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2016 (4) TMI 565 - ITAT MUMBAI

2016 (4) TMI 565 - ITAT MUMBAI - TMI - Addition on LTCG - additions only on the basis of information received from DDIT (investigation) Bombay in respect of search action - Held that:- In the present case by virtue of independent documents as referred in paper book the assessee has proved the genuineness of the share transaction and there was no justification to disallow the claim of the assessee in respect of long term capital gain merely on the basis of information received from DDIT which is .....

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Tax (Appeals)- 30, dated 03.08.2012 for A.Y. 2003-04 on the following grounds of appeal. 1. Based on the facts and circumstances of the case, as well as in law, the Learned CIT(A) has erred in confirming the action of the Leaned Assessing Officer in reopening the case u/s 148 of the Income Tax Act, 1961, on the basis of the statement of a third party, without considering the merit of the case. 2. Having regard to the facts and circumstances of the case, as well as the law, the Learned CIT(A) ha .....

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ts of the case are that the return of income declaring total income of ₹ 3,30,754/- was filed on 27.08.2003. The return was processed under section 143(1)(a)of the Act. The case was subsequently reopened under section 147 and a notice under section 148 was issued on 30.03.2010 after duly recording the reasons for the same. Later on the case was selected for scrutiny and notice under section 143 (2) was issued and served on the assessee. Necessity details were called upon from the assessee .....

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he CIT(A) after considering the case dismissed the appeal vide its order dated 03.08.2012. 4. Aggrieved by the order of CIT(A) the assessee filed the present appeal before us on the grounds mentioned herein above. 4. At the very outset, ld. AR appearing on behalf of assessee submitted at par that he did not want to press ground no. 1 and 3 therefore considering the request of ld. AR we dismiss ground no. 1 and 3 as not pressed. Ground No.2 5. Ld. AR representing the assessee submitted that the A .....

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share transaction of M/s. Buniyad Chemicals and M/s. Jay Kay Dee Industries Ltd and since both the afore mentioned companies were controlled by Shri Mukesh Chokshi therefore, the AO while believing the statement of Shri Mukesh Chokshi had held that the transaction of assessee with M/s. Buniyad Chemicals and M/s. Jay Kay Dee Industries Limited are bogus, therefore, the AO has erroneously made the additions on the basis of the statement of Shri Mukesh Chokshi . Ld. AR also drawn our attention to .....

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ered companies and the activities and administration of the registered companies are governed by Companies Act in India. Ld. AR also drawn our attention to the judgement rendered by ITAT Mumbai Bench in ITA No. 1175/Mum/2012 and ITA No. 1176/Mum/2012 wherein the Hon ble ITAT has dealt with the similar situation and decided in favour of assessee. On the other hand ld. DR relied upon the orders passed by AO as well as CIT(A). 6. We have heard the counsels for both the parties and we have also peru .....

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e in below: I have heard the parties and perused the record. The Ld. Counsel submits that in respect of the 'Shares Scam' alleged to be involved by Shri Mukesh Chokshi actions were taken against many persons disallowing their claim in respect of long-term capital gain and shortterm capital gain. He submits that on identical set of facts the issue has been considered by the Tribunal. The Ld. Counsel filed the copies of the Tribunal decision by way of compilation as under: i) Mukesh R. Mar .....

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also proved that the shares were sold through the share broker and he produced the proof for the same. The identical situation has been considered by the ITAT C Bench, Mumbai in the case of Chandrakant Babulal Shah (supra). The operative part of the order of the Tribunal is as under: '7. We have considered the submissions of the rival parties and examined the record. The case relied upon by the learned Counsel are not directly applicable to the facts of the case as in those cases the sale p .....

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e assessee had indeed earned speculation profit by sale of APTECH shares which the Assessing Officer has not doubted. Further the assessee also suffered speculation loss as stated above in February, 2001 and debit and credit entries pertaining to same broker were shown in the balance sheet in the return filed for the AY 2001-2002 in August, 2001. There is also a mention of purchasing of shares of the company in the return. It is also on record that the said company vide letter dated 30-6-2000 ha .....

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nd his group of companies, mainly Gold Finvest Pvt. Ltd. Richmond Securities and Alembic Securities, which are dealing in interconnected stock exchange/ NSC. Most of the enquiries pertains to the transactions in interconnected stock exchange and sale of shares In the company viz., Rashel Agro Tech Ltd. The enquiry in the said group of companies was with reference. to the issuance of bogus , purchase and sale bills and accommodating various parties in earning the capital gains. However, as submit .....

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ted in the assessment order itself. The main reliance is on question No. 5 which is as under: "Q.5 : Please give the details of bills of profit issued by your company as stated above. Ans: These bills numbers Bills No. CC/2000/16/12501 dt.18-4-2000 which shows that B.87610.85 payable to Shri Chandrakant D. shah. There is another Bill No. CC/2001/07/164 (N) dt.20/2/2001 in which ₹ 89602 was receivable by Shri Chandrakant B. Shah. These bills are issued showing fictitious profit and the .....

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indicate that they were capital gains earned by the assessee as speculation profits and in question No. 4 in the statement Mr. Mukesh Chokshi admits the purchase of 10500 shares of Rashel Agro Tech, Ltd. made out of adjusted share profits and therefore confirmed that this is an 'adjustment transaction). In view of this statement in question Nos. 4 and 5) we are unable to understand how the transactions becomes a bogus one. There is no evidence except this oral statement which is also not su .....

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st Ltd in the statements. In view of the documentary evidence in favour of the assessee, we are unable to accept the contention of the Assessing Officer based on the statement which is also un- supported by any other evidence to deny the benefit of purchase of shares by the assessee on 8-4-2000. Not only that the Assessing Officer has also gave credit for the same amount of purchase of shares at cost and did not treat the sale proceeds as bogus/unaccounted income. The only action taken by the As .....

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eipt of money of the appellant. Hence, Assessing Officer had rightly added the amount by and the action of the Assessing Officer in making this addition is confirmed treating it as STCG)). In arriving at this conclusion, the CIT (A) presumed that assessee could have paid full payment of 16 lakhs by way of cash which was not the case of the Assessing Officer either. There is no evidence even to presume these observations of the CIT (A) as stated above. 7. The facts are identical in this case as i .....

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roduced here in below: I have heard the parties. In this case also the assessee has declared the long-term capital gain in respect of the sale of the shares of M/ s. Buniyad Chemicals Ltd. It was claimed that the shares were sold through M/ s. Goldstar Finvest Pvt. Ltd. There was investigation against Shri Mukesh Chokshi who was the mentor and the main person in the entire shares' 'Scam'. The facts are identical as in the case of Smt. Durgadevi Mundra in ITA No.1175/M/2012. Hence, to .....

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