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2015 (11) TMI 1126

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..... ar circumstances the additions have been confirmed, so that the issue in all the cases, to be decided on the facts and circumstances of each case, is with regard to the discharge or otherwise of the burden of proof on the assessee to satisfactorily explain the nature and source of the impugned credits The matter accordingly would stand to be restored to the file of the Assessing Officer for adjudication afresh, even as indicated during hearing. The assessees shall be allowed proper opportunity to state their case, as well as to meet that of the Revenue, which shall make available thereto all the materials being relied upon by it. - Decided in favour of assessee for statistical purposes. - I.T.A. No. 7344/Mum/2014, I.T.A. No. 7345/Mum/2014, I.T.A. No. 7346/Mum/2014, I.T.A. No. 7347/Mum/2014 - - - Dated:- 16-11-2015 - Shri Sanjay Arora, AM For the Appellant : Shri Jayesh Dadia For the Respondent : Smt. Bharati Singh ORDER Per Sanjay Arora, A. M. This is a set of four Appeals by different Assessees, agitating the dismissal of their appeals contesting their respective assessments u/s. 143(3) r/w s. 147 of the Income Tax Act, 1961 ( the Act hereinafter) .....

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..... on the other hand, submit that when the very person whose companies issued the relevant bills and contract notes, i.e., on the basis of which the truth of the transactions is being claimed, admits to the same being bogus, i.e., not representing actual transactions, how would it matter if the assessee s name is not specifically stated in the said statements? The assessee s plea of having been not supplied the copy of the said statements could not be countenanced in-as-much as there is nothing on record to show that the same were ever applied for. The assessee has not brought on record anything to rebut the Revenue s reliance on the said statements, which impinge directly on the validity of the documents being relied upon. 3. The parties have been heard and the record perused. The first thing observed in the matter is that the assessee has not been supplied a copy of the statements being relied upon by the Revenue, and on the basis of which it claims the impugned transactions as bogus. The assessee, however, claiming his name as not appearing therein, appears to be well aware of the contents of the said statements, which was in fact conceded to by the ld. AR during hearing, exp .....

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..... e present case there is considerable doubt if the transactions are market transactions, i.e., through the market/exchange. The assessee s plea for cross examination is, again, misconceived. In-as-much as the assessee relies on the evidences furnished by Sh. Mukesh Choksi or his companies, i.e., in the form of bills, contract notes, etc., he (Mr. Mukesh Choksi) is his witness. The said reliance however gets put paid in view of his subsequent statements, which may even be substantiated and corroborated by the evidences/materials found in search. The credibility of the bills and contract notes is even otherwise in serious doubt, with the transactions being not market transactions, so that the broker could not have acted as such, i.e., as a market intermediary. It is, thus, the assessee, on whom the onus shifts, and who was required to produce and examine him (Mukesh M. Choksi), if he wanted to rebut the Revenue s reliance on his subsequent statements. In fact, Sh. Mukesh Choksi as well as his companies stand black listed by SEBI on the ground of being engaged in clandestine activities, even as noted by the Tribunal in the case of Ratanchand J. Oswal Rishi R. Oswal (in ITA Nos. .....

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..... , in the matter, and which would require being suitably addressed. Whether the shares under reference were purchased from the market, or are off market transactions. What is the basis of the purchase price in the case of the latter? Who is the seller/s, from whom therefore the delivery would flow, and to whom the payment/s would be made? Is there any contemporaneous evidence to exhibit the purchase (as well as the rate), which is crucial also from the point of view that it is only where the holding period is for a minimum of 12 months that the gain arising on the transfer of the shares qualifies to be a LTCG. Like-wise, for the sale. Is the sale supported by market quote/s? What is the basis of the sale rate/s, which is several times the rate obtaining a year or so back, inasmuch as it was purchased thereat at that rate? Is there any justification on record for the sale (market) rate in terms of the credentials or fundamentals of the company? Who are the buyers of the shares, to whom the delivery thereof would be made and from whom the consideration flows, and who therefore represent the source of the credit. Where claimed as off-market transactions, the same could only be on prin .....

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..... -course by the materials relied upon, acting reasonably. Being, of-course, where and to the extent required/relevant, duly informed of the applicable law/procedure. The law in the matter is again well settled, and toward which some binding decisions may be cited: A. Govinda Rajulu Mudaliar v. CIT (1958) 34 ITR 807 (SC) Sreelekha Banerjee Othrs. v. CIT (1963) 49 ITR 112 (SC) Kalekhan Mohammed Hanif v. CIT (1963) 50 ITR 1(SC) CIT v. Durga Prasad More (supra) CIT v. Biju Patnaik (1986) 160 ITR 674 (SC) Sumati Dayal vs. CIT [1995] 214 ITR 801 (SC) CIT vs. P. Mohanakala Others (2007) 291 ITR 278 (SC) Then, again, whether the Securities Transaction Tax (STT) has been paid on the purchase and sale of shares. This is as it is only where the STT is chargeable, that an exemption u/s. 10(38) enures. No material has been brought on record by the assessee to establish its case, besides claiming reliance on the documents, and which gets impugned in view of the statements, the existence of which is not doubted; rather, accepted, requesting for cross examination. The Revenue, on its part, has though made out a case, has not brought on record all .....

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