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Sudhir Balraj Jumani-HUF Versus ITO, Ward-7 (3) , Ahmedabad

2016 (9) TMI 655 - ITAT AHMEDABAD

Reopening of assessment - Held that:- As far as arguments of the ld.counsel for the assessee that there is no quantification of escaped income in the reasons recorded by the AO is concerned, we find no substance in it, because, the AO has duly quantified the income in Column no.6 and this complete form is in accordance with law and part of the reasons recorded by the AO. It contained various details i.e. name and address of the assessee, PAN, status, assessment year and many other things. From t .....

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rial jurisdiction. Moment, the assessee appraised him about his new address, jurisdiction to the AO having territorial jurisdiction over new address has been given. No prejudice is being caused to the assessee on the basis of this procedure. - bogus accommodation entries with regard to short-term/long term capital gain/loss - Held that:- The AO has directed the assessee to produce evidence demonstrating the genuineness of this transaction. The assessee failed to produce any documents. Firstl .....

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by Goldstar Finvest P.Ltd. indicating that the assessee has purchased shares. The assessee has not produced DEMAT account, and thereafter an additional circumstances was mentioned by the AO that Buniyad Chemicals went into liquidation and it was wound up on 9.7.1999. According to the AO no prudent businessmen would purchase shares of such company, and that will ever generate profit to an assessee. The assessee failed to produce share certificate numbers, distinctive numbers and how these shares .....

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us of establishing claim of genuine capital gain. - Decided against assessee. - ITA.No.1570/Ahd/2012 - Dated:- 4-8-2016 - SHRI RAJPAL YADAV, JUDICIAL MEMBER For The Assessee : Shri Tushar Hemani For The Revenue : Shri Dinesh Singh, Sr.DR ORDER Assessee is in appeal before the Tribunal against the order of the ld.CIT(A)-XIV dated 15.5.2012 for the Asstt.Year 2003-04. 2. In the first ground of appeal, the assessee has challenged reopening of the assessment. 3. Brief facts of the case are that the .....

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in the business of providing bogus bills in respect of purchase/sales of shares without any actual transaction. On detailed investigation of their cases, it came to the notice of the department that the assessee was also one of the beneficiaries of purchasing of long term capital gain by obtaining bogus payment of purchase/sales of shares of Buniyad Chemicals. This transaction was carried out by the assessee from the address of 703, Sarovar Complex, B/h. Hotel Classic Gold, Nr. Jain Temple, Nav .....

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objection of the assessee and rejected them. Record of the assessee was transmitted to the AO who has territorial jurisdiction over the assessee, i.e. where the assessee has been filing return, and ultimately, assessment order was passed by ITO, Ward-7(3), Ahmedabad on 27.12.2010 and addition of ₹ 3,99,070/- was made to the total income of the assessee. Appeal to the CIT(A) did not bring any relief to the assessee on this issue. 4. Before me, the ld.counsel for the assessee has raised two .....

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page no.14 of the paper book. He drew my attention towards section 149(1) and submitted that unless the amount is mentioned, the AO will not be able to fulfill the conditions mentioned in section 149(1). The assessment beyond four years should only be reopened when escapement of income is more than ₹ 1,00,000/-. On strength of these details, he contended that the reopening of the assessment is not in accordance with law, and therefore, the assessment order is not sustainable. 5. The ld.DR, .....

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fferent address and on the basis of the address available in the transaction, the AO having territorial jurisdiction over that address recorded reasons. There is no infirmity in the procedure followed by the department. 6. I have duly considered rival contentions and gone through the record carefully. I find that these very objections were raised before the AO also. The ld.AO has taken note of these objections in paragraph 7 and 8 of the assessment order. The ld.AO, thereafter, dealt with object .....

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d address of the assessee, PAN, status, assessment year and many other things. From the reasons, one has to find out whether the AO was possessing any information which could enable him to harbor a belief that the income has escaped assessment. On complete reading of the reasons, it is ascertainable that income has escaped assessment in the case of the assessee. As far as the objection with regard to territorial jurisdiction of the AO is concerned, I find that ITO, Ward-10(4) has recorded reason .....

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ef facts of the case are that the assessee had purchased 9000 shares of Buniyad Chemicals. According to the assessee, it had a long term capital gain of ₹ 3,93,356/-. This transaction of the assessee has been disbelieved and addition under the head income from undisclosed sources has been made. The AO has highlighted modus operandi of generation of alleged bogus long term capital gain. 9. Before adverting to the argument of the ld.counsel for the assessee, I deem it appropriate to take not .....

