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2015 (3) TMI 1128 - ITAT MUMBAI

2015 (3) TMI 1128 - ITAT MUMBAI - TMI - Addition u/s 68 - ingenue purchase of shares - Held that:- We found that during the year assessee has purchased 67.200 shares of Karuna Cables Ltd. from Alliance at market rate for ₹ 10,15,405/-. Copies of contract notes and bills issued by Alliance towards purchase of shares were placed on page 12-17 of compilation. Copy of ledger account for the broker M/s. Alliance Intermediaries & Network Ltd. in the books of the appellant for the period from 01. .....

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shares of Karuna Cables were received in the demat Account of the assessee on purchase and then transferred to the DP account of the assessee maintained with the broker Rajidas Nagarmal Consultants Pvt. Ltd. through whom sales have been effected on the stock exchange platform. We also found that in the instant case, only purchase has been effected from Alliance, whereas sale has been effected through another broker i.e. M/s. Ramjidas Nagarmal Consultants Pvt. Ltd. who has no connection with Mr. .....

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okshi. However the Ld. AO could not make available Mr. Mukesh Chokshi for cross examination.

Thus purchase and sale of shares by the assessee was a genuine transaction, and hence, addition made by the AO cannot be endorsed. - Decided in favour of assessee. - ITA No. 6493/M/2014 - Dated:- 11-3-2015 - SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER For the Appellant: Shri Ajay Singh (AR) For the Respondent: Shri Asghar Zain (DR) ORDER Per Sanjay Garg, Judicial .....

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M/s. Mahasagar securities Pvt. Ltd and its related group of 34 odd companies out of which the prominent are being M/s. Alliance intermediaries and net work Pvt. Ltd, M/s. Mihir Agencies Pvt. Ltd, M/s. Gold Star finvest Pvt. Ltd, M/s. Richmond Securities Pvt. Ltd. etc all run by Shri. Mukesh M Chokshi, were found to be engaged in bogus billing activities and in the business of providing bogus speculation profit/loss, commodities, Profit/loss on commodity trading (Through MCX) and had been contin .....

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s to the extent of ₹ 10,16,166/- with M/s. Alliance intermediaries and Net work Pvt. Ltd during the F.Y.2004-05 relevant to A.Y. 2005-06. The assessee had purchased shares of Karuna Cable Ltd. 3. Search action u/s 132 of the Income-tax, 1961 was also carried on Mukesh Chokhi, Director of M/s Alliacne Intermediatary Pvt. Ltd, wherein he has accepted that he was indulged in profiting bogus billing and bogus gain and loss through stock exchange and commodity exchange. In the ledger account of .....

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the assessee and which had been brought in the books of the assessee. Accordingly the AO made an addition of ₹ 2,08,693/- u/s.68 of the I.T. Act. 5. By the impugned order, the Ld. CIT(A) held that the sale proceeds of shares received by the assessee amounting to ₹ 12,27,623/- was unexplained cash credit. The CIT(A), therefore, directed the AO to assess ₹ 12,27,623/- as income from other sources from the bogus shares transaction. The income assessed by AO was accordingly enhanc .....

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and Network Pvt. Ltld., as placed at pages 18-20 of the paper book. The Ld. AR also highlighted copy of demat statement of ICICI bank and copies of Sale Bills and Contract Notes for sale of shares of Karuna Cables Ltd. to substantiate its claim for genuine purchase and sale. Assessee invited our attention to the ledger account copy of the broker Ramjidas Nagarmal Cons. P. Ltd. in the books of the assessee for the period from 1/4/2004 to 31/3/2005. Copy of the Bank Statement of ICICI Bank showing .....

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profit as Short Term Capital Gain (STCG) taxable @10% u/s.11A of the Income Tax Act,1961. 9. As per the Ld. AR there is not even single evidence with the AO which points out that transaction in question is not genuine. The Ld. AO made its own presumption and held that transaction apparent is not real without any basis. 10. On the other hand, Ld. DR relied on the facts recorded by the Lower Authorities in their respective order. 11. We have considered rival contentions and carefully gone through .....

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n the books of the appellant for the period from 01.04.2004 to 31.03.2005 and 01.04.2005 to 31.03.2006 alongwith its confirmation of accounts was also placed at pages 18-20 of compilation. Bank statement of the assessee whereby the payments made to the broker have duly been reflected, were also enclosed in the paper book. 12. We also found that the above share were credited in the demat Account of the assessee held with ICICI Bank, copy of demat statement was placed on page 21-22 of compilation. .....

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nts Pvt. Ltd. who has no connection with Mr. Mukesh Chokshi and there is nothing on record which suggests that M/s. Ramjidas Nagarmal Consultants Pvt. Ltd. has issued bogus bills to the assessee or above sale transaction is not genuine. With regard to the statement of Mr. Mukesh Chokshi recorded, it was contended by Ld. AR that in the statement of Mr. Mukesh Chokshi, the assessee was not named. Further, during the course of assessment proceedings, the assessee had requested the ld. AO to allow a .....

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the Tribunal has the action of the CIT(A) in deleting the additions by observing as under:- "5.1. After perusing the material available we are of the opinion that considering the facts and circumstances of the case, the order passed by the FAA does not suffer from any legal infirmity. Hon'ble Bombay High Court in the case of Sharada Credit and Mukesh R Marolia has upheld the orders of the ITAT, Mumbai. In those cases it has been held that shares purchased/sold in the off market cannot b .....

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shares is accompanied by this kind of evidences the genuineness of the said transactions cannot be doubted. Non-payment of SIT cannot be and should not be basis for making addition of the section 68 of the Act. FAA has categorically held that all the necessary details about purchase and sale of shares were made available to the AO during assessment proceedings. We have perused the case laws relied upon by the AR. In the case of Mukesh R Marolia (supra) Hon'ble jurisdictional High Court has h .....

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ompanies to the effect that the shares were in-fact transferred to the name of the Assessee. In these circumstances, the decision of the ITAT in holding that the Assessee had purchased shares out of the funds duly disclosed by the Assessee cannot be faulted. Similarly, the sale of the said shares for ₹ 1,41,08,484/- through two Brokers namely, M/s Richmond Securities Pvt. Ltd. and M/s. Scorpio Management Consultants Pvt. Ltd. cannot be disputed, because the fact that the Assessee has recei .....

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