TaxTMI 
TaxTMI 
2016 (8) TMI 1133
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....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 cr....
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....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), 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 ....
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....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, 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/....
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.... during assessment proceedings. Even during the remand proceedings, the cross-examination could not materialize. In such circumstances it does not matter that Shri Mukesh 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....
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.... 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 compli....
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.... in respect of long-term capital gain. I have also heard the Ld. D.R. 6. 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 indica....
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.... 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 fur....
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....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." 7. After analyzing the afore mentioned orders, we found that the issue contained in the present case are similar to the issues of afore mentioned ....