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urities Pvt. Ltd. and its related group of 34 companies (the prominent ones being M/s.Alliance Intermediaries & Net work Pvt. Ltd.,M/s. Mihir Agencies Pvt. Ltd, M/s., Goldstar Finvest Pvt. Ltd. etc all run by Mukesh Chokshi) were engaged in fradulant billing activities and in the business of providing bogus speculative profit/loss, Short Term Capital Gain/loss, Long Term Capital Gain/loss, commodities profit / loss on commodity trading (through MCX). The list of clients who have taken entrie .....

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id license as a broker to trade on any stock exchange as on date. It is verified during the course of search that transactions were not taken place at all on any stock exchange. Only fictitious bill were prepared in order to show that transactions were taking place on stock exchange. So far as entries of capital gains/loss are concerned, staff of companies prepared a list of scripts having seizable price difference over a period of time. When client approached the company for bogus delivery prof .....

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etc and then funds are transferred to the bank account of the broking company issuing the bill (Mahasagar Securities Pvt. Ltd, Gold-star Finvest Pvt. Ltd etc). The cheque equivalent to the amount of profit is issued to the client from the account of the broking company like Mahasagar, Goldstar etc, thus enabling the client to generate profit. 10. The aforesaid facts have been duly confirmed by Shri Mukesh M Chokshi in his statement recorded u/s. 131 on 11/12/2009. In reply to question No. 7 of h .....

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star Finvest Private Limited'- This is the name of Mukesh Choksi's company which has issued the bogus bill. 4. 'Period From': refers to the period for which the ledger is 5. 'Client': This is the name of the beneficiary who has taken entry from Shri Mukesh Choksi 6. Explanation of the various columns of the ledgers: S. No. Column Name Remarks 1 Date Refers to the alleged date of purchase/sale of share 2 Company Refers to the name of the scrip which has allegedly been boug .....

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actual purchase on the date shown in the ledger. 2. In cases of Long Term Capital Gain, if the sale is in F.Y. 2002-03 the bogus purchase would be shown in F.Y. 2001-02 (to ensure that the bogus bills show that the share has been held for over 12 months). However the actual cash which is to be laundered has passed hands only a few days prior to the alleged sale i.e. in F.Y. 2002-03 and should be taxed in that year. 3. If it is a case of speculation profit then either this has been done to genera .....

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Bills of the assessee We look at the bill of Sudhir Jumani HUF, 703, Sarovar Complex, Navrangpura, Ahmedabad, he has sold 9000 shares of 'Buniyad Chemicals Limited'tCompany under liquidation Sr No 137 of list published by The Official Liquidator. Hon'ble High Court of Bombay CP No. 24 of 1993 date of winding up 09-07-1999) on 25-04-2002. As there are only sale transactions in his ledger for the year, he would have had a bogus bill generated showing purchase 12 months before this date .....

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of shares entered into by beneficiaries through Mukesh Chokshi & his associates company were bogus. The list of all such beneficiaries were extracted from the stored data/books. The assessee is also one of the beneficiaries appeared in the list who had done transactions with the aforesaid group. 10. This finding of the AO had met concurrence of the ld.CIT(A). The ld.counsel for the assessee contended that addition was made on the basis of the facts revealed during the course of search carri .....

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s considered by the ITAT, Mumbai Bench in the case of Ms.Farrah Marker Vs. ITO, ITA No.3801/Mum/2011. He has placed on record copy of the above Tribunal s order. He also relied upon judgment of Hon ble Gujarat High Court in the case of Pr.CIT Vs. Chartered Speed P. Ltd. He placed on record copy of this decision (Tax Appeal No.126 of 2005). 11. On the other hand, the ld.DR relied upon the orders of the Revenue authorities. 12. I have duly considered rival contentions and gone through the record c .....

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Firstly, onus is upon the assessee to demonstrate that his claim towards long term capital gain is a genuine claim. The AO has not made reliance either upon the statement of Mukesh Chokshi or any other information from Mahasagar Securities Pvt. Ltd. He has made reference to the facts and circumstances revealed during the course of search, but he has deducted defects in the conduct of the assessee only. In para-13, he has specifically mentioned that the assessee has not submitted delivery notes, .....

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