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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) -5, Chennai, dated 15.09.2017 and pertains to assessment year 2010-11.
Ms. Sushma Harini, the Ld.counsel for the assessee, submitted that the Assessing Officer completed the assessment hurriedly without giving any opportunity to the assessee. According to the Ld. counsel, the assessment was made on the basis of the statement said to be recorded from one Shri Ashok Kumar Kayan, who is a share broker. However, the said statement was not furnished to the assessee. According to the Ld. counsel, a copy of the statement has to be furnished to the assessee. In the absence of the statement, the assessee was not able to defend the case properly. According to the Ld. counsel, the assessee has produced the entire details of purchase and sale of shares.
On the contrary, Shri B. Sahadevan, the Ld. Departmental Representative, submitted that the share broker Shri Ashok Kumar Kayan was providing accommodation entry in the form of bogus long term capital gains in connivance with entry operators and promoters of scripts at CSE. Shri Ashok Kumar Kayan is a penny stock broker of the BSE and CSE. According to the Ld. D.R., the assessee is also one of the persons invested in penny stock. The assessee claimed long term capital gains to the extent of ₹16,62,500/- and claimed exemption under Section 10(38) of the Income-tax Act, 1961 (in short 'the Act'). The Ld. D.R. further submitted that the assessee has invested in the shares of Bakra Pratishtan Limited, which is a penny stock. The shares of Bakra Pratishtan Limited were transferred in the name of the assessee. The purchase price of shares was ₹ 10/- each. In fact, according to the Ld. D.R., the shares were dematerialized and sold at the rate of ₹352.50 per share. Therefore, according to the Ld. D.R., the CIT(Appeals) has rightly confirmed the order of the Assessing Officer.
We have considered the rival submissions on either side and perused the relevant material available on record. The entire assessment appears to be made only on the basis of the statement of Shri Ashok Kumar Kayan, who is considered to be a penny stock broker.
Admittedly, the statement said to be recorded from Shri Ashok Kumar Kayan was not furnished to the assessee. It is also not known whether the purchase price of the shares was paid by cheque or by cash. The Assessing Officer observed that the assessee did not disclose the mode of payment of purchase price. In those circumstances, this Tribunal is of the considered opinion that the matter needs to be reconsidered by the Assessing Officer. Accordingly, the orders of both the authorities below are set aside and the entire issue raised by the assessee is remitted back to the file of the Assessing Officer. The Assessing Officer shall furnish a copy of the statement said to be recorded from Shri Ashok Kumar Kayan to the assessee. The assessee shall also disclose the mode of payment of purchase price for purchasing the shares of Bakra Pratisthan Limited.
Thereafter, the Assessing Officer shall examine the matter and 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.