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Income Tax Appellate Tribunal, BANGALORE BENCH ‘B’
Before: SHRI JASON P BOAZ & SHRI LALIET KUMAR
PER SHRI JASON P BOAZ, ACCOUNTANT MEMBER :
This appeal by the assessee is directed against the order of the CIT(A)-2, Bangalore dated 23/3/2017, upholding the order of the assessment for asst. year 2009-10, passed u/s 147 r.w.s 143(3) of the Income-tax Act, 1961 (in short ‘the Act’) vide order dated 31/12/2013.
Briefly stated, the facts of the case are as under:- 2.1 The assessee, an individual, filed his return of income for asst. year 2009-10 on 27/3/2010 declaring income of Rs.4,31,700/- from income from other sources. The return was processed u/s 143(1) of the Act. Subsequently, on receipt of information from DIT(I&CI), New Delhi that a search, u/s 132 of the Act was conducted in the Mahasagar group cases on 25/11/2009, proceedings u/s 147 of the Act were initiated in the case on hand, on the ground that during the aforesaid search, Shri Mukesh Chokshi in a statement on oath u/s 131 of the Act had admitted that, he and his group concerns were engaged in fraudulent billing activities and involved in giving accommodation entries in order to enable its clients to declare speculative profits/losses as they required and that one of those was this assessee. The assessment was completed u/s 147 r.w.s 143(3) of the Act vide order dated 31/12/2013 wherein income of the assessee was determined at Rs.14,20,750/-. Aggrieved by the order of assessment dated 31/12/2013 for asst. year 2009-10, the assessee preferred an appeal before the CIT(A)-2, Bangalore who dismissed the assessee’s appeal vide the impugned order dated 23/3/2017. 3.1 Aggrieved by the order of the CIT(A)-2, Bangalore dated 23/3/2017 for asst. year 2009-10, the assessee has preferred this appeal raising the following grounds:-
1. The learned Assessing Officer had erred in passing the order in the manner passed by him and the learned Commissioner of Income tax (Appeals) has instead of quashing the order, erred in confirming the same.
2. The impugned order passed by learned Assessing Officer being in total violation of principles of natural justice makes the order being bad in law and liable to be quashed.
3. In any case, in the absence of the conditions precedent required for reopening makes the reopening bad in law and also makes the consequential orders bad in law and liable to be quashed. The learned Commissioner of Income tax (Appeals) instead of quashing the order has erred in upholding the reopening of assessment. 4.1 In any case and without prejudice the lower authorities have erred in holding the transactions in shares as not genuine and in holding that the appellant had not earned capital gains on sale of shares. Further the lower authorities have erred in taxing the income u/s. 68 of the Act 4.2 The facts and circumstances of the case have not been appreciated properly by lower authorities. On proper appreciation of facts, it will be clear that he appellant had genuinely dealt in shares and had earned capital gains and the same has to be accepted as such and the addition as made and sustained u/s. 68 of the Act is to be deleted. 4.3. In any case the addition made is excessive. The learned Assessing Officer had erred in making an addition of Rs. 11,73,618/- when the actual credit in bank account was only Rs.2,04,5 67.81. 4.4. The learned Assessing Officer had also erred in levying interest u/s. 234B of the Act. The appellant denies liability to pay interest. The interest having been levied erroneously is to be deleted 5. In view of the above and other grounds to be adduced at the time of hearing it is requested that the impugned order be quashed or atleast the addition as made be deleted and interest levied be deleted.”
