TaxTMI 
TaxTMI 
2011 (3) TMI 1653
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.... issue for reopening at that point of time was that assessee has claimed certain short term capital gains on sale of shares which were considered bogus consequent to the search in the case of the broker who has dealt with certain penny stocks in on-market and offmarket transactions. The claim of short term capital gains and loss were disallowed by the A.O. The matter was contested before the CIT(A) wherein the CIT(A) vide his order dated 26.06.2007 allowed assessee's appeal on additions/ disallowances made. However, in the meantime on 28.06.2006 a search and seizure operation was conducted in the group cases of the assessee who are alleged to be booking profits by making claims of bogus long term capital gains and purchase and sale of shares of penny stock companies. During the search it came to light that 1,00,000 shares of M/s. Bolton Properties Ltd. purchased by Shri Rajkumar M. Shorewala Group was not sold and that the shares still existed in the respective Demat accounts of the group members including the assessee. Since the shares were not transferred the question of booking profit on account of long term capital gains did not arise. However, consequent to the search notices ....
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....uld further indicate that the appellant was not among the entry seekers. This also brings to light the inconsistency in the statement of Mr. Mukesh Choksi. As may be noted, despite the appellant not making payment to the entities mentioned by Mr. Mukesh Choksi, the appellant's transactions are termed as bogus by him. Accordingly, Mr. Mukesh Choksi's statement is found to be not borne out by facts in so far as the appellant's transactions in question are concerned. This coupled with the frequent vacillating changes in his statements would indicate that Mr. Mukesh Choksi's statement before the Assessing Officer is not reliable because the same Mr. Mukesh Choksi had initially stated that the transactions were bogus and had then again retracted during the original assessment proceedings to hold that the transactions were genuine. In this respect, I find appellant's reliance on the decision of the Hon'ble Calcutta High Court in the case of ICT Vs. Eastern Commercial Enterprises as apt and appropriate. As I note, in this decision the Hon'ble Calcutta High Court has observed, "A man indulging in double speaking cannot be said by any means a truthful man at any stage and no court....
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....nnot challenge the correctness of the statement made by the Deponent in the affidavit. Therefore, it was his submission that the CIT(A) wrongly disallowed the additions so made. 5. In reply the learned A.R. submitted that the CIT(A) when passing order under section 143(3) r.w.s. 147 has deleted the additions on merits and he has not relied upon the statement of Mr. Choksy who affirmed at that time by way of an affidavit that the transactions were genuine. It was his submission that the issues were already considered and decided in the reopened proceedings under section 147 and at the time of search on 28.06.2006 the orders before the CIT(A) were pending who passed the orders only on 26.06.2007. For the entire one year, the Revenue did not submit any of the findings of the search before the CIT(A) and the CIT(A) deleted the additions on its merits. Even during the search nothing incriminating was found by the search party and the issue for conducting the search was supposed to be bogus/ hawala capital gains in the sale of Bolton Properties shares which were found to be not transacted and available in the demat accounts of the respective parties and so the issue of long term capital....
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....of search in relation to such points. He also submitted the orders of the ITAT in group concerns where the Revenue has contested the original orders which were confirmed by the hon'ble High Court of judicature at Bombay in the case of CIT vs. Sandeep Shorewala HUF, which in turn was also affirmed by the Supreme Court dismissing the Special Leave Petition after admitting it in CIT vs. Sandeep Shorewala CO No. 18429 of 2010 dated 10.12.2010,. 6. We have considered the issue. As examined from the orders of the A.O. passed originally under section 143(3) r.w.s. 147 dated 29.03.2006 the issues considered in that order were the same which are considered in the orders under section 143(3) r.w.s. 153A. It is also on record that there is no incriminating material found and seized in the search regarding these aspects on 28.06.2006. At that point of time the appeals before the CIT(A) were pending and the Revenue has not made out any effort to support the issues before the CIT(A). The CIT(A)'s order dated 28.06.2007 giving relief to the assessee on the disallowances made/additions made in original orders has not been contested in appeal. Thus those orders became final. In view of the Coo....