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Asha D Vora, 1/42, Tardev A/c Market, Tardeo Road, Mumbai-400034 Vs. Income Tax Officer 16(1)(4), Mumbai
September, 02nd 2015
        ,   "- " 
 IN THE INCOME TAX APPELLATE TRIBUNAL, SMC BENCH, MUMBAI

       BEFORE S/SHRI B.R.BASKARAN,AM AND LALIT KUMAR, JM

           ./I.T.A. No.3143 and 3144/Mum/2015
       (   / Assessment Years :2006-07 and 2007-08)

Viren P Vora (HUF),         / Income Tax Officer 16(1)(4),
1/42, Tardev A/c Market,    Vs.
                                Mumbai
Tardeo Road,
Mumbai-400034
      ( /Appellant)         ..    ( / Respondent)

    ./   ./PAN/GIR No. :AAAHV2456G


           ./I.T.A. No.3217 and 3218/Mum/2015
       (   / Assessment Years :2007-08 and 2008-09)

Asha D Vora,                / Income Tax Officer 16(1)(4),
1/42, Tardev A/c Market,    Vs.
                                Mumbai
Tardeo Road,
Mumbai-400034
      ( /Appellant)         ..    ( / Respondent)

    ./   ./PAN/GIR No. :AABPV8609B


           ./I.T.A. No.3219 and 3220/Mum/2015
      (   / Assessment Years : 2006-07 and 2007-08)

Payal B Vora,               / Income Tax Officer 16(1)(4),
1/42, Tardev A/c Market,    Vs.
                                Mumbai
Tardeo Road,
Mumbai-400034
      ( /Appellant)         ..    ( / Respondent)

    ./   ./PAN/GIR No. :AABPJ5872C
                                     2
                                             ITA No.,3143,3144,3217 ,3218,3219
                                                           a n d 3 2 2 0 / Mu m / 2 0 1 5

              / Appellants by            Shri Jitendra Singh
              /Rspondent by              Shri Mourya Pratap


           / Date of Hearing                   : 13.8.2015
           /Date of Pronouncement : 26.8.2015

                               / O R D E R
Per Bench:

      All the appeals filed by the respective assessees are directed against
the separate orders passed by the ld.CIT(A)-30, Mumbai in their respective
hands for the assessment years mentioned in the cause title. Since the
issues urged in all these appeals are identical in nature, they were heard
together and are being disposed of by this common order, for the sake of
convenience.


2.    All the assessees are contesting the following issues:
      a)     Validity of reopening of assessment;
      b)     Assessment of purchase value of shares by treating them
             as bogus purchases; and
      c)     Assessment of estimated expenditure relating to purchases.






3.    We have heard the parties and perused the record. The facts
relevant to the above said issues are that the department carried out
search and seizure operation in the hands of a person named as Shri
Mukesh Chokshi, who admitted that he and his group of companies were
engaged in the business of providing accommodation bills for purchase
and sale of shares in order to enable the persons to generate the
speculation profit /loss, Short Term Capital Gain and Long Term Capital
Gains etc. It was noticed that the assessees herein had also purchased
shares from the group companies belonging to Shri Mukesh Chokshi.
Hence, upon receipt of information in this regard, the AO re-opened the
assessment of all these assessees for the years under consideration. The
                                      3
                                             ITA No.,3143,3144,3217 ,3218,3219
                                                           a n d 3 2 2 0 / Mu m / 2 0 1 5

AO treated the purchase value of the shares as bogus purchases and
assessed the same as income of the assessee. The AO also estimated the
expenditure that could have been incurred by the assessees for getting
accommodation bills at 2% of the purchase value and assessed the same
as unexplained expenditure. The ld. CIT(A) dismissed the appeals filed by
the assessees and hence they have filed these appeals before the
Tribunal.

4.    The first issue relates to the validity of reopening of the assessment.
At the time of hearing, the ld. AR did not argue on this ground. Hence the
same is dismissed.

5.    The next issue relates to the assessment of purchase value of
shares as income of the assessee and also the addition relating to
estimated expenditure.     The ld. Counsel appearing for the assessee
submitted that assesses herein had sought for cross-examination of Shri
Mukesh Chokshi, since the AO framed the assessment on the strength of
the statement given by Shri Mukesh Chokshi.          He submitted that these
assessees were not afforded the opportunity to cross-examine Shri Mukesh
Chokshi. Accordingly, the ld. AR submitted that the AO should not have
made the additions by violating the principles of natural justice.
Accordingly he prayed that the assessees should be provided with
adequate opportunity to cross-examine Shri Mukesh Chokshi. The Ld A.R
submitted that the same would help the assessees to support share
transactions.

6.    The ld. DR did not object to the plea put forth by the ld. AR.

7.    Having regard to the rival submissions, we are of the view that the
AO was not justified in not affording the opportunity of cross examination
to the assessees herein and the said action of the AO violates the
principles of natural justice.   Further, as submitted by the Ld A.R, the
                                     4
                                             ITA No.,3143,3144,3217 ,3218,3219
                                                           a n d 3 2 2 0 / Mu m / 2 0 1 5




assessing officer has made the impugned additions only on the basis of
statement given by Shri Mukesh Choksi. Accordingly, we are of the view
that the assessees herein should be provided with adequate opportunity to
cross-examine Shri Mukesh Chokashi. Accordingly, we set aside the order
of ld. CIT(A) in respect of both the additions referred above and restore
them to the file of the AO with a direction to examine these issues afresh
after affording adequate opportunity to the assessees to cross-examine
Shri Mukesh Choksi and also after considering any other information and
explanations that may be furnished by these assessees.


8.      In the result, all the appeals filed by the assessees are treated as
allowed for statistical purposes.

       Pronounced accordingly in the open Court on 26th August 2015.
                                         26th August, 2015    

             Sd                                                  sd

  (LALIT KUMAR)                                       ( B.R. BASKARAN)
 JUDICIAL MEMBER                                   ACCOUNTANT MEMBER
 Mumbai: 26th Aug, 2015.

.../ SRL , Sr. PS

    /Copy of the Order forwarded to :
1.  / The Appellant
2.    / The Respondent.
3.    () / The CIT(A)- concerned
4.     / CIT concerned
5.    ,   ,  /
     DR, ITAT, Mumbai concerned
6.     / Guard file.

                                                              / BY ORDER,
True copy

                                                       (Asstt. Registrar)
                                           ,  /ITAT, Mumbai

 
 
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