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2016 (11) TMI 442 - ITAT MUMBAI

2016 (11) TMI 442 - ITAT MUMBAI - TMI - Addition u/s 68 - shares purchased out of the gain received - reopening of assessment - contention of the assessee that the speculation gain earned on sale and purchase of shares of Mastek Limited and Wipro Limited was invested in making investment in shares of Buniyad Chemicals Limited and Talent Infoways Limited - Held that:- As contented by the assessee that said speculation gain on purchase and sale of shares of Mastek Limited and Wipro Limited had alr .....

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ad in fact invested speculation gain of ₹ 1,00,044/- earned on sale and purchase of shares of Mastek Limited and Wipro Limited on 10-04-2003 in making investment in the shares of Buniyad Chemicals Limited and Talent Infoways Limited and if this contention of the assessee is found to be correct then the addition of ₹ 1,00,518/- as made by the AO and confirmed/sustained by learned CIT(A) shall stand deleted. - Decided in favour of assessee for statistical purpose. - I .T.A. No.482/Mum/ .....

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ngs before the learned CIT(A) arising from the assessment order dated 19th October, 2011 passed by the learned Assessing Officer (hereinafter called the AO ) u/s 143(3) r.w.s. 147 of the Income Tax Act,1961 (Hereinafter called the Act ). 2. The grounds of appeal raised by the assessee in the memo of appeal filed with the Income Tax Appellate Tribunal, Mumbai (hereinafter called the Tribunal ) read as under:- On the facts and in circumstances of the case, the Commissioner of Income Tax (Appeals) .....

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s a search operations conducted upon the Mahasagar Securities Pvt. Ltd. by the Revenue u/s 132 of the Act on 25th November, 2009 and on the basis of information received from the Investigation Wing of the Revenue, the case of the assessee was reopened and notice u/s 148 of the Act was served upon the assessee on 21st March, 2011. The reasons for reopening of the assessment was that the assessee has not shown the transaction in Buniyad Chemicals and Talent Infoways Ltd. amounting to ₹ 1,00, .....

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nt Infoways Ltd., hence, there were reasons to believe that the income of ₹ 4,02,652/- has resulted in escapement of income. The reasons recorded for reopening were supplied to the assessee and the assessee submitted that only credit side of the bills are added and hence the Revenue erred in considering only credit side of the bills. It was submitted that during the relevant period shares of Mastek Ltd. and Wipro Ltd. were purchased and sold and its gain is shown as speculative profit of & .....

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oncerns of Mahasagar Securities Private Limited through their Directors namely Sh. Mukesh Chokshi and Sh. Jayesh K. Sampat were indulging in bogus billing activities for providing bogus speculation profit and loss, short term and long term capital gain and loss, share application money, commodities profit & loss on commodity trading etc. for many years . The DDIT had conveyed this information along with the details of the beneficiaries and it has been stated that the assessee was one of the .....

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rded u/s. 131 of the Act has admitted that the transactions in the shares are bogus and are accommodation entries and hence the bills for purchase and sale of shares are bogus. The list of beneficiaries who had taken accommodation from the group concern of M/s Mahasagar Securities were also available with the A.O. from the computer data seized from the offices during the search operation. One of the clients name appearing in the list of beneficiaries of the fraudulent business activities of M/s .....

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it side of the bills are added while the AO observed that the searches were conducted u/s 132 of the Act on Mahasagar Securities Private Limited whereby it was found that the said concern is engaged in providing bogus bills and accommodation entries and hence proof of sale and purchase of bills of Wipro Limited and Mastek Limited were rejected. In the statement recorded u/s 131 of the Act , the Director of the concern Mahasagar Securities Private Limited admitted that the said concern is engaged .....

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an amount ₹ 202090/- to the income of the assessee as an income from other sources of the assessee u/s 68 of the Act, vide assessment order order dated 19-10-2011 passed by the AO u/s 143(3) read with Section 147 of the Act. . The assessee contention that she has shown the shares of Buniyad Chemicals and Talent Infoways as an investment in Balance Sheet was also rejected by the AO on the same grounds as was done to reject the sale and purchase of shares of Wipro Limited and Mastek Limited. .....

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A.O. u/s. 143(3) read with Section 147 of the Act, the assessee carried the matter in appeal before the ld. CIT(A). 5. The ld. CIT (A) after considering the submissions of the assessee held that on perusal of bills issued by Mahasagar Securities Private Ltd. reveals that the alleged transaction for purchase and sale of shares of Mastek Limited and Wipro Limited were not carried on through the stock exchange nor does it carry the details of the settlement period. The investigation by the Investig .....

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hown receipt of only ₹ 1,00,044/- which has been offered to tax by the assessee and hence no additions as made by the AO can be sustained. Thus, the learned CIT(A) deleted the addition of ₹ 2,02,090/- as was made by the AO to the income of the assessee. With respect to the investment in Shares of Buniyad Chemicals Limited and Talent Infoways Limited which were reflected by the assessee as an Investment in the Balance Sheet, it was observed by the learned CIT(A) that transaction in pu .....

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e appeal of the assessee on this ground and held that the source of investment of ₹ 1,00,518/- does not stood explained and the addition was upheld by learned CIT(A) vide appellate orders dated 08-10-2013. 6. Aggrieved by the appellate orders dated 08-10-2013 passed by the ld. CIT(A), the assessee is in further appeal before the Tribunal. 7. The ld. Counsel for the assessee submitted that the assessee has undertaken purchase and sale of shares of Mastek Ltd. and Wipro Ltd. on 10- 4-2003 wh .....

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ource of investment was not explained by the assessee, while the fact is that source of investment is speculation gain of ₹ 1,00,044/- from sale and purchase of shares of Mastek Limited and Wipro Limited and the said speculation profit is already offered for taxation by the assessee. The learned CIT(A) deleted the addition on ground of transaction connected with purchase and sale of shares of Mastek Limited and Wipro Limited as was made by the AO. 8. The ld. D.R. relied on the orders of th .....

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ion between the rival parties. However, as per the Revenue the assessee has not produced any relevant evidence with respect to source of making investment of ₹ 1,00,518/- in the acquisition of shares of Buniyad Chemicals and Talent Infoways Ltd. while it is the contention of the assessee that the speculation gain of ₹ 1,00,044/- earned on sale and purchase of shares of Mastek Limited and Wipro Limited was invested in making investment in shares of Buniyad Chemicals Limited and Talent .....

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