Per Smt. P. Madhavi Devi, J.M. All are appeals of the respective assessees for the A.Y 2011-12 against the order of the CIT (A)-2, Hyderabad dated

30.05.2018 respectively. All the assessees are related parties and the issues are common and therefore, the appeals were heard together and are disposed of by this common and consolidated order. For the sake of convenience, the grounds of appeal raised by the assessee Shri Pramod Kumar Bung are reproduced hereunder:

1. That the learned CIT (A) erred in law and on fact in confirming the assessment order and dismissing the appeal filed against the assessment order.

2. That the learned CIT (A) without appreciating the facts and without proper application of law erred in confirming the addition of Rs.34,99,520 and upholding the denial of exemption claimed u/s 10(38) of the I.T. Act, 1961.

3. That the learned CIT (A) erred in dismissing the ground that non supply of reasons for re-opening assessment which is mandatory as per procedure laid down by Honble Supreme Court in the case of GKN Driveshaft India Ltd vs. ITO (259 ITR 19) will vitiate the re-assessment proceedings and render the re-assessment order bad in law as decided by Courts in a number of decisions relied upon by the appellant.

4. That the learned CIT (A) erred in law in applying the provisions of section 292B and section 292BB to the appellants case even though as per judgment of the Apex Court supplying of reasons for re-opening is mandatory.

5. That the learned CIT (A) erroneously upheld the re- opening of assessment by the AO only on the ground that certain information has been received from investigation wing against persons other than the appellant without application of mind and without establishing a live link between the information received and belief that income has escaped assessment. He ought to have held the reopening and subsequent re-assessment only bad in law.

6. That the learned CIT (A) erred in not appreciating the fact that the appellant has discharged the initial onus of ITA Nos 1492 1494 1495 and 1496 of 2018 PK Bung and others Hyderabad. Page 3 of 6 filing evidences in support of its claim of LTCG which have not been found to be defective or wrong or fabricated by the AO or by learned CIT (A).

7. That the learned CIT (A) erred in holding that the statement recorded on oath u/s 131 from the brokers/ promoters/operators without any reference to the appellant is a circumstantial evidence against the appellant.

8. That the learned CIT (A) erred in upholding order of the AO where the claim of the Appellant has been rejected on the basis of certain finding by the Investigating Officers in respect of other persons and not in respect of the appellant, in particular even though there is absolutely no reference to the appellant in the report relating to such investigation.

9. That the learned CIT (A) erred in upholding order of the AO which is based on suspicion and doubt. His suspicion however strong cannot take the place of proof as was held by the Honble Supreme Court in the case of Umacharan Shaw and Brothers vs. CIT West Bengal (37 ITR 271 S.C) and Dhakeshwari Cotton Mills Ltd vs. CIT (26 ITR 775 S.C)

10. That the learned CIT (A) erred in applying the theory of human probability to appellants case overlooking the fact that all the transactions were made through recognized stock exchange, demat account and banking channels which are subject to regulations of Statutory Regulatory Authority like SEBI and all transactions leave audit trail for verification.

11. That the learned CIT (A) erred in not following the rule of statutory interpretation according to which where two views are possible, the view favoring the assessee should be accepted as held in case of CIT vs. Vegetable Products Ltd (88 ITR 192 S.C) and CIT vs. JK Hosiery Factory (159 ITR 85 S.C).

12. That the learned CIT (A) erred in relying on the decisions in case of Sumati Dayal vs. CIT (214 ITR 801) and Mc Dowell & Company Ltd vs. CTO (1986 AIR 649), without appreciating the fact that the facts in appellants case are different from facts of these cases.

13. The appellant craves leave to add, alter or modify or substitute any other grounds to grounds of appeal at any time before or at the time of hearing of the appeal.

