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Income Tax Appellate Tribunal, MUMBAI BENCH ‘F’, MUMBAI
Before: SHRI JASON P BOAZ & SHRI SANDEEP GOSAIN
PER SHRI SANDEEP GOSAIN, JUDICIAL MEMBER
The present appeal has been filed by the revenue against the order of CIT(A)-28,Mumbai dated 27-03-2014 in Appeal No.CIT(A)- 28/ITO.26(2)(2)/417/10-11 for the assessment year : 2003-04 on the following grounds;
“1. Whether on the facts and in the circumstances of the case and in law, the CIT(A) erred in law in deleting the addition of Rs.43,52,980/- by holding that the assessee was not granted the opportunity of cross
ITA No.4209(Mum)/2014 2 examination of Shri Mukesh Choksi, Managing Director of Mahanagar Securities Pvt.Ltd. without appreciating that the powers of CIT(A) are co-terminus with the powers of Assessing Officer and he could have given the opportunity of cross examination of Shri Mukesh Choksi to the assessee instead of pointing out the lacuna in the remand report of the Assessing Officer and consequently deleting the addition. This is supported by the decision in the case of CIT Vs Kanpur Coal Syndicate (53 ITR 225 (Hon'ble Supreme Court) (1964), Jute Corpn. Of India Ltd Vs CIT (53 Taxman 85 (Hon'ble Supreme Court) (1990) & CIT Vs K.S. Dattreya (197 Taxmann 151 (Kar.) (2011).
2. On the facts and circumstances of the case the ld. CIT(A) has erred in deleting the addition of Rs.43,52,980/- made under the head of income from other sources, income from undisclosed sources.
3. On the facts and circumstances of the case the ld. CIT(A) has erred in not appreciating the findings of the Assessing Officer’s remand report as well as DDIT(Inv.) Unit-1(4), Mumbai.
4. On the facts and circumstances of the case, the ld. CIT(A) has erred in not considering the discrepancies and shortcomings pointed out by the Assessing Officer in remand report for unexplained investment in purchase of shares of M/s Buniyad Chemicals ltd., 5. The appellant prays that the order of the ld. CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored.
6. The appellant craves leave to amend or to alter any ground or add a new ground”.
ITA No.4209(Mum)/2014 3
The facts of the case are that the assessee filed his return of income declaring total income of Rs.1,37,050/-. The case was re-opened u/s 147 of the IT Act, pursuant to information received from the DDIT(Inv.)-1(4), Mumbai and after serving statutory notices u/s 142(1) of the IT Act, 1961 upon the assessee. It was found by the Assessing Officer that in this case, the information was received from DDIT(Inv.)-1(4), Mumbai that the assessee was involved in purchase of entries of shares profit of Rs.43,52,980/-. The assessee was asked to explain the sources of the same and since the ld. AR could not give satisfactory explanation to the AO, therefore, the AO while taking into consideration the statements recorded of Shri Mukesh Choksi by the DDIT(Inv.)-1(4), reached to the conclusion that the assessee has invested his own money from his undisclosed sources into shares and then he sold the same in the open market to avail the benefit of long term capital gains. The AO held that the amount of Rs.43,52,980/- to be assessee’s income from undisclosed sources and therefore, added the same to the total income of the assessee vide order of assessment dated 29-12-2010.
Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A) and the CIT(A) after considering the case of both the parties, partly allowed the appeal; filed by the assessee and deleted the additions of Rs.43,52,980/- and treated the profit on the sale of shares to be long term capital gains vide order dated 27-03-2014.
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Aggrieved by the order of the ld. CIT(A) the revenue preferred the present appeal before us on the grounds mentioned above. ]
5. Ground nos.5 & 6 are general in nature and it does not require any specific adjudication.
6. Ground nos. 1 to 4 in this appeal are inter-connected and inter- related therefore, we deem it proper to adjudicate these grounds together.
