Tribunal grants assessee chance to present defense, restores case to Assessing Officer. Appeals allowed for statistical purposes.

The Tribunal restored the case to the Assessing Officer for fresh adjudication, providing the assessees with an opportunity to present their defense properly. The appeals were allowed for statistical purposes, with the order announced on November 2, 2015.

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Issues Involved:
1. Genuineness of the Long-Term Capital Gain (LTCG) on the sale of shares.
2. Validity of the documents provided by the assessee.
3. Reliance on the statements of Mukesh Choksi.
4. Opportunity for cross-examination.
5. Applicability of Section 68 of the Income Tax Act, 1961.
6. Requirement of furnishing relevant materials to the assessee.
7. Factual determination of the transactions.

Detailed Analysis:

1. Genuineness of the Long-Term Capital Gain (LTCG) on the Sale of Shares:
The primary issue in these appeals concerns the genuineness of the LTCG on the sale of shares. The assessees provided documents such as bills, contract notes, De-mat accounts, and bank statements to establish the validity of their claims. However, the Revenue initiated proceedings based on the deposition of Mukesh Choksi, whose companies were alleged to provide bogus transactions. The Tribunal noted that the assessees' names did not appear in Choksi's statements, but this was deemed irrelevant as the entire business of Choksi's companies was considered sham.

2. Validity of the Documents Provided by the Assessee:
The Tribunal questioned the credibility of the documents provided by the assessees, noting that the registration of the broker involved was canceled, and the transactions were not carried out through the stock exchange. The Tribunal emphasized that the contract notes should be time-stamped and bear the unique identification number (UIN) of the client, which was not evident in this case.

3. Reliance on the Statements of Mukesh Choksi:
The Revenue relied heavily on the statements of Mukesh Choksi, who admitted that his companies provided accommodation entries. The Tribunal observed that the assessees were aware of these statements but had not been formally provided with copies. The Tribunal found that the statements were crucial to the Revenue's case and that the assessees' objection to not being named in the statements was of little consequence.

4. Opportunity for Cross-Examination:
The Tribunal noted that the assessees' plea for cross-examination of Mukesh Choksi was misconceived. Since the assessees relied on documents provided by Choksi's companies, he was effectively their witness. The Tribunal held that the assessees should have produced and examined Choksi to rebut the Revenue's reliance on his statements.

5. Applicability of Section 68 of the Income Tax Act, 1961:
The Tribunal emphasized that the burden of proof under Section 68 lies on the assessees to satisfactorily explain the nature and source of the credit. The Tribunal cited several legal precedents to support this position, noting that the issue is whether the assessees have satisfactorily proved the impugned credit.

6. Requirement of Furnishing Relevant Materials to the Assessee:
The Tribunal acknowledged that the assessees are entitled to be furnished with copies of all materials relied upon by the Revenue. The Tribunal found that the Revenue had not provided all relevant facts and that the assessees should be given an opportunity to set up their defense.

7. Factual Determination of the Transactions:
The Tribunal observed that the facts of the case had not been thoroughly analyzed by the Revenue. Several questions regarding the nature of the transactions, the basis of purchase and sale prices, and the identity of buyers and sellers needed to be addressed. The Tribunal held that a factual determination was necessary to decide whether the transactions were genuine and whether Section 68 applied.

Conclusion:
The Tribunal restored the matter to the file of the Assessing Officer for fresh adjudication, allowing the assessees proper opportunity to state their case and meet the Revenue's case. The appeals were allowed for statistical purposes, and the order was pronounced in open court on November 2, 2015.

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