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2014 (11) TMI 142 - ITAT MUMBAIUnexplained cash credits u/s 68 – Amount shown as LTCG on sale of shares - Held that:- It is amply evident that the AO has not given any independent finding, except for incorporating the observations and finding given in the case of Shri Pinakin L. Shah, a family member of the assessee wherein similar additions have been made - The very premise of reopening the case of the assessee and also the additions made therein is that, the assessee’s family were the beneficiaries of the accommodation entries of long term capital gain given by Shri Mukesh Choksi, Director of M/s. Mahasagar Securities Pvt. Ltd. - Since the nature of capital gain in the case of all the family members were arising out of same set of shares of M/s. Talent Infoway Limited, which were sold through Shri Mukesh Choksi therefore, the facts of the Pinakin L. Shah and the findings given assume a great significance - the purchases of shares have been made in the earlier assessment year and such purchases have not been doubted by the Department - Only the net sale proceeds, which has been shown as long term capital gain, has been added, that is, sales minus purchases - If the factum of purchases recorded in the balance sheet of the earlier years is not disproved, then the sale of the same shares in this year cannot be prima facie held to be bogus. The addition itself has not been made on account of entire sale proceeds, but only on account of net long term capital gain, which itself goes to show that the Department has not carried out proper inquiry or has brought any material on record in the case of the assessee to prove that the entire sale transaction of the assessee is not genuine – there was no reason to confirm the addition on account of long term capital gain, which has been added as income of the assessee u/s 68, and therefore, the same stands deleted. Addition on account of gift – Held that:- When the permanent account number and income-tax details are furnished to the assessing officer by way of confirmation letters as well as affidavits, the AO observing that no details have been furnished is not correct - No attempt has been made to examine the balance sheet to find out the creditworthiness - We also find that the assessing officer had recorded the statement of only one of the donors i.e. Shri Mukesh R.Chokshi and in reply to question Shri Chokshi stated on oath that he has given ₹ 5 lakhs out of love and affection to his business customer and friend and that he would submit his balance sheet to prove this - There is no evidence found by the revenue, which contradicts the evidence filed by the assessee - the addition by invoking the theory of preponderance of probabilities is bad in law. Without there being any proper reasoning by the CIT(A) and analysis of the documents and affidavits furnished, the addition of gifts for sums aggregating ₹ 20 lakh cannot be sustained - after the assessee has filed all the relevant documents and evidences in support of gifts, the department has neither carried out any enquiry nor has rebutted the evidence with any material, except for relying on unsubstantiated statement of Mukesh Choksi, which too was not specific on gifts - the primary onus which lied upon the assessee stood discharged and the amount of gift cannot be added u/s 68 – Decided in favour of assessee.
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