These grounds of appeal of the revenue relates to the issue of deleting the addition of Rs.43,52,980/- made under the head “ Income from other sources”.
7. We have heard the counsel for both the parties and we have also perused the material placed on record as well as the orders passed by the revenue authorities. The ld.CIT(A) while dealing with these grounds has deciding the same in par-3.3 of his order and the same is reproduced hereunder;
“ 3. 3 I have considered the submission of the AR and order of the AO as well as remand reports and rejoinder. It has been clarified by the AO, vide letter dated 04.01.2012 that the assessee's case was originally with ITO 16(1)(1), Mumbai and the PAN was also lying with him only. Accordingly, he issued notice u/s.148. Notice u/s 143(2) dated 26/05/20 I 0 was also issued by him for initiating scrutiny assessment proceedings, which was duly served on the assessee. Thereafter when the matter' was brought to his attention, he transferred the file to ITO 26(2)(2),
ITA No.4209(Mum)/2014 5
Mumbai where the assessee was currently assessed, who then conducted the assessment proceedings and passed the assessment order. Therefore the notice issued u/s.148 and the assessment proceedings are legally valid. Regarding not providing opportunity of being heard and notice u/s.142(1) not being served, the explanation provided by the AO vide report dated 04/01/2012 brings out that the original notice u/s.142( I) was issued on 09.12.20 LO and was .served by Speed Post, fixing the hearing on 16.12.20 I O. Shri. Deepak Shah, CA attended on w0.12.2010 to whom also a copy of the said notice was handed over. He requested for time and the case was adjourned to 24.12.2010 on which date no one attended. Shri Deepak Shah attended on 27.12.2010 on which date no one attended. Shri Deepak Shah attended on 27.12.2010 on which date no one attended. Shri Deepak Shah attended and filed details. Thus it cannot be said that opportunity of being heard was not given to the appellant. These and other technical objections raised by the appellant have been sufficiently met by the AO in his 'report dated 04.01.2012. It is therefore held that the reopening of the case was done by following due procedure and is legally valid as also the assessment order passed. Ground of appeal no.l to 5 are therefore dismissed. Similarly the objections raised by the AO in final remand report dated 26/02/2014 have been sufficiently met by AR in their rejoinder dated 22/03/2014. The AO has pointed out a number of discrepancies and shortcomings in the assessee's explanation regarding the ITA No.4209(Mum)/2014 6 share transactions, especially w.r.t. scrips of Buniyad Chemicals.' It is alleged that since the shares were stated to be financed out of speculative profits and the assessee did not pay for these shares separately, the purchase is doubtful. This and the discrepancy pointed out in para 2.1 and para 3 regarding the number of scrips sold leading 10 share profit of Rs 1,67,3301-, has been clarified satisfactorily by the AR in rejoinder dated 22/03/2014 that there is no real difference . and the confusion is only due to poor drafting. With respect to the discrepancy pointed out by the. AO in para 3. l, para 6, 6.1 and para 6.2 regarding the market rates of scrips bought and sold being very different from what is shown in the bills submitted by the appellant, it is seen that these bills leading to share profits relate to AY 2002-03 and not to the year under consideration. Accordingly, the effect of the discrepancies has to be considered in AY 2002-03 only, for which the AO is 'free to t¥<e-necessary action as per law. The contention of the AO in the concluding paragraph to enhance the income of the assessee for AY 2002-03 by Rs 33,732 for unexplained investment in shares of Buniyad Chemicals . It is alleged that since the shares were stated to be financed out of speculative profits and the assessee did not pay for these shares separately, the purchase is doubtful. This and the discrepancy pointed out in para 2.1 and para 3 regarding the number of scrips sold leading to share profit of Rs.2,67,330/-, has been clarified satisfactorily by the AR in rejoinder dated 22/03/2014 that there is no real difference and the confusion is only due to poor drafting. With respect to the discrepancy pointed out by the Assessing Officer in para 3.1, para 6,
