TMI Blog2016 (8) TMI 1201X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso to Section 147 makes it mandatory, thus reopening the assessment after four years from the end of the relevant assessment year, without pointing out the failure on the part of assessee is bad in law The sale of shares was evident not only by the Bank’s statement but also by debit to Demat account maintained by M/s. Karvy Share Broking Pvt. Ltd. Sale proceeds are received in normal course through Banking channel. So, the receipt of money from the broker consequent to the sale cannot be held to be ‘unexplained’. There is no allegation that assessee has paid the consideration in cash and received in cheque in that mode. In the absence of any evidence to the contrary, the sale proceeds cannot be taken as ‘unexplained credits’. With ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment u/s. 143(3) of the Income Tax Act [Act] was completed on an income of ₹ 9,49,400/- on 05-07-2007 making certain additions. Thereafter, consequent to search and seizure operations in M/s. Mahasagar Group of cases in Mumbai, the DCIT, Central Circle-46, Mumbai has intimated the AO that sworn statements were recorded from Shri Mukesh Choksi which reveals that the group companies are used for laundering the black money by providing bogus share trading entries. Since, assessee has certain transactions and offered Long Term Capital Gain, it was informed that the genuineness of transactions require verification. Consequently, the AO recorded satisfaction that income has escaped assessment and issued a notice u/s. 148 on 25-03-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record; f. Sale of shares, receipt of sale proceeds through Cheques and confirmation through banks were on record. On the basis of evidence, it was contended that trading through off-market transaction was not uncommon and entire details were examined by AO, when he was examining the sources of investment in a company in the original scrutiny proceedings. It was contended that the AO s action in treating the sale proceeds as bogus/sham is not correct on the facts of the case. 4. Ld. CIT(A) however, did not agree with the contentions. On the reopening, Ld. CIT(A) was of the opinion that there is information which led to recording of satisfaction and so she upheld the reopening of assessment. On merits also, she concurred with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Pvt. Ltd., on 29-11-2005. The account copy also indicates a debit of 21,500 shares on 07-12- 2005 and closing balance was NIL. The sale of shares happened on 05-12-2005 through Goldstar Finvest Pvt. Ltd., and monies were received in Indus Ind Bank account by way of transfer-credit on 15-12-2005. All these transactions were verified in the first scrutiny assessment and were accepted. 7.1. With reference to the statement recorded from Shri Mukesh Choksi, except the inter office communication, nothing was brought on record by Revenue. The so called statement itself was not on record. No cross-examination was furnished to assessee. Moreover, the statement seems to have been recorded on 16-01-2013 as reproduced in the assessment order which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons cannot be accepted as genuine. Moreover, there are series of actions on Shri Mukesh Choksi and at the relevant point of time, there were statements from him which does not implicate the transaction of assessee. How they can become bogus at the later point of time on the basis of statement recorded in 2013 is also not explained. Considering the fact that AO who conducted survey operation on assessee, much prior to filing of return, did not find any transaction of bogus nature and the fact that the Long Term Capital Gain was accepted do indicate that the transactions are genuine and cannot be held to be sham on the basis of so called statement of Mr Mukesh Choksi on 16-01-2013. The genuineness of statement itself cannot be accepted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts on record, I am of the opinion that the action of AO in treating the sale proceeds received through banking channels cannot be treated as unexplained money u/s. 69A. Therefore, the addition of the amount stands deleted. 7.5. Even though the basis for arriving at the satisfaction for reopening is questionable, however, the communication from DCIT, Mumbai can be considered as basis for recording a satisfaction to reopen the assessment. Sufficiency of the information cannot be questioned but there is some basis for coming to a conclusion that transaction requires examination. But the details are available on record. Moreover, the reopening is after four years from the end of the relevant assessment year as a scrutiny u/s. 143(3) was c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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