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TMI Blog2020 (12) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... justice 1.1 The Learned Commissioner of income -tax (Appeals) -48, Mumbai [ Ld. CIT (A) ] erred in not granting proper, sufficient adequate opportunity of being heard to the Appellant while framing the assessment. 1.2 It is submitted that in the facts the circumstances of the case, in law, the assessment so framed be held as and illegal, as the is framed in breach of the principles of natural justice and without application of mind to the factual and legal aspects involved in the appeal WITHOUT PREJUDICE TO THE ABOVE 2. THE REASSESSMENT ORDER WAS _BAD_IN LAW AND WITHOUT JURISDICTION 2.1 The Ld. CIT (A) erred in confirming the validity and legality of the reassessment order passed by the A.O. 2.2 It is submitted that in the facts and the circumstances of the case, and in law, the reassessment order passed by the A.O. was bad, illegal and without jurisdiction. WITHOUT FURTHER PREJUDICE TO THE ABOVE 3. ON MERITS 3.1 The Ld. CIT (A) erred in confirming the action of the A.O. in making addition of ₹ 25,43,725/-, being the amount of term capital gain claimed by the Appellant, on the ground of unexplained cash. 3.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2043/Mum/2011 dated 31.07.2019. Referring to these two decisions Ld. Counsel for the assessee submits that the Tribunal following the decisions of the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd., v. ITO [259 ITR 19] and the decision of the Hon'ble Jurisdictional High Court in the case of KSS Petron Pvt. Ltd., v. ACIT in ITA.No. 224 of 2014 dated 03.10.2016 set-aside the Assessment Order as there was no separate order passed by the Assessing Officer dealing with the preliminary objections filed by the assessee in reopening the assessment. 5. Ld. Counsel for the assessee also placed reliance on the decision of the Hon'ble Bombay High Court at Goa Bench in the case of Fomento Resorts Hotels Ltd., v. ACIT in Tax Appeal No. 63 of 2007 dated 30.08.2019 and submitted that it has been held by the Hon'ble Bombay High Court that the Assessing Officer has to pass a separate order disposing off the preliminary objections and he cannot dispose off the objections while passing the Assessment Order itself. 6. On the other hand, Ld. DR strongly supported the orders of the Authorities below. 7. We have heard the rival submissions, perused the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii. In any case, the statement of Shri Jasmin Ajmera was taken in coercion, pressure and undue influence and given In stress and utter duress. Therefore, we believe such statement is not a valid statement in the eyes of law and consequently, is not binding on the person who gave the statement and least binding on any third party. Further, the entire statement stood fully retracted by Shri Jasmin Ajmera in his detailed affidavit dated 02/08/2013 and 14/08/2015, submitted to the department, Shri Jasmin Ajmera in his affidavits, have very exhaustively dealt with the entire chain of events which transpired during the course of the search, as well as, has also placed on record the manner in which he was pressurized, threatened and also the circumstances under which this so called confession in the form of statement was extracted from him. iii. Shri Jasmin Ajmera has retracted from the statement/ confession so extracted. We say that in the given circumstances, the so called statement has absolutely no evidentiary value, on fact, as well as in law. Iv. In any case, the statement of Shri Jasmin Ajmera is not binding on us and we have not confessed any such disclosure, we say tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her broker acting on behalf of holder of the shares who accepts to sell at that price and or vis-e-versa. The important thing is that the transaction is concluded automatically through the stock exchange mechanism on the matching parameters of price and up to that quantity only without any description / choice of the selling broker / buying broker. In fact, the very purpose behind this mechanism is to bring transparency and not to give any such discretion,' choice to the brokers / clients. Most Importantly, neither the selling person nor his broker is aware about who is the actual purchaser of the share. As such, when we sold the shares through our broker, we were not even aware about the person purchasing the shares much less we had no means to know that. 4. None of the regulatory authorities, like SEBI, BSE, RBI etc. has even suggested, much less held, that these transactions were bogus. In other words, the transactions are accepted to be proper and genuine by the concerned regulatory authorities, without any such regulatory authorities taking any adverse view. in fact, the very same company, Prraneta Industries Ltd. has recently come out with public preferential issue