TMI Blog2016 (3) TMI 925X X X X Extracts X X X X X X X X Extracts X X X X ..... late Authority erred in observing that transaction of speculation income and short term capital gain are not genuine and further that sales proceeds of share of Crazy Infotech amounting to ₹ 2,28,188/- and ₹ 2,45,416/-, respectively is income from other sources, without considering the submissions of the assessee. 2. During hearing of these appeals, the ld. counsel for the assessee, Shri Harish Agarwal, advanced arguments, which are identical to the ground raised. On the other hand, Shri V.S. Jadhav, ld. DR, strongly defended the impugned order by inviting our attention to the factual finding recorded in the assessment order as well as in the impugned order. 2.1. We have considered the rival submissions and perused the material available on record. Before coming to any conclusion, we are reproducing hereunder the relevant finding recorded in the impugned order for ready reference:- 3.2 Facts of the case and submission of the Ld. A.R. have been considered carefully. There is no dispute considering the facts that sum of ₹ 31,110/- constitutes the sum of ₹ 2,28,188j- assessed as speculation income and further payment dt.28.03.2007 by cheque ₹ 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i. 3.3.2 On the basis of the aforesaid orders of ITAT in case of Shri Mukesh Chokshi and his associates, it is a concluded fact that Shri Mukesh Chokshi is not doing any business of share transactions or stock brokering but he has provided only accommodation entries of share transactions and thus facilitated in helping various persons including the appellant for showing bogus Long Term Capital Gain and other incomes/losses as required by various persons. For accommodation entries provided by Shri Mukesh Chokshi and his associates, his net income @0.15% of total transactions has been shown as income and has been accepted by the ITAT. 3.3.3 The assessee is also one beneficiary of accommodation entry provided by Shri Mukesh Chokshi and his Associates. The entity used in this case is M/s. Alliance Intermediaries Network Ltd. Therefore, the speculative income and the Short term capital gains both are shown by the assessee without any underlying genuine transactions. The sum of ₹ 2,492/- shown as paid to Mukesh Chokshi is also a fictitious payment since it is only an accommodation entry and also made after a gap of about 9 months since the purchase of 2800 shares of Cra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment order. The assessee also responded to the show cause notice which has also been considered. Finally, the Assessing Officer treated the amount of ₹ 31,110/- (being purchase cost of 2800 shares) as unexplained money and added to the return income of the assessee u/s 69 of the Act, the so called profit was also treated as unexplained money and the differential amount of ₹ 2,28,245/- with respect to bogus purchases transaction was treated as income from other sources. 2.3. On appeal, before the ld. Commissioner of Income Tax (Appeals) affirmed the stand of the ld. Assessing Officer. The assessee is in further appeal before this Tribunal. 2.4. Under the aforementioned facts, there is no dispute to the fact that M/s Alliance Intermediateries and network Pvt. Ltd. is the group concern of one Shri Mukesh Chokshi. The Chokshi group had been providing bogus accommodation entries to the beneficiary. Some of the decisions have already been quoted by the ld. Commissioner of Income Tax (Appeals). During hearing, before us, the assessee has not confronted the observation made in the impugned order. In fact, Mr. Mukesh Chokshi was not doing genuine share transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated proceedings, in all the cases, of which the present four are a part, where the LTCG had arisen on the basis of the transactions through his companies. Toward this, he would take the Bench to the relevant part of the impugned order in the case of Girish C. Jogani, stating the impugned orders to be the same in all cases, different only in the figures. No other material to impugn the assessee s reliance on the said documents has been brought on record by the Revenue. Why, even cross examination of the deponent, specifically asked for, was not provided, and toward which he would advert to the letter dated 02.12.2013 (duly submitted on that date), submitted during the assessment proceedings (PB pgs. 10-14). The ld. CIT(A), in appeal, has made abundant reference to case law. The same is principally toward showing that the burden of proof, which is on the assessee, has been discharged, and that in the facts and circumstances of the case the credits are unproved. The same does not impugn the assessee/s case in any manner, even whose name does not appear in the statements of Shri