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Smt. Falguni Sanghavi Versus ACIT, Circle 16 (2) , Mumbai

2016 (11) TMI 439 - ITAT MUMBAI

Reopening of assessment - income from undisclosed source - LTCG - Held that:- It is not in dispute that the assessee has purchased the 9500 shares of Talent Infoway Ltd. for ₹ 14,655/- vide bill dated 04.03.2003 (contract Note placed at page 23 of the paper book) and that the same have been sold for a total consideration amounting to ₹ 7,08,982/- in the year under consideration on 20.03.2004 and 26.03.2004 (details/summary placed at page 47 to 59 of paper book). Once the date and sou .....

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consideration is to be assessed under the head long term capital gain and we therefore delete the finding of the authorities below that this income be assessed as undisclosed income alongwith the addition of ₹ 8,679/- under section 69C of the Act on account of alleged commission @1.25% thereon. - Decided in favour of assessee - ITA No. 5847/Mum/2014 - Dated:- 23-9-2016 - Shri Jason P. Boaz, Accountant Member and Shri Sandeep Gosain, Judicial Member For The Appellant : Shri Rishabh Shah Fo .....

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,94,327/- on sale of shares of M/s. Talent Infoway Ltd. Subsequently, in view of the search and survey action conducted in the case of Shri Mukesh Choksi and his companies, it came to light that the said companies were engaged in the business of providing accommodation entries to various persons to book bogus capital gains. The Assessing Officer (AO), on receipt of information in this regard from the Investigation Wing of the Income Tax Department that the assessee is one of the parties who sold .....

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t had purchased the 9500 shares of M/s. Talent Infoway Ltd. through Goldstar Finvest Pvt. Ltd. vide bill No. CC/2003/044/21 dated 04.03.2003 for ₹ 14,655.21 and sold them in the year under consideration for a consideration of ₹ 7,08,982/-, thereby resulting in LTCG of ₹ 6,94,327/- which has been included in the computation of income attached to the return of income. The AO, however, did not accept the assessee s explanation and treated the said LTCG of ₹ 6,94,327/- as inc .....

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ent under section 147 of the Act and treating the LTCG of ₹ 6,94,327/- earned on sale of shares as income from undisclosed sources and consequent commission of ₹ 8,679/- @ 1.25% thereon. The learned CIT(A) apart from upholding the AO s action in reopening the assessment for A.Y. 2004-05, also upheld the AO s action in treating the LTCG as income from undisclosed sources as he was of the view that it is amply clear that the assessee had failed to produce details of purchase of shares .....

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involved in routing of her unaccounted income and converting it into allege LTCG through bogus transaction which remained on paper. The learned CIT(A) accordingly dismissed the assessee s appeal vide the impugned order dated 23.07.2014. 3. Aggrieved by the order of the CIT(A)-27, Mumbai dated 23.07.2014 for A.Y. 2004-05, the assessee has preferred this appeal raising the following grounds: - 1. On the fact and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirmin .....

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nd circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in making an addition u/s. 69C of the Income Tax Act, 1961 of ₹ 8,679/-on account of alleged commission paid in cash ® 1.25% of ₹ 6,94,327/-, without considering the facts and circumstances of the case. 4. The appellant craves leave to add, amend, alter or delete the said ground of appeal. 4.1.1 The learned A.R. for the assessee was heard in support o .....

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des that if the notice under section 148 is issued after the period of four years from the end of the relevant A.Y. 2004-05, i.e. after 31.03.2009, then the income chargeable to tax which has escaped assessment should be ₹ 1 lakh or more, whereas in the case on hand for the year under consideration, the income chargeable to tax that has escaped assessment is actually Nil , the only difference being the tax rate applicable. The learned A.R. for the assessee contends that section 147 of the .....

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ection 147 of the Act for reopening the case. 4.1.2 In respect of grounds 2 and 3, the learned A.R. for the assessee submitted that there is neither any dispute with respect to the purchase on 04.03.2003 and sale of 9500 shares of Talent Infoway Ltd. in the year under consideration nor purchase and sale consideration and all details in this regard to establish the genuineness such as; contract note for shares sold, bank statement reflecting amounts invested, investment account, details of transf .....

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not been offered for taxation is without basis and therefore the addition of the same as undisclosed income requires to be deleted, since he has not only brushed aside the stack of evidence which the assessee had filed, but also not given cogent reasons or basis for reaching the conclusion he did. 4.2 Per contra, the learned D.R. placed strong reliance on the impugned order of the learned CIT(A). 4.3.1 We have heard the rival contentions of both the parties and perused and carefully considered .....

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