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6.1 and para 6.2 regarding the market rates of scrips bought and sold being very different from what is shown in the bills submitted by the appellant, it is seen that bills leading to share profits relate to Assessment Year 2002-03 and not to the year under consideration. Accordingly, the effect of the discrepancies has to be considered in Assessment Year 2002-03 ONLY, for which the Assessing Officer is free to take necessary action as per law. The contention of the Assessing Officer in the concluding paragraph to enhance the income of the assessee for Assessment Year 2002-03 By Rs.33,732 for unexplained investment in shares of Bunihad Chemicals cannot be considered in appellate proceedings of Assessment Year 2003-04. The contention of Assessing Officer to confirm the addition of Rs.43,22,591/- (read Rs.53,52,980/-) as ‘Íncome from other sources’’, is decided as under: From the assessment order it is seen that the explanation submitted by the assessee in response to the show cause notice as to why the LTCG shown be not treated as 'income from undisclosed sources', has been brushed aside by the AO without bringing out any valid argument or reason. No shortcoming or inconsistency has been pointed out. in the explanation furnished and it has been rejected outright. The assessment order is a single page cryptic order in which the addition of Rs.43,52,980/- has been made to the returned income, which is primariIy based on the statement of Shri. Mukesh Choks] recorded by the DDlT (Inv.) 1(4), Mumbai. A copy of this statement was not provided to the assessee during the course of assessment proceedings, despite his asking for it specifically. Although a copy of the statement has provided
ITA No.4209(Mum)/2014 8 during remand proceedings, no opportunity of cross examination has provided - neither during assessment proceedings nor during remand proceedings. From the assessment order it is seen that the basic 'and sole reason for initiation assessment proceedings and the completion of assessmenttreating the long-term gain as undisclosed income under section 69A, was the statement of Shri Chokshi only. No independent inquiry seems to have been done by the Assessing Officer to verify whether the statement of Mukesh Chokshi admitting to issuing bogus bills, was correct in the case of the assessee or not, especi~1ly when the assessee had vehemently denied the same during assessment proceedings and had submitted relevant details and bills. In the light of these facts, the allegation of the appellant that the Assessing Officer has approached the issue with a predetermined mind has some force. Further when the Assessing Officer was solely basing his decision on the statement or Shri Mukesh Chokshi, which the assessee had denied/contested during assessment proceedings, it was incumbent on the Assessing Officer to have provided a copy or that statement to [he assessee and to have provided him an opportunity for cross-examination, before arriving at a decision. It is undisputed that the copy. of statement of Shri Mukesh Chokshi was not provided to the assessee before conclusion of the assessment and no opportunity for his cross-examination was accorded during assessment proceedings. Even during the remand proceedings, the cross-examination could not materialize. In such circumstances it does not matter that Shri Mukesh
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Chokshi continues to stick to his statement given during search that he was giving accommodation entries to the persons seeking such entries, when .seen against the absence or corroborative evidence and the absence of opportunity for cross-examination by the assessee, being used against him without giving him an opportunity to cross-examine and rebut the allegations. This is certainly against the principles of natural justic4e and an addition made in this manner cannot be upheld. The AR has also pointed out that in a subsequent statement Sri Mukesh Choksi has confirmed the genuineness of the share transactions in the case of Sri Madan Kothari and has clarified that the statement given by him before DDIT(lnv) was a general statement and did not apply in that case. Thus statement of Shri Mukesh Chokshi cannot be relied upon blindly without due verification in each case. Thus, statement of Shri Mukesh Chokshi cannot be relied upon blindly without due verification in each case, which the Assessing Officer has failed to do. The decision of jurisdictional High Court in the case of Mukesh R Marolia 6 SOT 247 (Mum) and of Mumbai ITAT in the cases of Mayur M. Shah HUF vs. ITO 25 (3) (I),Mumbai No.2390/Mum/2013 and Hetal K Vasa Vs. ITO 21(1)(3), Murnbai ITA 0.6416/Mum/2012 and Hansa H Vasa Vs.ITO 0 21 (I )(3), Mumbai cited by the AR also cover the issue in favour of the assessee. In view of all the above it is held that the action of the Assessing Officer in treating the long-term capital gain shown as income from undisclosed sources, to the extent of Rs. 43,52,980/- and not granting deduction u/s 54F is not correct and is therefore directed to be deleted. The profit on sale of impugned shares is to be brought to tax as Long Term Capital Gain, as shown in the return and deduction u/s 54F is to be allowed. Grounds of appeal number 6 to 8 are therefore allowed to this extent. Since no ground of appeal is added/altered/deleted ground of appeal number 9 is disposed off as dismissed”.
