TMI Blog2017 (11) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... ya, A. M.: This Appeal by the assessee is directed against the Order of the Commissioner of Income Tax (Appeals)-30, Mumbai ( CIT(A) for short) dated 16.02.2015 and pertains to the assessment year (A.Y.) 2006-07. 2. The grounds of appeal read as under: 1. The Learned CIT (A), has erred in confirming the re-opening the Assessment U/s. 147 of the I T Act, 1961 by the Assistant Commissioner of Income Tax: a. On the basis of vague and uncertain information that, the appellant had taken accommodation entries from M/s. Mahasagar Securities Group, without sufficient and relevant material on records to prove the basis of such opinion by Ld. CIT (A). b. Your appellant pleads that the assessment made in gross violation of the provisions of the Act be quashed and that the returned total income of ₹ 25,82,669/- be accepted and the addition made to such returned income of ₹ 5,57,609/- be deleted and the total income be assessed at ₹ 25,82,669/- 2. The learned CIT (A) has erred in confirming the rejection made by the Asst. Commissioner of Income Tax against the OBJECTION raised by the appellant vide her letter dated 18.11.2013 to the Reopening proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / long term capital gain / loss. On the basis of documents seized during search at the premises of these hawala concerns, it was revealed that the assessee's name existed in the list of dubious deals. Taking into account all the facts submitted by the assessee, the Assessing Officer observed that the assessee was one of the beneficiaries in the fraudulent share transactions carried out by Mukesh Chokshi, M/s. Alliance Intermediaries Network Pvt. Ltd. etc., which were mere accommodation. Accordingly, ₹ 5,46,675/- was treated as unexplained expenditure u/s. 69C of the head 'Income from Other Sources' and added to the total income, commission payable on such accommodation entries which must have been paid in cash @ 2% of ₹ 5,46,675/- came to ₹ 10,934/- was also added to the total income. Short term capital gain of ₹ 19,47,429/- was also treated as Income from Other Sources . 5. Against the above order, the assessee appealed before the ld. CIT(A), challenging both the reopening as well as the merits of the case. By a very elaborate order, the ld. CIT(A) upheld the reopening. Despite raising the issue of reopening in the grounds of appeal, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold, total sale consideration, bills of brokers etc. and the sale price was received by account payee cheque which was credited to the appellant's bank account. Thus, according to him, sate and purchase of shares were conclusively proved and same could not be wished away by the revenue by indulging in surmises and conjectures. 2.4.20 The general rule is that 'burden of proof is always on the authority, who asserts a proposition or fact, which is not self-evident. The burden of proof has two shades of meaning. In the primary sense, it means, the burden of establishing the case. The second meaning of 'burden of proof is on the principle of evidence. In the second sense, the burden would be shifted from one party to the other, as and when adequate evidence to discharge the burden, that lay on a party, is produced, by that party. 2.4.21 The onus to prove that apparent, is not the real one, is on the party who claims it to be so, as held by the Hon'ble Supreme Court in the case of CIT v. Daulat Ram Rawatmull [1973] 87 ITR 349 and CIT v. Durga Prasad More [1971] 82 ITR 540. In the case of Durga Prasad More (supra), it has been held by the Apex Court that though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence Act was not applicable; but that did not mean that when the taxing authorities were desirous of invoking the principles of Evidence Act, in proceedings before them, they were prevented from doing so. It was further held by the Hon'ble Apex Court that all that Section 110 of the Evidence Act, 1872 did, was to embody a salutary principle of common law, jurisprudence viz, where a person was found in possession of anything, the onus of proving that he was not its owner, was on that person. Thus, this principle could be attracted to a set of circumstances that satisfies its conditions and was applicable to taxing proceedings. 