Tribunal Upholds Addition of Sale Proceeds as Accommodation Entry, Dismisses Appeals

The Tribunal confirmed the CIT(A)'s decision to uphold the addition of full value of sale proceeds, including long term capital gain, as accommodation entry based on the statement of Mukesh M Chokshi. The appeals by the assessee were dismissed as the entities involved were found to be engaged in providing accommodation entries and not genuine business transactions, with the appellant failing to prove the credit worthiness of the creditor. The Tribunal found no evidence to challenge the lower authorities' conclusions, leading to the dismissal of the appeals on 14/11/2019.

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Issues:
Appeal against order of CIT(A)-2, Mumbai for A.Y.2006-07, 2007-08 & 2008-09 under section 143(3) r.w.s. 147 of the Income Tax Act, 1961.

Analysis:
1. Issue of Accommodation Entries and Long Term Capital Gains:
The appeals were filed by the assessee against the addition of full value of sale proceeds, including long term capital gain, as accommodation entry based on the statement of Mukesh M Chokshi. The assessment for the relevant years was reopened due to information indicating that the assessee had obtained accommodation entries and showed long term capital gains from the sale of shares. The AO found that the assessee entered into bogus transactions through which payments were made, leading to the escape of assessment. The AO made additions regarding the alleged accommodation entries received by the assessee. The CIT(A) confirmed the AO's action based on various judgments indicating that the entities involved were engaged in providing accommodation entries and not genuine business transactions. The CIT(A) observed that the appellant had taken an accommodation bill, and the credit worthiness of the creditor was not proved. The addition made by the AO was sustained, and the appeal was dismissed.

2. Judicial Pronouncements and Findings:
The CIT(A) referred to judgments of the Hon'ble ITAT regarding Mukesh Choksi and his business entities, highlighting that they were involved in providing accommodation entries and not genuine business activities. The CIT(A) noted that the credit worthiness of the entities was not established, and the appellant had obtained accommodation entries without proving the creditor's credit worthiness. The CIT(A) upheld the addition made by the AO based on the findings of the ITAT and concluded that the appellant's actions fell within the realm of unaccounted income. The detailed findings of the lower authorities were considered, and the appeal was dismissed as no evidence was presented to challenge the lower authorities' conclusions.

3. Confirmation of CIT(A)'s Action:
The Tribunal confirmed the CIT(A)'s decision, stating that the facts and circumstances across all relevant years were similar. The Tribunal upheld the CIT(A)'s reasoning and confirmed the dismissal of all appeals by the assessee. The order was pronounced in open court on 14/11/2019, and the appeals were ultimately dismissed.

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