8. Even during the course of argument the ld. DR argued that the CIT(A) had erred in law in deleting the additions by holding that the assessee was not granted the opportunity of cross examination of Shri Mukesh Choksi, MD of M/s Mahasagar Securities Pvt. Ltd., without appreciating that the powers of ld. CIT(A) are co-terminus with the powers of AO and hence the CIT(A) could have given the opportunity of cross examination of Shri Mukesh Choksi to the assessee instead of pointing out the lacunae in the remand report of the AO and then making the same basis for deletion. The ld. DR in order to support his arguments had relied upon the decision in the case of CIT Vs Kanpur Coal Syndicate (53 ITR 225(SC) (1964) Jute Corpn.of India Ltd Vs CIT (53 Taxmann 85 (SC)(1990)
& CIT Vs K.S.Dattreya (197 Taxmann 151 (Kar) (2011). The ld.DR further argued that the CIT(A) has not appreciated the findings of AO’s remand report as well as the DDIT(Inv.) and has only considered the discrepancies and shortcomings pointed out by the AO in remand report for unexplained investments in purchase of shares of M/s Buniyad Chemicals Ltd.,
On the other hand, ld. AR appearing on behalf of the assessee relied upon the orders passed by the ld. CIT(A). The ld. AR has drawn our attention to page no.21 & 22 of the paper book, which contains copy of purchase bills of M/s Buniyad Chemicals, through broker of M/s Gold Star Finvest Pvt. Ltd., and copy of sale bill of M/s Buniyad Chemicals Ltd., at page no.23 to 40 of the paper book. The ld. AR has also drawn our attention to page no.41 to 45 which contains copy of the statement of Shri Mukesh Choksi, given by the AO during the course of remand report.
Further our attention was also drawn to page no.46 to 48 of paper book which contains the statement of Shri Mukesh Choksi, recorded by the ITO- 17(1)(2). As per the ld. AR, the AO has passed the order of assessment primarily basing on the statement of Shri Mukesh Choksi, recorded by the DDIT(Inv.)(1)(4) Mumbai and submitted that even the copy of the said statement was not provided to the assessee during the course of assessment proceedings, although, the said copies were demanded by the assessee on various occasions. Lastly the said copy of statement was provided to the assessee during the remand proceedings. However, even then no opportunity of cross examination of the said Shri Mukesh Choksi was ever provided by the AO either during the assessment proceedings or during the remand proceedings hence the initiation of re-assessment proceedings and compliance of assessment thereby treating the long term capital gains as undisclosed income u/s 69A was based on the solitary statement of Shri Mukesh Choksi. The ld. AR relied upon the decision of the Co-ordinate Bench of ITAT Mumbai in the assessment year 2003-04 in the case of Shri Kamlesh Mundra Vs ITO, in which the Judicial Member is the author of the said order. By referring to the said order, ld. AR submitted that the issue in the aforementioned case was also similar to the issue involved in the present case.
