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2016 (7) TMI 371 - ITAT MUMBAI

2016 (7) TMI 371 - ITAT MUMBAI - TMI - Reopening of assessment - undisclosed sale consideration received on the sale of shares - Held that:- In the present case, the D-mat account which evidences the sale of shares does justify an inference that the assessee was indeed in possession of the shares of M/s. Essar Oil Ltd. prior to its sale. There is no material on record to suggest that the sale consideration received by the assessee in question is on account of any transaction other than the sale .....

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confessed by Shri Mukesh Chokshi. Be that as it may, assessee has been consistently canvassing before the lower authorities that the statement of Shri Mukesh Chokshi be confronted to him. Find nothing on record to suggest that any specific statement Shri Mukesh Chokshi has been confronted to the assessee. - Another addition made by the Assessing Officer which is stated to have been the purchase amount of another scrip of M/s. Kiri Dyes and Mahar Poly find no material to suggest that any su .....

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as arisen from an order passed by the Assessing Officer dated 24/01/2014 under section 143(3) r.w.s. 147 of the Income Tax Act, 1961( in short the Act ). 2. In this appeal, the assessee has raised multiple Grounds of appeal, which I shall deal in seriatim. 3. The first issue relates to an addition of ₹ 8,80,332/- made by the income tax authorities on the ground that it was income from undisclosed sources. In this connection, brief facts are that the appellant is an individual, who was deri .....

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namely, M/s. Alliance Intermediaries & Network Pvt. Ltd. for a total net consideration of ₹ 1,78,580/-. Thus, assessee had declared a long term capital gain of ₹ 7,01,773/- on the sale of said shares of M/s. Essar Oil Ltd. 3.1 The Assessing Officer noted that certain information was received from the Investigation Wing as a consequence of a search and seizure actioncarried out under section 132 of the Act in the case of M/s. Mahasagar Securities Pvt. Ltd. on 25/11/2009. As per s .....

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ed to the statement recorded of Shri Mukesh Chokshi, wherein he had admitted of having provided accommodation entries to various persons. The Assessing Officer has observed that on verification of the data it was found that the assessee had obtained accommodation entries from M/s. Alliance Intermediaries & Network Pvt. Ltd. in respect of the transaction of shares of M/s. Essar Oil Ltd. As a consequence, the Assessing Officer reopened the assessment and passed an order under section 143(3) r. .....

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jectures and surmises. The Ld. Representative for the assessee referred to a detailed Paper Book filed, wherein the relevant documents, namely, contract note for purchases of shares, bank statement , D-mat account statement, ledger account of M/s. Hem Securities Ltd., ledger account of M/s. Alliance Intermediaries & Network Pvt. Ltd., etc. have been placed. On the basis of the aforesaid documents, it was sought to be pointed out that the purchase of shares was in the previous year relevant t .....

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k Pvt. Ltd. Be that as it may, Ld. Representative for the assessee pointed out that the sale of shares is duly reflected in the D-mat account, a copy of which has been placed in the Paper Book at page-8. It is further canvassed that the sale consideration has been received through banking channel, which is also evidenced by the copy of the bank statement placed at page-7 of the Paper Book as well copy of the ledger account of the M/s. Hem Securities Ltd. placed at page-9 of the Paper Book . It w .....

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d out that merely because the assessee has purchased the shares in off-market transactions, it cannot be a ground to disbelieve them so long as the transaction is duly supported by the contract notes and in the present case it is further evidenced by the factum of sale of shares. The Ld. Representative for the assessee further pointed out that the reliance placed by the Assessing Officer on the statement of Shri Mukesh Chokshi is not relevant in as much as no opportunity to cross-examine him was .....

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herein under identical circumstances, based on the investigations done in the case of Shri Mukesh Chokshi, the additions have been deleted. 5. On the other hand, Ld. Departmental Representative has reiterated the stand of the lower authorities by pointing out that the information received by the Assessing Officer, based on the investigation in the case of Shri Mukesh Chokshi, established that the purchase and sale of shares of M/s. Essar Oil Ltd. in as much as was a bogus transaction. 6. I have .....

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hases of such shares, which is claimed to have been made from one M/s. Alliance Intermediaries & Network Pvt. Ltd. The assessee claimed that 950 shares and 2500 shares of M/s Essar Oil were purchased by him on 04/04/2007 and 13/04/2007 respectively through M/s. Alliance Intermediaries & Network Pvt. Ltd. for a total consideration of ₹ 1,78,550/-. It is further claimed that such purchase was reflected in the balance sheet for the preceding year ending on 31/3/2008, copy of which has .....

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account of M/s. Alliance Intermediaries & Network Pvt. Ltd. of ₹ 1,78,854/-. Therefore, if on one hand, in the scrutiny assessment for assessment year 2008-09, the Assessing Officer does not challenge the acquisition of shares, it is quite inappropriate to hold such acquisition as bogus in the year when subsequently such shares are sold. In the present case, the D-mat account which evidences the sale of shares does justify an inference that the assessee was indeed in possession of the .....

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ntext, it is clear that there is no clinching material to say that the impugned transaction was bogus. Though a reference has been made to the investigation in the case of Shri Mukesh Chokshi, but no effort has been made by the Assessing Officer to demonstrate that qua the instant transaction of the assessee, any infirmity has been confessed by Shri Mukesh Chokshi. Be that as it may, assessee has been consistently canvassing before the lower authorities that the statement of Shri Mukesh Chokshi .....

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