2013 (10) TMI 557 - AT - Income Tax

Accomodation entries passed in the books – conversion of black money into white and bring the money in the books of accounts - Long term capital gains (LTCG) – Held that:- Outcome of investigations carried out by A.O., wherein it was found that M/s Gold Star Finvest Pvt. Ltd. is a registered sub-broker. However, the said broking company was not traceable/ available as the notice u/s 133(6) of the Act was returned unserved by the postal authority - The Assessing Officer further found that company's share of which have been claimed transacted by the assessee and who offered the dematerialization of its shares to the assessee did not respond the notice u/s 133(6) issued by him. Thus none of the evidence furnished by the assessee showing transactions of sale and purchase of shares deriving long term capital gain stands verified - During the course of search u/s 132(1) of the Income Tax Act, the statement of Shri Mukesh Choksi was recorded on oath wherein he said that he was engaged in the business of providing accommodation entries through various companies floated by him like Mahasagar Securities Pvt. Ltd., M/s Gold Star Finvest Pvt. Ltd. etc. , which all are run by him from the officer at 6 th Road Santacruz(E). It is pertinent to mention here that shares of M/s Buniyad Chemicals Ltd., Ahemdabad was also transacted through M/s Gold Star Finvest Pvt. Ltd. who was found to be engaged in providing accommodation entries.

In earlier years 2005-06 and 2006-07, the issue before the Assessing Officer was with regard to genuineness of long term capital gain earned on shares of M/s Talent Infoways Ltd. whereas during the years 2003-04 and 2004-05, the issue is with regard to shares of M/s Buniyad Chemicals Ltd., Ahemdabad - The ld. CIT(A) was not justified by relying on the findings of his predecessor and Tribunal given in its order for the assessment year 2005-06 and 2006-07 with regard to genuineness of sale of shares of M/s Talent Infoways Ltd. During the years under consideration, the controvery is with regard to shares of M/s Buniyad Chemicals Ltd., Ahemdabad which was not found to be registered at Stock Exchange and the broker through which share transactions were 19 made has categorically given statement that he was engaged in providing accommodation entries – Decided in favor of Revenue.