After hearing the counsel as well as the order passed by the revenue authorities, we have observed that the Co-ordinate Bench of ITAT, Mumbai had already dealt with the similar issue in the case of Shri Kamlesh Mundra vs. ITO in for the assessment year 2003-04. The operative portion of the decision of the Hon’ble ITAT in the aforementioned case is as under; “6. We have heard the counsels for both the parties and we have also perused the material placed on record as well as the orders passed by the lower authorities and after considering the same, we have observed that the co-ordinate Bench of ITAT ‘Mumbai’ has already dealt with the similar issue in ITA No. 1175/Mum/2012 and ITA No. 1176/Mum/2012 where in also the assessee’s in those cases have dealt with the share transaction with the same companies. We referred the operative para of ITA No. 1175/Mum/2012 titled “Smt. Durgadevi Mudra vs. ITO” and the same is reproduced here in below:
“I have heard the parties and perused the record. The Ld. Counsel submits that in respect of the 'Shares Scam' alleged to be involved by Shri Mukesh Chokshi actions were taken against many persons disallowing their claim in respect of long-term capital gain and short term capital gain. He submits that on identical set of facts the issue has been considered by the Tribunal. The Ld. Counsel filed the copies of the Tribunal decision by way of compilation as under: i) Mukesh R. Marolia vs. Addl. CIT -6 SOT 247 ii) Rajnudevi Chowdhary vs. ITO -ITA 6455/M/2007(Bom) iii) ITO vs. Truptic Shah -ITA 6455/M/2007(Bom) iv) Chandrakant Babulal Shah -ITA 6108/M/2009(Bom) v) ACIT vs. Shri Ravindrakumar Thshinwal -ITA5302/M/2008(Bom)
He, therefore, pleaded for accepting the claim of the assessee in respect of long-term capital gain. I have also heard the Ld. D.R.
I find that in the present case, the assessee has produced the bills showing the purchase of the shares. The assessee also proved that the shares were sold through the share broker and he produced the proof for the same. The identical situation has been considered by the ITAT ‘C’ Bench, Mumbai in the case of Chandrakant Babulal Shah (supra). The operative part of the order of the Tribunal is as under: '7. We have considered the submissions of the rival parties and examined the record. The case relied upon by the learned Counsel are not directly applicable to the facts of the case as in those cases the sale proceeds are treated as undisclosed
income denying the entire transaction as such, whereas, in the present case, the Assessing Officer did not treat the sale of shares as bogus. He has only examined the purchase of shares and doubted the date of purchase. But in the computation he has given benefit to the same cost of purchase of shares and taxed the long term capital gain offered as short term capital gain only. As far as the date of purchase is concerned, the evidence on record indicate that the assessee had indeed earned speculation profit by sale of APTECH shares which the Assessing Officer has not doubted. Further the assessee also suffered speculation loss as stated above in February, 2001 and debit and credit entries pertaining to same broker were shown in the balance sheet in the return filed for the AY 2001- 2002 in August, 2001. There is also a mention of purchasing of shares of the company in the return. It is also on record that the said company vide letter dated 30-6-2000 had transferred the shares in the name of the assessee with the folio No. 15021 and certificate Nos. 105744 to 105848. The Assessing Officer neither questioned the said company nor disproved the transfer of share certificates by 30/6/2000. The only basis for arriving at the conclusion that the transaction is not genuine is on the basis of the statement given by Mr. Mukesh Chokshi on 20-6-2004/20-6-2002 before the DDIT (Inv.) with reference to certain transactions undertaken by Mr. Mukesh Chokshi and his group of companies, mainly Gold Finvest Pvt. Ltd. Richmond Securities and Alembic Securities, which are dealing in interconnected stock exchange/ NSC. Most of the enquiries pertains to the transactions in interconnected stock exchange and