3.2 It is submitted by the ld AR for the assessee that on similar issues and facts; as in this appeal of the assessee’s; co-ordinate benches of this Tribunal in the cases of Mukesh Kumar Solanki in dated 17/3/2017, Anitha Nahar in ITA No.2170/Bang/2016 dated 4/4/2017 and Ashok Kumar (HUF) in ITA No.956/Bang/2017 dated 31/5/2017 have held that the matter be restored to the file of the Assessing Officer (‘AO’) for fresh examination and adjudication with the same directions as were rendered by the Hon’ble Karnataka High Court in the case of Chandra Devi Kothari in Writ Petition No.39370/2014 dated 2/2/2015. It was further submitted that on similar issues and similar facts, another SMC bench of the tribunal in the case of Smt. Narangi Devi in ITA No.487/Bang/2017 dated 19/5/2017 has set aside the order of the CIT(A) and restored the matter to the file of the AO with a direction to first confront the assessee with the statement of Shri Mukesh Choksi and afford the assessee opportunity to examine Shri Mukesh Choksi in order to find out the truth in the matter. It was prayed, that in the case on hand also, the issue in dispute may be decided on similar lines as the cited cases. 3.3 Per contra, the ld DR for the Revenue vehemently supported the orders of the authorities below. 3.4.1 We have heard the rival contentions and perused and carefully considered the material on record, including the judicial pronouncements cited (Supra). From an appreciation of the facts on record, we find that in the case on hand also, the addition was made on the basis of the sworn statement recorded from Shri Mukesh Choksi, Director of Mahasagar Group and other group companies. In the case of Smt. Anitha Nahar in ITA No.2170/Bang/2016 dated 4/4/2017, to which one of us is party and Ashok Kumar (HUF) in ITA No.956/Bang/2017 dated 31/5/2017 to which both of us are party, it was noted that as per the judgment of the Hon’ble Karnataka High Court in the case of Chandra Devi Kothari (Supra) the matter should be restored back to the file of the AO for fresh examination and adjudication thereon, after providing the assessee a copy of the sworn statement of Shri Mahesh Chokasi relied on by the AO and providing the assessee adequate opportunity of cross examination of Shri Mukesh Choksi and of being heard in the matter. The co-ordinate bench in the case of Anitha Nahar (Supra) in its order at para 4 to 7 has held as under:- “4. We have considered the rival submissions. We find that in the present case also, the addition was made on the basis of sworn statement recorded from one Mr. Mukesh M Choksi, Director of Mahasagar Securities and other companies. In the case of Shri Mukesh Kumar Solanki (Supra) also, it was noted by SMC Bench of this Tribunal that as per the judgment of the Hon’ble Karnataka High Court rendered in the case of Chandra Devi Kothari (Supra), the matter should be restored back to the file of the AO for fresh decision after providing a copy of the statement of Shri Mukesh M Choksi. For the sake of ready reference, we re-produce para-5 & 6 of this Tribunal order rendered in the case of Shri Mukesh Kumar Solanki.
“5. I have considered the rival submissions and first of all, I reproduce Para No.8 of the judgment of Hon’ble Karnataka High Court rendered in the case of M/s Chandra Devi Kothari (Supra) and this is as under:-
6. From the above Para from the judgment of Hon’ble Karnataka High Court, it is seen that matter was restored back to the file of the AO for fresh decision after providing copy of the statement of Shri Mukesh Choksi. As per the facts noted by the High Court in the earlier paras of judgment and as per the facts of the present case, I find that the facts are similar and ld DR of the Revenue also could not point out any difference in facts and hence, by respectfully following this judgment of Karnataka High Court, I set aside the order of ld CIT(A) and restore the matter to the file of the AO for fresh decision with the same directions as were given by the Hon’ble Karnataka High Court in the case as per Para No.8 of the judgment reproduced above. In view of this decision, no adjudication is called for at this stage regarding the merit of the addition.
In the present case also, the dispute in question is that whether the reassessment order is valid or not and this aspect of the matter was decided by the lower authorities without supplying the copy of the statement of Shri Mukesh M Choksi to the assessee.
The ld. DR of the revenue could not point out any difference in facts in the present case and in the case of Shri Mukesh Kumar Solanki (Supra) and also in the case of Chandra Devi Kothari (Supra). Hence, we decide the issue regarding validity of the re- assessment in the same line by respectfully following the judgment of the Hon’ble Karnataka High Court because ld. DR of the revenue could not point out any difference in facts. Accordingly, we set aside the order of the ld.CIT(A) and restore the matter back to the file of the AO for fresh decision with same directions as were given by the Hon’ble Karnataka High Court in that case as per para-8 of the judgment re-produced above. In view of this decision, no adjudication is called for at this stage regarding the merit of the addition.