o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enable us to give meaningful reply, for ourselves, we have to request you to identify and let us know the exact pages / papers / documents which you intend to actually rely and also let us know as to in what way and for what purpose they are sought to be so relied upon. 2. However, strictly without prejudice to the above and under protest, we give our very preliminary and brief observations, upon going cursorily through the contents of the pen drive, hereinbelow: (1) In any case, many of the documents are rough notings /scribblings / chits, etc., which otherwise also have no evidentiary value, being 'dumb' documents. (ii) We are not aware who has prepared these data/documents/chits etc. and we would like to cross - examine the person and/or the author who has prepared the data, apart from this being a normal and essential requirement of the principle of natural justice, as the data appears to be incorrect, so far as the transactions relating to us. (iii) The rest of the details are incoherent and in no way are connected with us. Many of the scanned pages are loose sheets, rough pages and scribblings, which do not make any sense. (iv) In the circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares sold by us on automated exchange platform. v) Please let us know what actions have been taken against the deponents as well as the concerned companies as well as against Shirish C. Shah. For example, whether the income supposed to have been received by them from Shirish C. Shah has been declared / assessed in their case? vi) In this background, these loose papers / affidavits cannot be called any material, much less cogent material, to rebut the preliminary presumption about correctness of the transaction. Please note that said Shirish C. Shah was nowhere concerned with our transactions of sale nor was he ever been contacted for any such transactions. Please provide us an opportunity of cross - examining said Shirish Shah and all the individuals on whose statements you are depending to bring at correct facts on record. The above are our preliminary submissions / objections on the issue. If you still intend to proceed further, we request that the same be Intimated to us, along with the reasons thereof, to enable us to make further submissions, On fact as well as in law. Needless to say that, in the meanwhile, if any further information / explanation is requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment order passed. In the above decisions relied upon by the appellant, the assessment order passed was not held to be invalid on account of not disposing off the assessee s objections raised against re-opening of the assessment. In those cases the assessment order was set aside to the file of the AO for first disposing off the objections by passing a speaking order and then frame assessment order. Therefore, on account of this irregularity, the assessment order passed by the AO cannot be held to be invalid. As per existing provisions of the Act, the undersigned has no power to set aside the assessment order passed by the AO. Therefore, appellant s objections/arguments on this issue are not acceptable. In the above background, Ld. CIT-DR pleaded for restoration of matter back to the file of Ld. AO for disposal of assessee s objection against reassessment proceedings. However, the fact that the assessee had raised objections against the reopening of the assessment and the same was not disposed-off by Ld. AO, remain uncontroverted. Nothing on record would establish that the assessee s objections against reopening of assessment were ever considered and rejected by Ld. AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the notice dated 28th March, 2008, even consequent to the impugned order of the Tribunal, has lapsed. 11. Therefore, on the above facts and law, the substantial question of law is answered in the negative i.e. in favour of the Appellant-Assessee and against the Respondent-Revenue. This decision has subsequently been followed by the co-ordinate bench of the Tribunal in number of cases, few of which could be tabulated as follows: - 1. DCIT M/s. National Bank for Agriculture and Rural Development [ITA No.4964/Mum/2014 (A.Y.2004-05) dated 28/10/2016] 2. Baldev Ramratan Sharma Vs. ACIT [ITA No.1909/Mum/2017 (A.Y.2009-10) dated 28/08/2018] 3. DCIT V/s Firstsource Solutions Ltd. [ITA Nos. 3985-86/Mum/2016 dated 22/05/2019] 4. The co-ordinate bench of the Tribunal in DCIT V/s Firstsource Solutions Ltd. [supra], after considering the contrary case-laws as cited by the revenue, has concluded the matter in the following manner: - 7. We have considered rival submissions and perused the material on record. Undisputed factual position, as culled out from the material on record, clearly reveals that in the course of re assessment proceedings, though, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss