SUPRIYA PHADTARE,BHIWANDI vs. ITO WD 1(4), KALYAN

सुनवाई की तायीख / Date of Hearing : 02.05.2017 घोषणा की तायीख /Date of Pronouncement : 08.05.2017 आदेश / O R D E R PER R.C. SHARMA, AM: These appeals are filed by the assessee against the common order of the CIT (A)-2, Thane for the AYs 2006-07 and 2007-08, in the matter of order passed u/s 143(3) r.w.s 147 of the Act, wherein the assessee is aggrieved for addition made u/s 69 of the Income Tax Act, 1961 as „unexplained investment‟ in respect of shares sold by the assessee.

“3. I have heard the parties and have perused the record. The additional ground raised in is a legal ground. The same is admitted. The facts relevant to the above said issues are that the department carried out a search and seizure operation on the premises of a person named as Shri Mukesh Chokshi, who admitted that he and his group of companies were engaged in the business of providing accommodation bills for purchase and sale of shares in order to enable the persons to generate the speculation profit / loss, short term capital gain and long term capital gains, etc. It was noticed that the assessee herein had also purchased shares from the group companies belonging to Shri Mukesh Chokshi. Hence, upon receipt of information in this regard, the AO reopened the assessment of this assessee for the years under consideration. The AO treated the purchase value of the shares as bogus purchases and assessed the same as income of the assessee. The AO also estimated the expenditure that could have been incurred by the assessee for getting accommodation bills of the purchase value and assessed the same as unexplained expenditure. The Ld CIT (A) dismissed the appeals filed by the assessee and hence they have filed these appeals before the Tribunal.

4. The Ld Counsel appearing for the assessee submitted that the assessee herein had sought for cross-examination of Shri Mukesh Chokshi, since the AO framed the assessment on the strength of the statement given by Shri Mukesh Chokshi. He submitted that the assessee was not afforded the opportunity to cross examine Shri Mukesh Chokshi. Accordingly, the Ld AR submitted that the AO should not made the additions by violating the principles of natural justice. Accordingly, he prayed that the assessee should be provided with adequate opportunity to cross examine Shir Mukesh Chokshi. The Ld AR submitted that the same would help the assessee to support the share transactions.

5. The Ld DR could not successfully rebut the plea put forth by the Ld AR, though he placed strong reliance on the impugned orders.

6. Having regard to the rival submissions, I am of the view that the AO was not justified in not affording the opportunity of cross examination to the assessee herein and the said action of the AO violates the principles of natural justice. Further, as submitted by the Ld AR, the assessing officer has made the impugned additions only on the basis of statement given by Shri Mukesh Choksi. Accordingly, I am of the view that the assessee herein should be provided with adequate opportunity to cross examine Shri Mukesh Chokshi. Accordingly, I set aside the order of the CIT (A) in respect of the additions referred above and restore them to the file of the AO with a direction to examine these issues afresh after affording adequate opportunity to the assessee to cross-examine Shri Mukesh Choksi and also after considering any other information and explanations that may be furnished by the assessee. The assessee, no doubt, shall cooperate with the AO in the fresh proceedings before him.