sale of shares In the company viz., Rashel Agro Tech Ltd. The enquiry in the said group of companies was with reference. to the issuance of bogus , purchase and sale bills and accommodating various parties in earning the capital gains. However, as submitted by the learned Counsel, the assessee's name is not figuring in the transactions which were originally enquired by the DDIT (Inv.) on 26-4-2002. Even though the modus operandi was explained and stated that they were getting 0.5% commission in arranging the transactions, nothing was concluded against the assessee in the said statement. The Assessing Officer in the course of assessment again recorded the statement under section 131 on 9-11-2006 in which question No. 4 and 5 which are extracted in the assessment order itself. The main reliance is on question No. 5 which is as under: "Q.5 : Please give the details of bills of profit issued by your company as stated above. Ans: These bills numbers Bills No. CC/2000/16/12501 dt.18-4-2000 which shows that B.87610.85 payable to Shri Chandrakant D. shah. There is another Bill No. CC/2001/07/164 (N) dt.20/2/2001 in which Rs.89602 was receivable by Shri Chandrakant B. Shah. These bills are issued showing fictitious profit and therefore the purchase are not substantiated by genuine payments." "8. This statement was relied upon by the Assessing Officer to state that the purchase bills are issued showing fictitious profit. However, the assessee was not given an opportunity to cross examine Mr. Mukesh Chokshi and when an opportunity was given and assessee was present Mr. Mukesh Chokshi was not available. The only basis for this above statement is that the payments are not made immediately but even statement itself indicate that they were capital gains earned by the assessee as speculation profits and in question No. 4 in the statement Mr. Mukesh Chokshi admits the purchase of 10500 shares of Rashel Agro Tech, Ltd. made out of adjusted share profits and therefore confirmed that this is an 'adjustment transaction). In view of this statement in question Nos. 4 and 5) we are unable to understand how the transactions becomes a bogus one. There is no evidence except this oral statement which is also not submitted for cross-examination to prove/ disprove the transaction. Whereas the assessee furnished transaction details) the bank accounts) purchase and sale of other listed companies) speculation profit and loss and also evidence in the form of balance sheet filed much before the said shares were sold. The sale of shares was undertaken in December 2001 whereas the return for AY 2001-2002 was filed by August 2001 itself indicating the purchase of shares and outstanding amounts to M/ s. Golden Finvest Ltd in the statements. In view of the documentary evidence in favour of the assessee, we are unable to accept the contention of the Assessing Officer based on the statement which is also un supported by any other evidence to deny the benefit of purchase of shares by the assessee on 8-4-2000. Not only that the Assessing Officer has also gave credit for the same amount of purchase of shares at cost and did not treat the sale proceeds as bogus/unaccounted income. The only action taken by the Assessing Officer is to deny the assessee the benefit of long term capital gain and subsequent deduction under section 54EC of the Act as the assessee invested the capital gains in REC Bonds. We do not see any reason to agree with the findings of the' Assessing Officer and also the findings of the CIT (A). In fact, the CIT (A) has went ahead in treating the entire transaction as bogus and confirmed the action of the Assessing Officer while holding "this will be more for an unexplained receipt of money of the appellant. Hence, Assessing Officer had rightly added the amount by and the action of the Assessing Officer in making this addition is confirmed treating it as STCG)). In arriving at this conclusion, the CIT (A) presumed that assessee could have paid full payment of 16 lakhs by way of cash which was not the case of the Assessing Officer either. There is no evidence even to presume these observations of the CIT (A) as stated above.
