedings in as much as, the opportunity of cross- examination of the person who gave statement and copy of his statement was not given to the assessee, in spite of specific request made during the course of assessment proceedings. Therefore, considering the arguments of both counsels, we deem it appropriate to set aside the issue to the file of the AO with a direction to reframe
S.A.No.275/Mum/2019 Empire India Multitrade Pvt.Ltd. the assessment denovo in light of claim of the assessee that there is a violation of the principles of natural justice. We further direct the AO to provide opportunity of cross-examination of the person who gave statement i.e, Shri Shirish C.Shah and also copy of his statement on the basis of which additions were made and sustained during the assessment as well as appellate proceedings. We further make it clear that we have not expressed any opinion on merits in respect of issue involved in this appeal and left open, the issue to the AO to decide in accordance with law.
In the result, the appeal filed by the assessee is treated as allowed for statistical purpose.
In so far as Stay Application filed by the assessee in SA No.275/Mum/2018, we find that since the appeal filed by the assessee has been set aside to the file of the AO for denovo assessment, consequent Stay Application filed by the assessee seeking stay for outstanding demand becomes infructuous and hence, the same is dismissed as not maintainable.
In the result, the Stay Application filed by the assessee is dismissed. Order pronounced in the open court on this 24/07/2019