What did the Tribunal hold?

The Tribunal found that the assessee had filed additional evidence before the CIT(A), including an affidavit from a broker, but these were not considered. The CIT(A) passed the order without providing a further opportunity for hearing or considering the submitted evidence.

The assessee claimed long-term capital gains as exempt, but the assessment was reopened based on a search in group companies alleging bogus transactions. The Assessing Officer disallowed the capital gains and made additions on sale of shares and other expenses.

What were the issues?

Whether the CIT(A) erred by not considering additional evidence and affidavits filed by the assessee and by passing an order without providing a proper opportunity for hearing.

Rajesh V. Shah vs ITO | ITAT Mumbai 2018

Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI

Before: SHRI D.T. GARASIA

For Appellant: Ms. Dinkle Haria, A.R

For Respondent: Ms. N. Hemalatha, D.R

Hearing: 14.12.2017Pronounced: 14.02.2018

Per D.T. Garasia, Judicial Member:

The present appeal has been preferred by the assessee against the order dated 10.02.2017 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2008-09.

The brief facts of the case are that assessee is an individual and filed its return of income on 09.03.09 declaring total income of Rs.3,17,050/- and claiming long term capital gain of Rs.14,80,823/- as exempt. Thereafter, the assessment was reopened on the basis of the search carried out in the group companies of the assessee wherein it was held that the transactions entered by such beneficial companies were bogus and represented undisclosed income of beneficiary and 2 Shri Rajesh V. Shah assessee is also one of the beneficiaries. Therefore, assessment was reopened and after reopening the assessment order, the Assessing Officer (hereinafter referred to as the AO) has disallowed the long term capital gain and also reworked the expenditure and made the addition on a capital gain of assessee on sale of shares of Crazy Infotech Ltd. worked out at Rs.19,570/-. Second, the addition was made of Rs.16,68,085/- on sale of purchase and further the addition of Rs.22,212/- was made as unexplained expenditure for obtaining the accommodation entry in form of share and addition of Rs.19,120/- was disallowed on the claim of short term capital gain by the assessee.

Before the Ld. CIT(A) the assessee has taken the ground that assessee has filed the additional evidence before the Ld. CIT(A) which is on page 36 page 90 to 91 and assessee has also filed the affidavit from broker also and letter to AO asking for inspection and assessment order for 2007-08. Assessee submitted all the evidences before the Ld. CIT(A). However, the AO passed the order without providing further opportunity of hearing and Ld. CIT(A) has neither considered the affidavit filed by the assessee nor provided the copy of the statement and nor provided the cross examination. Therefore, the Ld. A.R. submitted that this appeal may be restored to the Ld. CIT(A).

The Ld. D.R. objected to it.

3 Shri Rajesh V. Shah 5. Having heard both the parties, I find that before the Ld. CIT(A) the assessee has filed the affidavit obtained from the broker. Assessee also asked the AO for verification. In find that the assessee was not given any opportunity and without considering the same the Ld. CIT(A) has passed the order. Therefore, in the interest of justice and fairplay, I restore this matter back to the file of the Ld. CIT(A). The Ld. CIT(A) is directed to decide the matter afresh as per law.

In the result, appeal of the assessee is allowed.

Order pronounced in the open court on 14.02.2018.

RAJESH V. SHAH,MUMBAI vs. ITO WD 25(3)(3), MUMBAI

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