TMI Blog2017 (3) TMI 970X X X X Extracts X X X X X X X X Extracts X X X X ..... A)-2/ITO,S.K.Wd- 2/HMT/182/13-14 arising out of order u/s 143(3) r.w.s. 147 of the Income-tax Act, 1961 (in short the Act) framed on 3/2/2014 by ITO, S.K.Wd-2, Himatnagar, raising following grounds :- 1. The learned C.I.T.(A) has erred in law and on facts in holding that the reopening of the assessment was justified thereby dismissing the ground against the reassessment proceedings u/s. 147 of the Act. 2. The learned C.I.T.(A) has further erred in law and on facts in confirming the addition of ₹ 4,50,778/- holding that the said amount should be treated as income from other sources and should not be added u/s. 68 of the Act. 3. On the facts and in the circumstances of the case and in law the learned C.I.T.(A) ought to have quashed the reassessment proceedings and in consequence ought to have annulled the assessment, and ought to have deleted the addition of ₹ 4,50,778/-. 4. It is therefore prayed that the proceedings initiated u/s. 147 of the Act may be quashed, the assessment made in pursuance thereof may be annulled and the addition of ₹ 4,50,778/- may be deleted. 5. Your appellant craves leave to add, alter or amend any ground of appeal at the tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tent Infoway from Mahasagar Securities Pvt. Ltd. and Alliance Intermediateris Network Pvt Ltd. respectively is found to be sham and bogus one. You are therefore, required to show cause as to why the sale consideration of Rs 450,778/- received by you should not he treated as unexplained credit u/s. 68 of the Act and the same shou/d no! be added to your total income In reply to the above show cause notice assessee s main contention was that he had not entered into any transaction with Mahasagar Securities (P) Ltd/ Alliance Intermeciiateris Network Pvt. Ltd. and he also does not know Mukesh M. Choksi. Assessee also submitted that the shares of Jai Corporation were sold by him through Shilpa Stock Broker (P) Ltd. and attached demat account and bank statement supporting the sale of shares. 3. However, ld. Assessing Officer was not convinced with rhe reply and he was of the view that assessee has sold 240 shares of Jai Corporation through Alliance Intermediateries Network Pvt. Ltd. and also observed that the impugned transactions of purchase/sale of shares are not be reflected in the demat account of the assessee. Accordingly after making addition u/s 68 of the Act towards u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant received the share in physical form in his DEMAT account on 15/05/2007 and sold on 18/05/2007. The entries in the DEMAT account show that the shares have been purchased from IL FS Securities Services Ltd. and sold through Shilpa Stock Brokers. The transactions are clearly non - genuine. The contract note which has purportedly been issued from the National Stock Exchange is obviously a bogus document. There is no possibility that after purchase of shares in the month of April, 2006, the share would be transferred in May 2007, if that transaction has been entered on the floor of the stock exchange was genuine. The reason of date of transfer of equity shares in the demat account of the appellant in the month of May 2007 is self eqplanatory, as it is in this financial year. The appellant has received accommodation entries of capital gain. The appellant must have decided to purchase a capital gain by obtaining accommodation entries and only at that time the group of Mr. Mukesh Choksi have created these entries. It is, therefore, clear from facts that the transactions are bogus. The claim of the appellant, that it was not given the copy of the statement of Shri Muk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e transactions giving rise to long term capital gains from sale of shares. Ld. Authorised Representative also submitted that assessee was not provided any opportunity to cross examine the statement of third party on the basis of which reassessment proceedings were initiated and addition u/s 68 of the Act for unexplained cash credit was made by the Assessing Officer . Ld. Authorised Representative relied on the decision of the Co-ordinate Bench dated 21.10.2016 in the case of Shri Pratik Suryakant Shah others in ITA No.810/Ahd/2015 for Asst. Year 2006-07 ors. 6. On the other hand, ld. Departmental Representative supported the orders of lower authorities and also relied on the decision of the Co-ordinate Bench, Ahmedabad in the case of Sudhir Balraj Jumani HUF vs.ITO, Wd-7(3), Ahmedabad in ITA No.1570/Ahd/2012 for Asst. Year 2003-04. 7. We have heard the rival contentions and perused the record placed before us. Grounds of appeal raised by assessee are raising two issues, firstly challenging the reassessment proceedings u/s 147 of the Act and secondly treating the long term capital gain from sale of shares as income from other sources as held by ld. Commissioner of Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d/2015. We find that the assessee had purchased 3000 shares of Telant Info Ltd from M/s. Mahasagar Securities Pvt Ltd on April 2004. The consideration was paid and the payment of consideration is not in dispute. The shares of Telant Info Ltd were listed in the Bombay Stock Exchange at that point of time. The shares so purchased were sold through M/s. Alliance Intermediateries Network Pvt Ltd and the consideration was received by cheque. It would be pertinent to mention here that though the shares were purchased in physical form, the same were sent to the company with share application form and the shares were transferred by the company in the name of the purchaser. Thereafter, the shares were transferred in the demat account, from where they were sold. It is not the case of the Revenue that the consideration paid by the assessee at the time of purchase of shares was received back in cash, nor it is the case of the Revenue that the sale consideration received by the assessee was returned back in cash. It is also not the case of the Revenue that the shares in question are still lying with the assessee, nor it is the case of the Revenue that the amounts received by the assessee on s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to crossexamine those dealers and what extraction the appellant wanted from them. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17.03.2005 was passed remitting the case back to the Tribunal with the directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. In view the above, we are of the opinion that if the testimony of thes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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