AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (10) TMI 1514
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....cts and circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the addition made u/s 68 of Income Tax Act,1961 as unexplained credits without appreciating the facts of the case. 3. On the facts and circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the disallowance of set off of business loss by applying explanation to section 73 (4) of Income Tax Act,1961 without appreciating the facts of the case. 4. The appellant craves leave to alter, amend, modify or substitute any ground / grounds and to add any new ground or grounds on or before the appeal is disposed off." In addition to the above grounds of appeal, the assessee has also taken the additional legal grounds, which read as under: a. "Whether on the facts and under the circumstances of the case the order of assessment as affirmed by the CIT(A) is not void ab initio as the same has been passed under section 147 instead of section 153C? b. Whe ther o n t he f a c t s a nd c i r cums ta nc e s of the c ase th e Assessment framed and confirmed by the CIT (A) is not barred by limitation, in view of the non obstantive prov....
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.... genuine transactions only. The assessee before the Ld. CIT(A) also submitted the confirmation of Sh. Mukesh Chokshi about the share transactions done through his share broking company. The Ld. CIT(A) referred the matter to the AO for his remand report on the said evidence. The AO in the remand proceedings, however, insisted the assessee to produce said Mr. Chokshi for examination as a witness before him. The assessee submitted that it had requested Mr. Chokshi to appear before the AO, but he could not force his attendance before the AO. The AO therefore reported that the assessee had not complied with the directions to produce Mr. Chokshi before him, therefore the matter be decided on merits. The Ld. CIT(A) held that since the assessee had failed to produce Mr. Chokshi before the AO, hence no reliance could be placed on the confirmation relating to the share transactions given by Mr. Chokshi. He therefore held that the transactions were not genuine and confirmed the additions made by the AO. The assessee is thus in appeal before us. 5. We have heard the rival contentions and have also gone through the record. The Ld. AR has vehemently contested the reopening of the assessment pro....
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....d. AR has further vehemently contended that even the limitation for reopening of assessment under section 147 had expired on the date the AO had sought to reopen the assessment for the year under consideration. The Ld. D.R. on the other hand, has contended that the assessment in this case has rightly been reopened under section 147 of the Act. 6. We have considered the rival contentions and have also gone through the records. So far as the first contention of the Ld. A.R. that the reopening in this case could have been done under section 153C only but not under section 147 of the Act is concerned, we find that during the course of search in the case of M/s. Mahasagar Securities Pvt. Ltd. and its group companies, the documents found in their premises belonged to the searched companies and not to the assessee. The assessee's name figured in the list of persons to whom the said searched person had allegedly provided accommodation entries. Under such circumstances, it can be safely said that the incriminating documents belonged to the searched person but somehow related to the assessee as the name of the assessee had figured in the list of persons. The Hon'ble Gujarat High Court in th....
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....in hand belonged to the searched person. Under such circumstances, in view of the proposition of law laid down by the Hon'ble Gujarat High Court (supra) and by the Hon'ble Delhi High Court (supra) which has been further followed by various benches of the Tribunal, the reopening in the case in hand has rightly been done under section 147 of the Act by the AO. In our humble view, the case laws relied upon by the assessee are distinguishable in the light of the decisions of the Hon'ble Gujarat High Court (supra) and that of the Hon'ble Delhi High Court (supra) So far as the next contention of the Ld. A.R. that in the reasons recorded, the AO had mentioned that he had believed that the assessee had claimed bogus losses whereas in the assessment proceedings, the AO had assessed profits from the sale of shares as unexplained cash credits and therefore the AO has not made the addition on the basis of reasons recorded is concerned, we find that the said contention of the Ld. A.R. also cannot be accepted. The reopening in this case has been done on the basis of loose papers containing the names of persons in which the name of the assessee was also mentioned to whom the said searched compan....
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....was justified in reopening the assessment under section 147 of the Act. The relevant findings of the Tribunal relating to the issue of reopening in the case of "Smt. Jyoti D. Shah" (supra) for the sake of convenience are reproduced as under: "3. Rival contentions have been heard and record perused. There was a search undertaken in the case of M/s Mahasagar Securities P.Ltd. and its group companies including M/s.Gold Star Finvest P.Ltd. on 25.11.2009. A statement of Shri Mukesh Chokshi, Director of M/ s. Mahasagar Securities P.Ltd. was recorded during the search wherein Mukesh Chokshi had explained in detail the modus of operation of the accommodation entries racket being run by him by floating some 34 companies and admitted to be in business of providing the bogus accommodation entries. Further enquiries by the Investigation Wing also confirmed that many of the subbroking companies floated by Shri Mukesh Chokshi actually did not carry out the transactions through the main' brokers for whom they were claiming to be subbrokers and all the bills raised by them were illegal, unauthorized and against the provisions of the SCRA Act, 1956. On the basis of the details obtained during ....
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....g as under: "6.1 We have considered the rival submissions made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. From the copy of the share certificate, Demat account, share transfer form filed in the Paper Book, we find the assessee has purchased 9500 shares of Kushal Software Ltd. from M/s. Handful Investors Pvt. Ltd. We find the Assessing Officer treated the sale of such shares by the assessee through M/s. Gold Star Finvest Pvt. Ltd. as bogus on the ground that Mr. Choksi and his broking company were engaged in giving false share transaction bills. However, from the copy of the statement of Mr. Choksi, a copy of which is filed in the Paper Book, we find Mr. Choksi has not specifically mentioned the name of the assessee for obtaining benefit on sale of such bogus shares. The learned DR also could not point out from the statement of Shri Choksi that he has taken the name of the assessee for obtaining any benefit on issue of such bogus bills. Considering the totality of the facts of the case and considering the fact that the assessee had purchased the shares which were duly transferred to the Demat acc....
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....companies as to whether the shares have been transferred and the names of the shareholders in whose names shares have been transferred. The decision of the Tribunal in the case of Rajinidevi A. Chowdhary has also been upheld by the jurisdictional High Court as taken note of by this Tribunal in the case of Shri Pinakin L. Shah [cited supra], to which one of us i .e. the Judicial Member , is a par ty. In these facts and circumstances of the case, we do not see any reason to interfere with the order of the CIT[A] and the same is upheld. 14 In the result, revenue's appeal is dismissed." 12. In the case of the assessee before us, the AO has not pointed out about any direct or material evidence against the assessee to hold that the share transactions were not genuine. The assessee had furnished before the AO all the necessary details and evidences relating to the share transactions in question. The AO did not raise any query or doubt about the genuineness of the details and evidences submitted by the Assessee. The AO has made additions on the basis of general statement of Mr. Chokshi made before the investigation wing. The name of the assessee did not appear specifically in any of ....