a fresh assessment order. The first decision relied upon by the learned Departmental Representative is, Home Finders Housing Ltd. v/s ITO, [2018] 94 taxmann.com 84 (SC). This is a matter arising out of a judgment delivered by the Hon ble Madras High Court holding that non disposal of objection before completion of assessment is a procedural irregularity which can be cured by setting aside the assessment order to the Assessing Officer for disposing of assessee s objection and thereafter completing the assessment. Against the aforesaid decision of the Hon ble Madras High Court, the assessee filed a Special Leave Petition (SLP) before the Hon'ble Supreme Court. The Hon'ble Supreme Court in the decision cited supra, dismissed the SLP in limine without laying down any ratio. The order passed by the Hon ble Supreme Court is as under:- The Special Leave Petition is dismissed. Pending application stands disposed of. 8. It is a fairly well settled legal position that dismissal of SLP in limine at the stage of admission without a speaking or reasoned order does not constitute a binding precedent under Article 141 of the Constitution of India. This principle has been w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in KSS Petron Pvt. Ltd. (supra), in no uncertain terms, has held that if the Assessing Officer before completion of assessment has not disposed of the objection, the assessment order cannot be restored back to the Assessing Officer for framing assessment de novo after disposal of the objections of the assessee. Though, the Hon'ble Madras High Court in case of Home Finders Housing Ltd. referred to earlier as well as the Hon'ble Gujarat High Court in MGM Exports v/s DCIT, [2010] 323 ITR 33 (Guj.) and PCIT v/s Sagar Developers, [2016] 72 taxmann.com 321 (Guj.) have held contrary view, however, we are bound by the decision of the Hon'ble Jurisdictional High Court in KSS Petron Pvt. Ltd. (supra). 9. In view of the aforesaid, we do not find any infirmity in the orders passed by learned Commissioner (Appeals) in holding the assessment orders passed to be legally unsustainable. Accordingly, grounds raised in both the appeals are dismissed. Respectfully following the cited binding judicial precedents, the action of Ld. first appellate authority in upholding the reassessment proceedings, could not be said to be in accordance with law. Therefore, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntext of this very Appellant, was upheld not only by this Court, but also by the Hon ble Supreme Court. This was in ETA No.1 and 5/PANJ/01 decided by the Tribunal on 4.4.2006. 15. The aforesaid decision of the ITAT was appealed by the Respondent vide Tax Appeal No.71/2006. This appeal was dismissed by this Court vide order dated 27th November, 2006, which reads thus : Heard the learned Counsel on behalf of the parties. This appeal is filed against the Order dated 4-4-2006 of the ITAT wherein in para 7 the learned ITAT has come to the conclusion that the Assessing Officer is required to give reasons, when asked for by the Assessee. Giving of reasons has got to be considered as implicit in Section 11 of the Expenditure Tax Act, 1987. It is now well settled that giving reasons in support of an order is part of complying with the principles of natural justice. In the light of that, no fault could be found with the order of the learned ITAT and as such no substantial question of law arises as well. Appeal dismissed. 16. The Respondent, instituted a Special Leave to Appeal (Civil) No.5711/2007 which was, however, dismissed by the Hon ble Apex Court vide order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Tribunal was justified in restoring the issue to the Assessing Officer after having quashed/set aside the order dated 14th December, 2009 passed by the Assessing Officer without having disposed of the objections filed by the appellant to the reasons recorded in support of the reopening Notice dated 28th March, 2008 ? 22. In the aforesaid case, the Assessing Officer had purported to dispose of the objections to the reasons in the assessment order, consequent upon reopening of the assessment. This Court, however, held that the proceedings for reopening of assessment prior to disposing of the Asessee s objections by passing a speaking order, was an exercise in excess of jurisdiction. 23. KSS Petron Private Ltd. (supra), this is what the Division Bench has observed at paragraphs 7 and 8 of the Judgment : 7. On further Appeal, the Tribunal passed the impugned order. By the impugned order it held that the Assessing Officer was not justified in finalizing the Assessment, without having first disposed of the objections of the appellant. This impugned order holds the Assessing Officer is obliged to do in terms of the Apex Court's decision in GKN Driveshafts (India ..... X X X X Extracts X X X X X X X X Extracts X X X X
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