2.4.24 As regards the issue of cross-examination, in T, Devasahaya Nadarv. C/7[1964]51 ITR 20 (Mad.), it was held: It cannot be laid down as a general proposition of law that the Incometax Department cannot rely upon any evidence which has not been subjected to cross-examination. An ITO occupies the position of a quasi-judicial Tribunal and is not bound by the rules of the Evidence Act, but he must act in consonance with natural justice, and one such rule is that he should not use any material against an assessee without giving the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ually demand that the guilty should be punished and that technicalities and irregularities which do not occasion failure of justice are not allowed to defeat the ends of justice. Principles of natural justice are but the means to achieve the end of justice. They cannot be perverted to achieve from opposite end. 2.4.28 In view of the above, I am of the considered opinion that the appellant had routed her unaccounted income in the guise of purchase and sale of shares. Having considered the gamut of facts brought before me, as also the statement of Mukesh Choksi recorded on oath on 11.12.2009 where he clearly admitted that both the sale and purchase bills issued by him were for bogus transactions, added with the fact that in the appellate proceedings for A.Y.2002-03 before the Hon'ble ITAT, Mu'mbai, M/s. Goldstar Finvest Pvt. Ltd., one of the hawala concerns of Mukesh Chokshi had admitted that it was an entry provider and the same was accepted by the Hon'ble Tribunal in ITA No.4625/Mum/2005 5000/Mum/2005 in its order dated 28.03.2008, I have no hesitation in holding that the appellant had engaged in bogus transactions to convert her undisclosed income into capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon his whims or caprice. He has to act justly and fairly. The power has to be exercised objectively and dispassionately and thereafter conclusions have to be drawn on the basis of material on record in accordance law. However, perusal of the impugned orders of the Commissioner would go to reveal that he had based his conclusions purely on conjectures and surmises and not on an appreciation of material on record in the right perspective. 2.4.32 Hon'ble Bombay High Court also had an occasion t: - of assessment based on conjectures and surmises in the case of C; Income-tax-21, Mumbai v. Uttamchand Jain [2009] 182 TAXMAN 243 (BOM) where it was held as under: There is nothing on record to suggest that the assessee had give-cash to Mr. Sanjay Saxena. The Assessing Officer has not chosen to examine Mr. Sanjay Saxena to establish that cash was given by the assessee to Mr. Trivedi through Mr. Sanjay Saxena. Perusal of the reassessment order shows that the Assessing Officer has not made any efforts to link the cash received and deposited by Mr. Trivedi in his bank account was in fact paid by the assessee. In other words, the decision of the Assessing Officer in discard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mental Representative submitted that the issue in this case relates to accommodation entry obtained from Shri Mukesh Choksi. He submitted that the authorities below have passed a very reasonable order. Furthermore, he placed reliance upon the decision of this ITAT in the case of Disha N. Lalwani vs. ITO in ITA No. 6398/Mum/2012 for assessment year 2003-04 in this case vide order dated 22.03.2017. The reopening as well as the addition in the similar case of an accommodation entry through Shri Mukesh Choksi was upheld. The ld. Departmental Representative further submitted that the assessee has clearly engaged into money laundering activity. As such, he pleaded that the assessee should be held accountable for the money laundering activity she has engaged into. 9. Upon careful consideration I note that the Assessing Officer received information that M/s. Mahasagar Securities Group and its group companies floated by Shri Mukesh Choksi were engaged in fraudulent billing entries and providing bogus accommodation profit/loss and short/long term capital gain/loss. On the basis of the documents seized during search at the premises of this hawala concerns, it was revealed that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances as well. Hence, I find that the addition in this case is properly justified. I further note that this tribunal in the case of Disha N. Lalwani (supra), had upheld similar addition by elaborately discussing the issue and has concluded as under: In the aforesaid order an elaborate discussion has been made by Hon ble Delhi High Court. Likewise, the Indore Bench of the Tribunal in the case of Agarwal Coal Corporation has considered various decisions and finally decided in favour of the Revenue. if the facts of the present appeal are analyzed on the touch scale of aforesaid decisions, one fact is clearly oozing out that merely a paper work was camouflaged by the assessee with the help of Shri Mukesh Chokshi and its associates firms. It is also undisputed facts that the statement tendered by Shri Mukesh Choksi was neither contradicted nor proved to false, therefore, we find no infirmity in the conclusion of the ld. Commissioner of Income Tax (Appeal), thus, on merit also, the order of the ld. Commissioner of Income Tax (Appeal) is affirmed. 11. In the background discussion and precedent, I do not find any infirmity in the order of ld. CIT(A) and accordingly I uph ..... X X X X Extracts X X X X X X X X Extracts X X X X
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