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2015 (5) TMI 472

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..... ctions - Held that:- The assessee had filed evidence to support the receipt of share application money which was supported by copies of share application money, confirmation from shareholder and other documents. To further support, the assessee has filed copy of its bank account to contend that there are no cash deposits or withdrawals. In view of the above stated legal position and in the light of reliable evidences brought on record by assessee to substantiate identity, genuineness and creditworthiness of shareholders, which have not been controverted by the Revenue, the additions made solely on the basis of general statement of Shri Mukesh Chokshi cannot be held to be justified and the same are accordingly ordered to be deleted. - Decided in favour of assessee. - ITA No.584/M/2015 - - - Dated:- 15-4-2015 - Shri R.C. Sharma And Shri Sanjay Garg JJ. For the Appellant : Shri Jitendra Jain, A.R. For the Respondent : Shri Neil Philip, D.R. ORDER Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 26.11.2014 of the Commissioner of Income Tax (Appeals) [(hereinafter referred to as CIT(A)] relevant .....

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..... contentions of the Ld. Representatives of both the parties and have also gone through the records. So far the issue relating to the reopening of the assessment proceedings is concerned, the Ld. A.R. of the assessee has been fair enough to admit that the issue was squarely covered against the assessee by the decision of the co-ordinate bench of the Tribunal in the case of Smt. Jyoti D. Shah ITA No.1843/M/2012 decided on 18.12.14 wherein the Tribunal, in almost identical facts, while adjudicating the issue of reopening on the basis of statement of Shri Mukesh Chokshi and further on the basis of details obtained during the search by the investigation wing, has held that under the circumstances the AO was having sufficient reason to believe that there was an escapement of income and accordingly he was justified in reopening the assessment under section 147 of the Act. The relevant findings of the Tribunal relating to the issue of reopening in the case of Smt. Jyoti D. Shah (supra) for the sake of convenience are reproduced as under: 3. Rival contentions have been heard and record perused. There was a search undertaken in the case of M/s Mahasagar Securities P.Ltd. and its gro .....

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..... ted 2.07 crore equity shares of ₹ 10/- each. Out of the 35 allottees, the Revenue has disputed the transactions relating to 13 parties only. He has further stated that the entire case of the department was based on the general statement of Shri Mukesh Chokshi. The name of the assessee did not appear in the statement of Shri Mukesh Chokshi. The identity, creditworthiness and genuineness of transactions were duly proved by the assessee. The assessee had duly furnished the copies of the various documents such as allotment letters, copies of application form for allotment of shares, confirmation letters from the respective shareholders, the copies of the resolution of the respective allottee companies, the balance sheet and Profit Loss account of the allottee companies as well as the allotment letter issued etc. The payment was received by cheque and the PAN numbers of the allottees were also provided. He has drawn our attention in this respect to the paper book pages 2 to 113 which are the copies of the above stated details in relation to the allottees, the genuineness of transactions relating to whom has been disputed by the Revenue. The Ld. A.R. of the assessee has further s .....

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..... copies of form for allotment of shares, confirmation of shareholders and other documents as mentioned above. The department has relied upon the general statement of Shri Mukesh Chokshi. However, it has been contended by the assessee that in none of the statement recorded by the department of Shri Mukesh Chokshi, the name of the assessee appears. Further that all the money was received through account payee cheques which has not been disputed by the Revenue. In series of decisions as referred to above, wherein, the additions were made on the general statement of Shri Mukesh Chokshi, the Tribunal, after considering the facts and circumstances and the evidences produced by the assessee to prove the genuineness of the transactions, has deleted those additions. For the sake of completeness, we would like to reproduce the observations of the Tribunal in the case of JJ Multitrade Pvt. Ltd. (supra). 3. The assessee is engaged in the business of financial services. It received share capital subscription of ₹ 10,00,000/- from M/s. Talent Infoway Ltd. M/s.Buniyad Chemicals Ltd. in respect of A.Y 2007-08 and ₹ 5,00,000/- from M/s. Alpha Chemie Trade Agencies Pvt. Ltd. in re .....

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..... ent is aggrieved, hence, has filed aforementioned appeal. 4. After narrating the facts Ld. DR pleaded that Ld. CIT(A) has wrongly deleted the addition and his order should be set aside and that of AO be restored. 5. On the other hand, it was submitted by Ld. AR that assessee has submitted the copies of various statements recorded by the Department of Mr. Mukesh C. Choksi, which are dated 25/11/2009, 11/12/2009, 3/2/2010, 14/05/2010 and 16/3/2012 and are submitted from pages 135 to 169 of the paper book and as per submissions made by the assessee before AO assessee s name was not appearing in any of the statement and such contention of the assessee has not been controverted by the Revenue till date. It was further submitted that bank account of the assessee firm was also submitted to show that there was no cash withdrawals or deposit. Reference was made to page 22 to 25 of the paper book in which share application money has been deposited. The assessee has also furnished details of the shareholder companies at page 26 to 32 of the paper book and pages 65 to 71 of the paper book in respect of Talent Infoway Limited and M/s.Buniyad Chemicals Ltd., which include resolution, confi .....

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..... tion. Ld. CIT(A) after appreciating the evidences submitted by the assessee and relying upon certain decisions has come to the conclusion that such addition was not called for. On the basis of the similar statement other transactions entered into by other assessees with the concerns of Mr. Mukesh C. Choksi were considered as bogus and this issue had come before the Tribunal and Tribunal after considering the facts has deleted those additions. For the sake of completeness relevant observations of the Tribunal from the said decisions are reproduced: (i) ITO vs. Radhika Ravindrakumar Toshniwal (supra) - In the said case addition of ₹ 26,73,536/- was made in respect of sale of shares of M/s. Talent Infobay Ltd. and the same was treated as bogus transaction. The Tribunal deleted the addition with the following observations: 4. At the outset it was submitted that the similar issue was agitated in assessment year 2005-06 in the husband s case on the basis of which the learned CIT (A) also examined the issue and deleted the addition. In the order of the ITAT in ITA No.5302/Mum/2008 for assessment year 2005-06 in assessee s husband s case is as under: 11. Having heard both .....

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..... learned CIT (A) also deleted the addition based on the same, we do not see any reason to interfere with the order of the CIT (A). Accordingly the Revenue grounds are dismissed. 6. In the result appeal filed by the Revenue is dismissed. (ii) In the case of Smt. Jyoti D. Shah vs. ITO an addition of ₹ 13,13,256/- was made in respect of sale of shares of M/s. Buniyad Chemicals Ltd. as the same belong to concerns of Mr. Mukesh C. Choksi and the said addition was deleted by the Tribunal with the following observations. 6. The AO has not considered the supporting evidences during the course of assessment before concluding that the assessee too was actively involved as a beneficiary by paying cash to the Mukesh Choksi group. The learned Assessing Officer had merely relied on the fact that the main person of the @ group, Shri Mukesh Choksi, had admitted that all the transactions carried out by his various companies were bogus and he only provides accommodation bills. 7. Learned AR also placed reliance in the case of Shri Anantrai B Shah vs. ITO 21(1)(1), Mumbai vide IT Appeal No. 1842 of 2012, order dated 14/12/2012, wherein it was held that Shri Mukesh Choksi has issu .....

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