Assessee claimed exemption under section 10(38) as regards long-term capital gain on sale of shares of M/s. Turbotech Engineering Ltd. AO doubted rise in price of shares of said company from Rs. 19.65 per share to Rs. 518 per share within previous year 2013-14 relevant to assessment year 2014-15 and accordingly, held assessee's claim as bogus and made addition under section 68.Held: AO had conducted independent inquiries with BSE which revealed that prices of shares of Turbotech Engineering Ltd. were rigged/manipulated with an intent to defraud revenue. The financials of said company/M/s. Turbotech Engineering Limited wherein there was no turnover/income earned and no expenses incurred for last five years, also did not support huge price variation. No evidences were filed by assessee to rebut findings of AO and merely it was stated that principles of natural justices were infringed, cross examination was not allowed, statements were not provided and additions were made on assumptions, surmises and conjectures. These were all bogies raised by assessee to protract litigation while fact of the matter was that assessee had not come out clean on his claim of exemption under section 10(38) and, therefore, AO was justified in making additions.
IN THE ITAT, CHENNAI BENCH
GEORGE MATHAN, J.M. & RAMIT KOCHAR, A.M.
Sudha Eashwar v. ITO
I.T.A. No. 2342/Chny/2019
A.Y. 2014-15
2 January, 2020
Appellant by: None
Respondent by: Sumathi Venkatraman, JCIT
Ramit Kochar, A.M.
This appeal filed by assessee is directed against appellate Order, dated 28-6-2019 passed by learned Commissioner (Appeals)-7, Chennai (hereinafter called 'the CIT(A)'), in I.T.A. No. 231 (T-14)/Commissioner (Appeals)-7/2016-17 for assessment year (AY) 2014-15, the appellate proceedings before learned Commissioner (Appeals) had arisen from assessment order dated 31.12.2016 passed by learned assessing officer (hereinafter called 'the AO') for assessment year 2014-15 under section 143(3) of the Income Tax Act, 1961 (hereinafter called 'the Act').
2. The grounds of appeal raised by assessee in memo of appeal filed with the Income Tax Appellate Tribunal, Chennai (hereinafter called 'the Tribunal') reads as under :--
'1. The order of the learned Commissioner (Appeals) is against law as well as facts. The action of the Commissioner (Appeals) in dismissing the appeal is unjustified, arbitrary and against law.
2. The learned Commissioner (Appeals) has erred to notice or adjudicate the issue that the assessing officer (A.O.) had made the additions without even stating under which provisions of the Income Tax Act, 1961 he made those additions. Such non-mentioning the section invoked renders the assessment order bad in law.
3. The learned Commissioner (Appeals) has completely erred against facts when she held that there is no violation of Natural justice as according to Commissioner (Appeals) giving a show cause notice is sufficient compliance of 'Natural Justice'. The fact is that the assessing officer has neither furnished the copy of the statement recorded from a third party implicating the Appellant herein and nor the appellant was given an opportunity to cross examine the person who is purported to have given a statement implicating the appellant. This is a clear violation of Principle of Natural justice and this ground was never considered by the learned Commissioner (Appeals) while passing the order on Appeal.