ANIL KUMAR HUF,CHENNAI vs. ITO, CHENNAI

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) – 5, Chennai, dated 09.06.2016 and pertains to assessment year 2009-10.

Shri Lakshmichand Nahata, the Ld. representative for the assessee, submitted that the Assessing Officer made an addition of `9,49,569/- on the ground that there was a bogus purchase and sale of shares and the assessee has introduced its own money.

On the contrary, Shri B. Sahadevan, the Ld. Departmental Representative, submitted that the CIT(Appeals) examined the issue and found that the assessee has not produced any evidence to prove the purchase and sale of shares on which the long term capital gain of `9,49,569/- was reported. In the absence of any evidence for purchase and sale of shares, the Assessing Officer found that the assessee introduced his own money. Referring to the order of the CIT(Appeals), more particularly para 6.1, the Ld. D.R. submitted that even after giving eight opportunities by the CIT(Appeals), the assessee could not produce the evidence, therefore, the CIT(Appeals) has rightly confirmed the addition made by the Assessing Officer.

We have considered the rival submissions on either side and perused the relevant material available on record. The Assessing Officer made an addition of `9.49,569/- towards purchase and sale of shares. The Assessing Officer has also found that the assessee purchased shares on 04.04.2007 and 18.04.2007 and the same was dematised on 16.08.2008. On the basis of the statement said to be made from Shri Choksi, Director of Mahasagar group of concerns, the Assessing Officer found that the entire transaction was not genuine. She also found that it was only an accommodation entry and the assessee brought his own unaccounted money in the guise of long term capital gain. The assessee also could not file any evidence before the CIT(Appeals) to substantiate the claim of purchase and sale of shares. Therefore, the CIT(Appeals) confirmed the addition of `9,49,569/-. From the material available on record and from the orders of the lower authorities it appears that the statement recorded from Shri Choksi was not furnished to the assessee. This Tribunal is of the considered opinion that when the Assessing Officer has made addition on the basis of the statement said to be made from Shri Choksi, Director of Mahasagar group of concerns, a copy of such statement should have been furnished to the assessee and an opportunity must have been given to the assessee to contradict the same. Since such an exercise was not done, this Tribunal is of the considered opinion that the matter needs to be reconsidered.

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