13. For these and other reasons that may be urged at the time of hearing additions made may be deleted and appeal may be allowed

. ITA Nos 1492 1494 1495 and 1496 of 2018 PK Bung and others Hyderabad. Page 4 of 6

2. As regards Grounds 2 to 4 are concerned, the learned Counsel for the assessee submitted that the respective assessees filed their returns of income by reporting the long term capital gains on sale of shares but claimed it as exempt from Income Tax. Meanwhile, the Directorate of Investigations, Kolkata carried out a country wide investigation to unearth the organized racket of generating bogus entries of LTCG which is exempt from the Income Tax. As per the said information available, the assessees are also the beneficiaries of the above scheme. The AO therefore, went through the record and found that during the financial year 2010-11 relevant to the A.Y 2011-12, the assessees before us, have sold the shares of M/s. NCL Research & Financial Services Ltd (which was identified as a Penny Stock Company) and claimed the LTCG gain derived from the said transactions as exempt u/s 10(38) of the. The AO, therefore, reopened the assessment u/s 147 by issuance of a notice u/s 148 of the. In response to the same, the assessees filed their returns of income and also filed a letter seeking reasons for reopening of the assessment. The AO did not supply the reasons, but proceeded to complete the assessments by disallowing the claim of exemption and bringing to tax the LTCG. Aggrieved, the assessees preferred appeals before the CIT (A), by raising additional ground of appeal that the reasons recorded for reopening of their assessments were not supplied to them, inspite of specific requests made by them. The CIT (A), however, considered the provisions of section 292(B) of theand observing that since the assessees participated in the assessment proceedings and have never raised any objection during the assessment proceedings and have also given their submissions to the AO, the assessees aware of the reasons for the reopening and there was no violation of any of the provisions. He ITA Nos 1492 1494 1495 and 1496 of 2018 PK Bung and others Hyderabad. Page 5 of 6 accordingly rejected the assessees additional grounds of appeal and proceeded to confirm the disallowances made by the AO. Aggrieved, the assessee is in appeal before us by raising the above grounds of appeals.

3. The learned Counsel for the assessees reiterated the submissions made by the assessee before the authorities below while the learned DR supported the orders of the authorities below.

4. Having regard to the rival contentions and the material on record, we find that the respective assessees had asked for the reasons for reopening of the assessment in a letter dated

13.10.2016 and it is also not in dispute that the reasons for reopening were not supplied to the assessees. The Honble Supreme Court in the case of GKN Driveshaft India Ltd vs. ITO (259 ITR 19) , has clearly held that the AO has to supply the reasons for reopening of the assessment to the assessee, if it is asked for, and if the assessee filed its objections to the said reasons for the reopening, the AO has to dispose of the said objections before proceeding to complete the assessment. In the case before us, clearly such a procedure had not been followed by the AO and even before the CIT (A), the assessees have not been given the copy of the reasons for reopening. During the course of hearing before us, the learned Counsel for the assessee submitted that by virtue of the RTI Act, the assessee has obtained the reasons for reopening. Since the assessees are already in possession of the reasons for reopening, we are of the opinion that the assessee should be given an opportunity to raise their ITA Nos 1492 1494 1495 and 1496 of 2018 PK Bung and others Hyderabad. Page 6 of 6 objections against such reopening, if they so desire. In view of the same, we deem it fit and proper to set aside the assessment order of all the assessees to the file of the AO with a direction to allow the assessees to file their objections to the reasons for reopening and upon such receipt, shall dispose of the objections by a speaking order and thereafter if it is considered necessary, to complete the assessment proceedings afresh, after giving the assessee a fair opportunity of hearing before taking a decision. The assessees shall be given an opportunity to present any documents which were relevant to the case and are not filed earlier.

5. In the result, the assessments of all the four assessees are set aside with the above directions and all the appeals are treated as partly allowed for statistical purposes. Order pronounced in the Open Court on 19 th September, 2018. Sd/- Sd/- (S.Rifaur Rahman) Accountant Member (P. Madhavi Devi) Judicial Member Hyderabad, dated 19 th September, 2018. Vinodan/sps Copy to: 1 M/s.PK Bung, Govindram Bung & Sons (HUF), Urmila Bung & Kaushalya Devi Bung, House No.21-3-558/1/A, Moosa Bowli, Chelapura, Hyderabad 500002 (TS) 2 ITO Ward 8(2) Hyderabad 3 CIT (A)-2, Hyderabad 4 Pr. CIT 2 Hyderabad 5 The DR, ITAT Hyderabad 6 Guard File By Order