7. The facts are identical in this case as in the case of Chandrakant Babulal shah (supra). I hold that the assessee has proved the genuineness of the share transactions and there is no justification to disallow the claim of the assessee in respect of the long-term capital gain. I, accordingly, direct the A.O. to allow the same. Accordingly, ground no.2 is allowed. Assessee's appeal is partly allowed.” In addition we have also analyse the orders passed in titled “Shri Mahesh Mundra vs. ITO” the operative para is reproduced here in below: “I have heard the parties. In this case also the assessee has declared the long-term capital gain in respect of the sale of the shares of M/ s. Buniyad Chemicals Ltd. It was claimed that the shares were sold through M/ s. Goldstar Finvest Pvt. Ltd. There was investigation against Shri Mukesh Chokshi who was the mentor and the main person in the entire shares' 'Scam'. The facts are identical as in the case of Smt. Durgadevi Mundra in ITA No.1175/M/2012. Hence, to avoid the repetition of the facts and for the sake of brevity, I adopt the facts mentioned in the case of Smt. Durgadevi Mundra as well as the reasons. In this case also the A.O. assessed capital gain declared by the assessee as 'income from other sources'. I, therefore, following my reasons and decision in the case of Smt. Durgadevi Mundra (supra) allow ground no.2 in this appeal also and direct the A.O. to assess the long-term capital gain declared by the assessee as such and accept the same.”
After analyzing the afore mentioned orders, we found that the issue contained in the present case are similar to the issues of afore mentioned cases. Therefore, keeping in view the principles of judicial consistency and while respectfully following the judgements passed by the co- ordinate bench, We also hold that in the present case by virtue of independent documents as referred in paper book the assessee has proved the genuineness of the share transaction and there was no justification to disallow the claim of the assessee in respect of long term capital gain merely on the basis of information received from DDIT which is based on admission of Shri Mukesh Chokshi. Therefore accordingly, we direct the AO to assess the long
term capital gain declared by assessee as such and accept the same.
Apart from analyzing the aforesaid order, we have also noticed in paper book at pages 11 & 12 wherein specific directions were given by the ld. CIT(A) to the AO to provide opportunity of cross examination to the assessee. But even inspite of that no opportunity of cross examination was ever granted by the AO to the assessee. During the course of argument, we have put this specific question to the ld. DR who appeared on behalf of revenue, but the ld. DR appearing on behalf of the revenue was unable to give any satisfactory reply as to why the AO has not complied with specific direction for allowing the assessee to cross examine such person as per directions given at page no.11 & 12 of paper book. After conjoint reading of the orders passed by the CIT(A) in the present case as well as the earlier orders by the Hon’ble ITAT, Mumbai Bench in similar case and an after taking into consideration the documents relied upon by the assessee, we are of the considered view that the ld. CIT(A) has rightly pointed out that the assessment order is single page cryptic order in which the addition of Rs.43,52,980/- has been made to the returned income, which is primarily based on the solitary statement of Shri Mukesh Choksi recorded by the DDIT(Inv.)(1)(4), Mumbai. The led. CIT(A) has also rightly considered the factual position of the present case, wherein no independent enquiry has been done by the AO to verify whether the statement of Shri Mukesh Choksi admitting to issuing bogus bills was correct in the case of assessee or not by providing an opportunity of cross examination to the assessee of such person and therefore, in such circumstances in the present case, the statement of third party i.e. Mukesh Choksi recorded at the back of the assessee cannot be used against him without giving the assessee an opportunity to cross examine and rebut the allegation. In the peculiar facts of the present case, we have also noticed that the AO has not fully complied with the directions given by the ld. CIT(A) as per page No.11 & 12 of the paper book.
Apart from the above observations, we found that the issue contained in the present case which is similar to the issues of the cases already decided by the ITAT mentioned above. Therefore, keeping in view, the principles of judicial consistency and while respectfully following the judgments passed by the Co-Ordinate Benches, we also hold that the ld.CIT(A) has passed a well reasoned speaking order and no new circumstances of facts have been brought before us to deviate from or to interfere into well a reasoned and judicious findings recorded by the ld. CIT(A). During the argument in the present case, we have noted that the AO has not complied with the specific direction issued by the ld. CIT(A), as discussed above and because of non-compliance on the part of A.O. The CIT(A) has deleted the addition. Hence in these circumstances we express our displeasure towards the attitude of AO in not complying with the directions issued by CIT(A)) and this inaction and laxity ultimately led to deletion.
In the result, the appeal filed by the revenue is dismissed.
Order pronounced in the open Court on the 10th August,2016.