Tribunal grants appeals, stresses verification & natural justice in tax assessment.

The Tribunal allowed all eleven appeals for statistical purposes, emphasizing the need for proper verification of facts and adherence to principles of natural justice in the assessment proceedings. The case involved confirmation of additions made by the Assessing Officer under section 68 of the Act, application of section 69A, lack of reasonable opportunity of hearing, treatment of Short Term Capital Gain as business income, and the necessity for further verification of transactional facts. The Tribunal directed the issue to be restored back to the AO for proper investigation and required the appellant to provide necessary information within 30 days for verification.

---

---

Issues involved:
The issues involved in this judgment include confirmation of addition made by the Assessing Officer u/s.68 of the Act, application of sec.69A instead of sec.68, lack of reasonable opportunity of hearing, treatment of Short Term Capital Gain as business income, violation of principles of natural justice, and the need for further verification of facts regarding the transactions.

Confirmation of Addition u/s.68:
The AO made additions of &8377; 7 lakhs in the hands of each person based on information received from HDFC Bank regarding transactions through demand drafts. The AO noted that the drafts were consecutively numbered and made by different applicants from specific banks. Despite attempts to comply with the AO's requests, no satisfactory compliance was made, leading to the additions.

Lack of Reasonable Opportunity of Hearing:
The CIT(A) held that the AO was justified in adding the amounts due to the absence of addresses and identities of the persons from whom the loans were received. The appellant contended that the addition was made without providing copies of materials relied upon by the AO, thus violating principles of natural justice.

Treatment of Short Term Capital Gain:
The appellant argued that Short Term Capital Gain on sale of shares should be treated as such instead of business income, emphasizing that this ground was not raised before the CIT(A) but the facts were on record. The appellant sought a direction for the Assessing Officer to consider Short Term Capital Gain.

Further Verification of Facts:
After hearing both sides, it was deemed necessary to ascertain certain facts regarding the transactions. The AO did not verify the correctness of computer-generated accounts provided by the appellant, leading to the decision to restore the issue back to the AO for proper investigation. The appellant was directed to appear before the AO with requisite information within 30 days for verification.

Conclusion:
The Tribunal allowed all eleven appeals for statistical purposes, emphasizing the need for proper verification of facts and adherence to principles of natural justice in the assessment proceedings.

---