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2016 (9) TMI 801 - ITAT AHMEDABAD

2016 (9) TMI 801 - ITAT AHMEDABAD - TMI - Addition u/s 69 - whether sale of shares was genuine, which was substantiated by bogus documents? - Held that:- No contention has been raised that the said Gwalior Tanks & Vessels Ltd was a viable company at the time of sale. This fact itself raises various questions as to who will give such substantial amount for the sale of shares of an allegedly worthless company. Merely because the shares are held by itself do not fit into realities about the sale am .....

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on’ble Supreme Court in the case of Sumati Dayal vs. CIT, reported in (1995 (3) TMI 3 - SUPREME Court ), have not been followed while awarding the relief by ld. CIT(A). Since the assessee has credited the amount of sale in its books of account which may represent the allegedly bogus sales consideration floated from entity which is floated by the said group, the case may fall within the parameters of Section 68 also. In view of these facts and circumstances, I am inclined to set aside the matter .....

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R This appeal by the Revenue and the Cross-objection thereof filed by the assessee are directed against the order of the Commissioner of Income- Tax (Appeals)-XI, Ahmedabad dated 07.05.2012 for AY 2004-2005. 2. Assessee has withdrawn the Cross-objection filed by her; therefore, the Cross-objection filed by the assessee is dismissed as withdrawn. 3. The grounds raised by the Revenue read as under:- i. The ld. CIT(A) has erred in law and on facts in deleting the addition made by the assessing offi .....

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in providing bogus short term and long term capital gains, share application money, profit/loss on commodities trading etc. under the tutelage of one Shri Mukesh Chokshi. Assessments were reopened and the assessee was asked to explain the sale amounting to ₹ 45,51,369/- of Gwalior Tanks & Vessels Ltd which was found to be a briefcase company. The Assessing Officer, after examining the issue, held that the said transaction was bogus transaction and made the addition of the sale amount, .....

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share transactions were bogus and mere accommodation entries. In view of the above fact, the claim of assessee showing the income under the head LTCG is not true and hereby rejected in view of the facts stated above and accordingly same is assess under 69 of the IT Act. A show-cause notice was issued and served why capital gain and share transaction should not assessed under 69 of the IT Act. The explanation of the assessee stating that section 69 does not apply as the sale of shares were alrea .....

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ture of investment is a fraudulent in nature and there is no genuineness and also the persons with whom these transactions were entered has agreed that these were bogus transactions and were accommodation in nature. Therefore entire amount of ₹ 45,51,396/- is assessed under unexplained investment as per 69 of the IT Act. 4. Aggrieved, the assessee preferred first appeal challenging validity of reopening and merits of the addition. 5. The ld. CIT(A) upheld the validity of reopening; however .....

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he year 2003-04. The sale consideration of these shares were received through banking channel. Long term capital gain on the sale of these shares were duly recorded in the balance sheet for F.Y. 2003-04. Long term capital gain was duly declared and assessed in the A.Y. 2004-05. These are clinching evidences which prove that shares were held by the appellant for about ten years. On the basis of above mentioned unimpeachable evidences, I hold that shares were genuinely held by the appellant and lo .....

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are generally completed within a matter of months and in the case of arranged LTCG transactions are completed within a span of 12 to 15 months. Organized transactions cannot have life span of 10 years. In the organized LTCG transactions, bonus shares are generally not received. In the organized transactions all evidences, which is available on record cannot be managed. In view of these facts, I am of the considered view that transactions vide which LTCG of ₹ 35,61,396/- had accrued to the .....

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he Assessing Officer had applied Section 69 wrongly/by mistake, the ld. CIT(A) could have corrected the same inasmuch as all the facts/details in this regard were on record. It has not been disputed that by the time of sale of shares, the said Gwalior Tanks & Vessels Ltd had become a defunct and worthless company and its stock did not carry any value. The moot point is how could the assessee get a sale consideration of Rs. ₹ 45,51,396/- for worthless shares. What was in the book was a .....

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ification of scrutiny and assessment and including on the mistake of Assessing Officer which constitute a part of statutory obligation enshrined in the Income-tax Act. Besides, assessee himself before the ld. CIT(A) had raised following ground:- The learned AO has also grievously erred in not furnishing the copy of material on the basis of which the reassessment has been framed and also in not granting an opportunity of cross-examination of the person whose statement has been relied upon. The im .....

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conclusion based on assumptions and without appreciating the ground raised. Any economic violations, human conducts, surrounding circumstances and preponderance of possibilities should be necessarily examined. Therefore, the order of ld. CIT(A) may be reversed. 8. The ld. Counsel, on the other hand, contends that the shares in question were held since 1993-94. The share transactions were done through a broker and the consideration having been received by account payee cheque, section 69 is not a .....

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