Mukesh Choksi being relied upon. At this stage, on being asked by the Bench if the assessee had been suppli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven as admitted per the said depositions, and which is understood to be the substance thereof. The contention of the name being not specifically stated in the said statements, is thus of little consequence. In fact, the reassessment proceedings are not under challenge, so that the relevance of the materials with the Revenue, or the validity of the reasons recorded, is not in dispute. Again, as observed by the Bench, how could, even de hors the said statements, credence be given to the bills/contract notes, as furnished, when the registration of M/s. Alliance Intermediaries Network Pvt. Ltd., a sub broker affiliated to M/s. ISE Securities Services Pvt. Ltd., and through whom the purchase of the relevant shares is stated to have been made, stood cancelled as far back as on 19.02.2004. Further, the transactions were admittedly not carried out through the stock exchange, as again clarified by the National Stock Exchange (refer para 2.4.3 of the impugned order). What value, then, the said bills/contract notes, issued by such companies, which could not have acted as brokers or sub-brokers? The contract notes are, in terms of the law/procedure, even otherwise required to be time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agencies Pvt. Ltd. (in ITA No. 4999/Mum/2005 dated 29.08.2008 for A.Y. 2002-03); 3) M/s. Mihir Agencies Pvt. Ltd. (in ITA No. 4912/Mum/2005 dated 30.05.2008); and 4) M/s. Alliance Intermediaries and Network P. Ltd., (assessment order u/s.143(3) dated 12.11.2008 for A.Y.2007-08/by ACIT(OSD-1), Central Range-7, Mumbai)). That is, the tribunal, the final fact finding authority, has itself found, as a fact, that these companies were engaged in the business of providing accommodation entries to various entry seekers, so that only the commission at the stipulated rate could be assessed as income in their hands. By necessary, nay, direct implication, the entries/credits are not genuine. Coming to the facts of the case, it is observed that though the Revenue has made a clear and thorough analysis of the obtaining legal framework, relying on abundant case law, which has not been rebutted, the facts have not been similarly collated analyzed, with a view to determine the issue at large, which is principally factual, i.e., if the transactions are satisfactorily proved, toward satisfactorily explaining the impugned credit/s as to their nature and source, by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some binding decisions may be cited: CIT vs. Sri Meenakshi Mills Ltd. [1967] 63 ITR 609 (SC) Juggilal Kamlapat vs. CIT [1969] 73 ITR 702 (SC) CIT vs. Durga Prasad More [1971] 82 ITR 540 (SC) McDowell Co. Ltd. vs. Commercial Tax Officer [1985] 154 ITR 148 (SC) Workmen, Associated Rubber Industry Ltd. vs. ARI Ltd. [1986] 157 ITR 77 (SC) CIT v. Akshay Textile Trading Agencies (P.) Ltd. [2008] 304 ITR 401 (confirming that there was no departure from the principles/ratio of the decision in McDowell Co. Ltd.(supra) in UOI v. Azadi Bachao Andolan [2003] 263 ITR 706 (SC)) Twinstar Holdings Ltd.v. Dy. CIT [2003] 260 ITR 6 (Bom) It needs to be appreciated that though the Revenue has sought to impugn the transaction/s as bogus/not genuine, the issue is qua the applicability of section 68, whereby the statute itself casts a burden of proof on the assessee to satisfactorily explain the nature and source of a credit. The issue, which is purely in the realm of a factual matter, is thus whether the assessee has been able to satisfactorily prove the impugned credit, i.e., as would satisfy a man of normal prudence, acting reasonably, as where with regard to his ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature and source of the impugned credits. Toward this, reference has already been made to the order by the tribunal in Ratanchand J. Oswal Rishi R. Oswal (supra). Similarly, the tribunal in the case of Ziauddin A. Siddique Others vs. Jt. CIT (in ITA Nos. 4699 and 4700/Mum/2011 and others, dated 25.04.2014) on a factual analysis found the transactions through the Ahmedabad Stock Exchange to be sham, with in fact the market rates itself being rigged. 4. 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. Reference in this context may be made to, among others, the decision by the Hon ble Apex Court in the case of Kapurchand Shrimal vs. CIT [1981] 131 ITR 451 (SC). I decide accordingly. 5. In the result, all the appeals are allowed for statistical purposes. In the light of the aforesaid discussion and the judicial pronouncement discussed hereinabove, there is categorical finding in par ..... X X X X Extracts X X X X X X X X Extracts X X X X
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