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TMI Blog2018 (11) TMI 1491X X X X Extracts X X X X X X X X Extracts X X X X ..... ty was not granted to assessee, though Ld. CIT (A) had coterminous powers as that of Ld. AO. This amounts to gross violation of principles of natural Justice. - Decided against revenue - ITA No. 5662/Del/2018 - - - Dated:- 27-11-2018 - Smt. Beena A Pillai, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Assessee : Sh. H.P. Agarwal, FCA, Ms. Prashuka Jain, FCA For the Department : Sh. Surender Pal, Sr. DR ORDER PER BEENA A PILLAI, JUDICIAL MEMBER Present appeal has been filed by assessee against order dated 23/01/17 passed by Ld. CIT (A)-11, New Delhi for assessment year 2014-15 on following grounds of appeal: 1. The Ld.CIT(A) has erred on facts and in law in confirming addition of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice under section 142(1) of the Act. In response to statutory notices, representative of assessee appeared before Ld.AO and submitted necessary details and documents which were examined on test check basis. 3. Ld.AO observed that assessee derived income from salary and house property, business or profession, capital gains and other sources. 4. Main issue that was taken up for consideration by Ld.AO was examining suspicious long term capital gain on shares declared by assessee in computation of income. It was found that assessee had long term capital gain, which was claimed to be exempt amounting to ₹ 1,39,32,356/-. It was alleged that it was received from sale of shares. Assessee declared following calculations regarding income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no Industries were issued to assessee and was credited in Demat Account on 28/03/2013. 6. From the above, Ld.AO observed that assessee bought 2500 shares of M/s Basukinath Real Estate Ltd., on 30/09/11 at a cost of ₹ 5 Lacs from M/s Sharewood Furniture Pvt. Ltd. Subsequently, bonus shares at the ratio of 18:1 was issued to assessee, totalling to 45,000 on 16/03/12, within a period of 5 months from date of purchase of shares. It was observed that subsequent to amalgamation approved by Bombay High Court assessee was allotted 47,000 shares of amalgamated company, being M/s Unno Industries. These shares were sold by assessee after lock in period of one year, thereby earning long term capital gain of approximately 1.39 crores. 6.1 An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to share trading pattern of assessee. He submitted that Ld. AO applied test of human probabilities to evaluate genuineness of transaction to conclude sale and purchase of shares to be sham transactions undertaken with purpose of obtaining bogus long term capital gains, Ld. Sr. DR placed reliance upon detailed observations by Ld. AO and Ld. CIT (A). 11. We have perused submissions advanced by both sides in light of records placed before. We also refer to all judicial precedents relied upon by both sides. 12. It is observed that both Assessing Officer as well as Ld.CIT(A) is relying upon statement recorded by Investigation Department of Sh. Amit Dalmia and Sh. Narendra Kumar Jain. It is based upon their statements, that test of human ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iples of natural Justice. We draw our support from the decision of Hon ble Supreme Court in the case of Andaman Timber Industries versus CCE reported in (2015) 62 Taxmann.com 3, wherein Hon ble court observed as under: According to us, not allowing the assessee to crossexamine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the cor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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