TMI Blog2023 (6) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... of employer v/s employee - No details of the exit providers to the assessee as well as accommodation entry providers with respect to purchase of shares is available in the assessment order. We found that the CIT A has made an addition u/s 69C as well as u/s 68 of the act in the hands of emploer [Mr Kishan Khaderia] therefore, even if the above long-term capital gain is held to be bogus based on the material available in the mobile phone of the assessee, this addition also cannot be made in the hands of the assessee but has to be made if at all to be made in the hence of Mr Kishen Khaderia. This is the finding of the CIT A. Therefore, even otherwise, if this addition is required to be made it should be made in the hands of the employer of the assessee and not this assessee. Decided in favour of assessee. - ITA No. 1198/MUM/2020 , ITA No. 1284/MUM/2020 - - - Dated:- 1-5-2023 - SHRI PRASHANT MAHARISHI , AM AND SHRI SANDEEP SINGH KARHAIL , JM For the Assessee : Shri. Ajay Daga , Ashok Bansal For the Revenue : Ms Ridhi Mishra ( CIT DR ) ORDER PER PRASHANT MAHARISHI , AM : 01. ITA number 1198/M/2020 is filed by the assessee against Appellate order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax (investigation) unit 3 (3), Delhi. The allegation against the group was that it is engaged in providing various types of accommodation entries to large number of beneficiaries all over the country. Mr RK Kedia group is also involved in issuing bogus long-term capital gain. 05. During post search proceedings, AO alleged that seized material contains certain incriminating transactions and other information pertained to the assessee. The residential premises of the assessee at Dombivali West, Thane was also covered under section 133A of the act simultaneously on 13/6/2014. 06. Notice under section 153A was issued on 29/7/2015. Assessee objected that no search warrant was in respect of search action on 13/6/2014 was issued in the name of assessee. The learned assessing officer disposed of the objection rejecting the same. The assessee thereafter filed return of income on 21/1/2016 declaring a total income of ₹ 642,020/ . The return of income was picked up for scrutiny and notice under section 143 (2) of The Act was issued on 21/1/2016 and notice under section 142 (1) of the Act was issued on 13/6/2016. The assessee objected that the proceedings are without the authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submission is not tenable in the backdrop of the prearranged trading in shares of various non-descriptive listed companies established as penny stock by the investigation wing. The learned AO also held that RK Kedia group has been involved in evading income tax itself but also helping other persons in revision of income tax on a very large-scale by providing bogus long-term capital gain and various other kinds of accommodation entries. Shri Manish Aurora keeps the record of unaccounted transaction. Sri Rajkumar Kedia operates from and through a close network of associates in Delhi Mumbai and Calcutta. The entire entry providing operation comprises of various level. Accordingly, relying on the report of investigation wing where the modus operandi of accommodation entry of long-term capital gain is explained and ultimately he held that the scheme is a pure tax avoidance scheme without any commercial justification further the transactions are self concealing and are designed only with a view to earn exempt capital gain under section 10 (38) of the act. Therefore based on the investigation conducted by the investigation wing the learned assessing officer has treated the above long-te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact that it was further locker and not for any premises. Once there is a warrant of authorization in the name of person the search related assessment have necessarily be undertaken as per the provisions of section 153A of the act. It is immaterial as to whether anything was seized from the premises or not. Accordingly the preliminary objection of assessee was dismissed. With respect to the addition of long-term capital gain of ₹ 2,395,024/ CIT (A) relied upon the information contained in the investigation Wing report and statement of various persons contained in that report confirmed the addition. With respect to the addition of Rs 128 lakhs on the basis of incriminating short messages found from the mobile of the assessee about the unaccounted cash transaction, the learned CIT A examined the statements of the various persons and thereafter he tabulated the total transaction from 10/3/2014 to 12/6/2014 and found that there is an aggregate outgo of ₹ 25,650,000/ this is required to be taxed under section 69C of the act. He further analyzed that the total sum of ₹ 59,750,000 is the inflow out of which only ₹ 128 lakhs is added by the learned AO. Howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital gain earned by the assessee has been clearly demonstrated as genuine transactions. There is no evidence available with the assessing officer that the above transaction is non genuine. He therefore submitted that addition on that account deserves to be deleted. 016. The learned departmental representative vehemently supported the order of the learned CIT A on the issue of validity of the issue of notice under section 153A of the act. She further relied upon the decision of the learned CIT A on the issue of long-term capital gain held to be bogus. She extensively referred to the order of the learned CIT A. She further referred to the decision of honourable Supreme Court in case of Suman poddar versus ITO 112 taxmann.com 330. 017. We have carefully considered the rival contention and perused the orders of the lower authorities. With respect to the first ground of appeal challenging that the issue of notice under section 153A of the income tax act by the learned assessing officer to the assessee is invalid, we found that panchnama dated 13/6/2014 issued in the name of Mr Kishen Rugnath Prasad Khadaria at the residential premises of the assessee at 16, Sai Satyam, Kop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y but made addition only on the basis of report of investigation wing. No details of the exit providers to the assessee as well as accommodation entry providers with respect to purchase of shares is available in the assessment order. Further we found that the learned CIT A has made an addition of ₹ 25,650,000 under section 69C as well as of ₹ 59,757,000 under section 68 of the act in the hands of Mr Kishan Khaderia, therefore, even if the above long-term capital gain is held to be bogus based on the material available in the mobile phone of the assessee, this addition also cannot be made in the hands of the assessee but has to be made if at all to be made in the hence of Mr Kishen Khaderia. This is the finding of the learned CIT A. Therefore, even otherwise, if this addition is required to be made it should be made in the hands of the employer of the assessee and not this assessee. Further as the mobile transaction , as alleged by ld Ao is believed, then also the addition held to be made in hands of Mr Kishan Khaderia subsumes this amount. Undisputedly revenue has not challenged the order of the ld CIT (A) holding that income arising from transaction recorded in mob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal income at ₹ 1077,05,000/ . 024. Assessee approached the learned CIT A challenging the above addition. The learned CIT A held that for assessment year 2014 15 he has held that above addition is required to be made in the hands of Mr. Kishan Khaderia and not the assessee. 025. Learned AO aggrieved with that order, preferred appeal before us. The learned CIT DR supported the order of the learned AO and submitted that the said addition should have been made in the hands of the assessee as the mobile phone of the assessee is the source of information of such transaction which were not explained by the assessee. Therefore the finding of the learned CIT A to tax the above sum in the hands of employer of the assessee is erroneous. 026. Learned authorized representative submitted that the above income is not required to be added in the hands of the assessee as the learned CIT has merely reiterated his finding for assessment year 2014 15 wherein he has deleted the addition of ₹ 128 lakhs holding that the above income is required to be taxed in the hands of the employer of the assessee. He submitted that learned AO was not in appeal for assessment year 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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