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2015 (5) TMI 472 - ITAT MUMBAI

2015 (5) TMI 472 - ITAT MUMBAI - tmi - Addition u/s 68 - reopening of assessment - Held that:- 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” [2015 (5) TMI 460 - ITAT MUMBAI] wherein the Tribunal, in almost identical facts, while adjudicating the issu .....

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y the group companies of Shri Mukesh Chokshi and further on the basis of statement of Shri Mukesh Chokshi. - Decided against assessee.

Ingenuine transactions - 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. .....

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d 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 to assessment year 2008-09. The assessee through its grounds of appeal has agitated the addition of ₹ 4,25,00,000/- made under section 68 of the Income Tax Act (he .....

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rious companies floated by Shri Mukesh Chokshi. It was reported that the director of the said concern had admitted about introducing unaccounted income as share application, while receiving unaccounted money either in cash or by way of transfer of funds. Hence, notice under section 148 of the Act was issued to the assessee to reassess the escaped income. The assessee was asked to give name of the allottee companies & their addresses, name of the banks and cheque numbers and amount received a .....

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from such hawala companies was held as unexplained cash credits under section 68 of the Act and added to the total income. Being aggrieved by the order of the AO, the assessee preferred appeal before the CIT(A). 3. By the impugned order, the Ld. CIT(A) not only upheld the reopening of the assessment under section 147 of the Act but also confirmed the additions made by the AO under section 68 of the Act holding that the findings of the AO that the share application money received by the assessee .....

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overed 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 escapemen .....

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of Shri Mukesh Chokshi, Director of M/ s. Mahasagar Securities P.Ltd. was recorded during the search wherein Mukesh Chokshi had explained in detail the modus of operation of the accommodation entries racket being run by him by floating some 34 companies and admitted to be in business of providing the bogus accommodation entries. Further enquiries by the Investigation Wing also confirmed that many of the sub-broking companies floated by Shri Mukesh Chokshi actually did not carry out the transact .....

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well as M/ s. Gold Star Finvest P.Ltd were floated by Mukesh Chokshi only. Since it was admitted by Mukesh Chokshi that he was providing accommodation entries only through its various companies, accordingly a notice u/s. 148 was issued after recording the reasons. 4. As per the reasons recorded, we found that the AO was having sufficient reasons to believe that there was an escapement of income, accordingly, he was justified in reopening the assessment uls.147 of the Act. Hence, the ground No.1 .....

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of the assessee has submitted that the transactions in question were genuine transactions. The names, addresses etc. of all the allottees/share holders were duly disclosed. While inviting out attention to page 117 to 120 of the paper book, the Ld. A.R. has contended that the assessee company had allotted 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 .....

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ottee 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 fu .....

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he appellate authorities/Tribunal observing that the statement of Shri Mukesh Chokshi was a general statement and could not be corroborated by any material evidence and therefore the additions can not be made solely on the general statement of Sh. Chokshi, especially in the light of the evidences, confirmations etc. provided by the assessee to prove the genuineness of the transactions in question. The Ld. A.R. has relied upon the following decisions in this respect: 1. Jafferali K. Rattonsey vs. .....

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2013 10. CIT vs. Oasis Hospitalities Pvt. Ltd. (2011) 333 ITR 119 (Delhi) 11. Orient Trading Co. Ltd. vs. CIT (1963) 49 ITR 723 (Bom.) 12. ITO vs. JJ Multitrade Pvt. Ltd., ITA No.2158 & 2159/Mum/2014 13. Shri Jatin P. Ajmera vs. ITO, ITA No.7859/M/2011 14. Smt. Ananya Singh vs. ACIT, ITA No.6493/M/2014 7. On the other hand, the Ld. D.R. has contended that there was no direct evidence that the transactions in question were not genuine, however, the surrounded circumstances were enough to show .....

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on 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 ci .....

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0,000/- from M/s. Alpha Chemie Trade Agencies Pvt. Ltd. in respect of assessment year 2008-09. The concerns from whom such share capital was received were floated by Mr. Mukesh C. Choksi, who alongwith all related concerns was searched by Investigation Wing. In the statement issued to DIT(Inv) by Mr. Mukesh Choksi and Mr. Jayesh Sampat, they admitted that companies have received cash from corporate entities by charging a commission of 0.15% to 1.25% and they have issued cheque in favour of the c .....

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(ii) Funds of the share capital subscription are through banking channel and reflected in the bank statement. (iii) The allotment of the shares are recorded in the minutes of the company which are kept in accordance with the applicable provisions of the Companies Act 1956. (iv) All share subscription of the company are duly incurred by corporate entities having Income tax Permanent Account Number and are filing returns of income and are duly assessed and thus, identity of the shareholders is al .....

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er. - Copy of PAN Card and - Copy of IT acknowledgement evidencing filing of return. - Copy of Balance sheet. 3.2 Ld. CIT(A) after considering the submissions of the assessee has deleted the addition following the below mentioned decisions. 1. Bharti Syntex Ltd. vs. DCIT, ITA Nos. 172 & 173/Jp/2010 2. Creative World Telefilms Ltd. (2011) 333 ITR 100 (bom) 3. Lovely Exports, 6 DTR 308 (SC). The Department is aggrieved, hence, has filed aforementioned appeal. 4. After narrating the facts Ld. D .....

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ing 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 boo .....

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o addition was called for. Reliance was placed on following decisions: a) Orient Trading v/s. CIT (Bom) 49 ITR 723. b) Mukesh Marolia Case (53 SOT 220) c) CIT vs. Creative World Telefilims Ltd. (2011) 333 ITR 100 (Bom) d) ITO 14(3)1 v/s. Mrs. Radhika Ravindrakumar Toshniwal, ITA 1331/M/2010, e) Smt. Shashi K. Lahoti V/s. ITO 14(2)(3) (ITA No.7637/Mum/2013. f) Smt. Jyoti D.Shah v/s. ITO 21(1)(2) (ITA 1843/Mum/2012). 5.1 Copies of the decision in the case of ITO vs. Mrs. Radhika Ravindrakumar Tosh .....

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Vijaya Kavekar (2013 30 taxmann.com 412) the instruction will apply to earlier appeals also, therefore, the Departmental appeal should be dismissed. 6. We have heard both the parties and their contentions have carefully been considered. 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. According to Department as per statement recorded of Mr. Mukesh C. Chok .....

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preciating 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 sa .....

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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 the parties and having considered their rival contentions, we find that the AO has treated the said transactions as bogus transactions on the ground that a)The sale transactions were not on the floor of the ASEL but were off market transactions; b) The address of the M/s Buniyad Chemical Ltd. and M/s Talent Infoway Ltd. was the same a .....

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ction from stock exchange when the sale was not on stock exchange and relying upon it for making addition. 13. As regards points (b) & (c) above, we find that the assessee has filed relevant documentary evidence before the AO but the AO has failed to consider the same. The CIT[A] in his order has considered the said evidence and has come to the conclusion that the share transactions are genuine. However, as held by the Tribunal in the case of Rajinidevi A. Chowdhary [cited supra], which is o .....

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ances of the case, we do not see any reason to interfere with the order of the CIT[A] and the same is upheld . 5. Since the facts are similar to the earlier year and since assessee has furnished copy of the sale bills of the sale of Talent Infoway Ltd, and bank statements including purchase contract notes and other details on the basis of which CIT(A) held the transactions as genuine, we do not see any reason to interfere with the order of the CIT (A). Since AO also relied on the findings in the .....

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oksi 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 .....

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