TaxTMI 
TaxTMI 
2022 (4) TMI 893
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.... 1961 ( hereinafter, referred to as the 'Act'. Since there are common grounds involved in all the captioned six appeals, we dispose of them by this consolidated order for the sake of convenience and brevity. 3. Following common grounds are raised in ITA Nos. 1903 to 1907/Chny/2019 - 1. For that the order of the Commissioner of Income-tax (Appeals)2, Chennai is contrary to law, facts and circumstances of the case and is opposed to the principles of natural justice. 2. For that the Commissioner of Income Tax (Appeals) - 2 failed to appreciate that the order of the Assessing Officer is without jurisdiction. 3. For that the order passed u/s.143(3) is bad in law. For that the Assessing Officer erred in completing the assessment u/s.143(3). 4. For that the appellant had diligently declared the Capital Gains in the Statement of Account filed before the Ld. AO and is entitled for the exemption U/s. 10(38) of the Act. 5. For that the Appellant had submitted the details relevant to the assessment proceedings along with the evidences in support of the Long Term Capital Gains arose on sale of Shares as per the provisions of section 112 of the Inc....
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.... of the appellants case, erred in law in disallowing the claim of appellant claim of relief under section 10(38) of the Income Tax Act. 6. The learned CIT(A)-5 erred in law in not following the decision of the Jurisdiction Tribunal in the case of Nirav Kumar Mahendra Sapani and Kinner Prafulchand Sapani where in the facts are para material, in doing so the learned CIT(A) failed to uphold the principles of Judicial discipline. 7. The learned CIT(A)-5 and AO erred in law and facts in treating the transaction of purchase of shares as Off market despite providing salient evidences such as Purchase contract through recognized stock exchange vide contract note. The said uncontroverted evidences are overlooked by the assessing officer without any rhyme of reason. 8. The learned CIT(A)-5, erred in law and facts in not sending the notice of hearing to the appellant, thereby violating the principle of natural justice. 9. The learned assessing officer as well as the CIT(A) erred in relying on a certain pattern of bogus claim which is totally irrelevant to facts of the appellants. The learned lower authorities erred in relying on investigation in the case of....
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....1, Chennai by issuance of a notice dtd. 09-11-2016. Assessee sold 7500 shares of Bakra Pratisthan Limited and realized long term capital gain (LTCG). In her e-filed return of income, the assessee reported an amount of Rs. 24,82,748/- in the details of Exempt Income [LTCG on which STT is paid u/s 10(38) of the Act)]. Ld. AO disallowed the claim of exemption u/s 10(38) by holding that the assessee entered into an engineered transaction to generate artificial LTCG on sale of shares which fall under the category of penny stocks. Ld. AO based his decision of treating the impugned transaction of sale of shares as bogus transaction by relying on the report of Directorate of Income-tax (Investigation), Kolkata wherein the Investigation Wing of the Department has studied the modus operandi of rigging the prices of penny stocks and generation of capital gain there from. Before the Ld. AO, the assessee furnished the evidences for sale of 7500 shares of said company, M/s. Bakra Pratisthan Ltd sold for a consideration of Rs. 24,82,748/- through Shri Ashok Kumar Kayan, Kolkata. The AO found that the assessee purchased 7500 shares of said company from M/s. Akashgnaga Polyplast P. Ltd. for Rs. 1,5....
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....is of any inquiry under sub-section (2) or any audit under sub-section (2A) and proposed to be utilized for the purposes of the assessment. Ld. Sr. DR did not controvert on the factual position vis-à-vis section 142(3) (supra) about non-supply of the relevant material to the assessee in the course of assessment proceedings for its cross verification and cross examination and urged before the Bench for liberty to file a written submission for his contentions along with relevant documentary evidences. In the light of this submission by the Ld. Sr. DR and provisions of section 142(3) of the Act, further specific query was raised by the Bench as to why this issue be not restored to the file of the Ld. AO for which the Ld. Sr. DR placed reliance on the decision of Hon'ble Jurisdictional High Court of Madras in the case of CIT, Chennai v. Mrs. Manish D. Jain (HUF) in TCA No. 223 of 2020, order dated 16.12.2020. Bench heard the matter and granted liberty to the Ld. Sr. DR for filing a written submission as requested along with providing a copy to the Ld. AR. 10. Ld. AR representing the matter before us in ITA No. 1970/Chny/2018 submitted that the Ld. AO had extensively relied....
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....rom Para 27 of the judgment that the Hon'ble High Court stated, "As pointed out in the decision of this Court in the case of Cholamandalam MS General Insurance Co., we find in the instant case that there was no material, which necessitated the remand of the case to the Assessing Officer and it is a clear case where the Tribunal had failed to exercise its jurisdiction in the manner known to law. The Tribunal, being a last fact finding Authority, is under the legal obligation to record a correct finding of fact." [emphasis supplied by us]. In the present case before us, it is an uncontroverted factual position accepted by the Ld. Sr. DR on the material made available to the assessee vis-à-vis requirements of provisions of section 142(3) of the Act. Furthermore, copy of investigation report of the Investigation Wing, Kolkata extensively relied upon by the Ld. AO is furnished before the Bench and made available to the Ld. AR now, for the first time. We note that compliance of provisions of section 142(3) is a mandatory statutory requirement in completing the assessment proceedings failing which may vitiate the entire assessment itself since this sub-section uses the word 'sha....
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....he judgment of Hon'ble Kanataka High Court in the case of Chandra Devi Kothari (supra) it is seen that matter was restored back to the file of the AO for fresh decision after providing copy of the statement and other related details relied upon by the AO); in this case copy of the Report of Kolkata Investigation Directorate and other attendant details. As per the facts noted by the High Court in the earlier paras of judgment (supra) and as per the facts of the case on hand, there appears to be no difference in facts and therefore by respectfully following this judgment in the case of Chandra Devi Kothari (Supra), I set aside the impugned order of learned CIT(A) for Assessment Year 2014-15 and restore the matters to the file of the AO for fresh decision with the same directions as were issued by the Hon'ble Karnataka High Court in the case as per Para No.8 of the judgment reproduced above. In view of this decision, no adjudication is called for at this stage regarding the merits of the addition." ITA No.650/Bang/2019 As the facts prevailing In the instant case is identical nature, following the aforesaid decision of the Tribunal, we set aside the order passed by the learned ....
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....nd issues raised in respect of transaction of sale of shares in other appeals are common and identical to that of ITA No. 1903/Chny/2019 for A.Y 2011-12 which we have already discussed/disposed of as above and therefore following the same ratio of our aforementioned decision, the other appeals, viz. ITA Nos. 1904 to 1907/Chny/2019 and ITA No. 1970/Chny/2018 in respect of other captioned assessee are allowed for statistical purpose. 16. In respect of Ground No. 8 in ITA Nos. 1906 & 1907/Chny/2019 relating to addition made by the Ld. AO towards alleged commission paid by the assessee on the sale transaction of shares, we find that it is consequential in nature to the above finding and observations on the issue of sale transaction of shares and is accordingly disposed of as allowed for statistical purpose. 17. Ground no. 10 in ITA No. 1970/Chny/2018 relates to addition made by Ld. AO of Rs. 1,20,000/- towards inadequacy of drawings and confirmed by the Ld. CIT(A). Total drawing of the family were Rs. 1,26,102/- which comes to approx. Rs. 10,000/- per month for the whole family. Before us, Ld. Counsel for the assessee could not explain how the drawing of Rs. 10,000/- per month wo....