KETAN DINESHCHANDRA MEHTA,CHENNAI vs. ITONCR 11(3), CHENNAI

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) -13, Chennai, dated 26.06.2018 and pertains to assessment year 2014-15.

Shri K. Balasubramanian, the Ld.counsel for the assessee, submitted that the Assessing Officer, placing reliance on the report received from the Investigation Wing of the Department at Kolkata, denied exemption under Section 10(38) of the Income-tax Act, 1961 (in short 'the Act') and made addition under Section 68 of the Act. According to the Ld. counsel, the assessee has purchased 3000 shares of Blazon Marbles Limited for ₹5,250/-. The assessee sold the same on 21.03.2014 and 26.03.2014 for a total consideration of ₹6,74,058.1. According to the Ld. counsel, the assessee declared long term capital gains of ₹6,65,797/- and claimed exemption under Section 10(38) of the Act. The Assessing Officer, however, disallowed the claim of the assessee based upon the investigation report said to be received from the Investigation Wing of the Department at Kolkata. The Ld.counsel further submitted that the Assessing Officer has not furnished copies of investigation report to the assessee, therefore, the matter may be remitted back to the file of the Assessing Officer.

We heard Shri V.M. Mahidar, the Ld. Departmental Representative also. Admittedly, the Assessing Officer and the CIT(Appeals) placed reliance on the investigation report said to be received from the Investigation Wing of the Department at Kolkata. The copy of the said report was not furnished to the assessee. The proceeding before the Assessing Officer being a judicial proceeding, the Assessing Officer is expected to furnish all the material relied upon by him to the assessee. Unfortunately, such an exercise was not done by the Assessing Officer. Therefore, the orders of both the authorities below are set aside and the matter is remitted back to the file of the Assessing Officer. The Assessing Officer is directed to furnish copies of the report of Investigation Wing of the Department at Kolkata and other material relied upon by him and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.

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