2016 (4) TMI 702

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....9C. reasons assigned by him for doing the same are wrong and insufficient. Provisions of the Act ought to have been properly constructed before disallowing the same. Regards being had to the fact and circumstances of the case, the said disallowance ought not to have been made. 3. The leaned CIT (Appeals) has erred in confirming the interest u/s. 234A at Rs. 1,759/- u/s. 234B at Rs. 1,66,241/- and u/s. 234C at Rs. 545/- . Reasons assigned by him for doing the same are wrong and insufficient. Provision of the Act ought to have been properly constructed before disallowing the same. Regards being had to the fact and circumstances of the case, the said interest ought not to have been charged. 2. The issue raised in the first grounds of appeal is against the confirmation an addition of Rs. 5,50,520/- by the CIT(A) which was made by the AO for the reason that the said income was accruing from the transaction with M/s. Gold Star Finance Pvt. Ltd. company belonging to Mukesh Choksi. The brief facts of the case are that the assessee filed his return of income on 06/10/2003 declaring the income of Rs. 1,13,824/-. During the year the assessee sold the 8,200 Equity shares of M/s. Bu....

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....lack money. 2.3. The FAA also confirmed the addition made by the AO for the reasons that the assessee failed to prove the sale and purchase of shares which was done off market through Goldstar Finvest Pvt Ltd which was engaged in hawala scam and thus doubted the entire process of purchase and the sale was also different from routine one as it was made just four days before the physical shares were de-materialized. The CIT(A) held that this was web of deception as Mr Mukesh Chokshi himself admitted during search that he was involved in issuing bogus bills of shares purchase and sales of listed companies on the prices these scrips were traded in the exchanges and the mere fact that the sales proceeds were routed through banking channel did not itself prove the transactions in this background 2.4. The ld AR vehemently submitted before us that the case of the assessee was covered by the decisions of the tribunal Mumbai benches namely (i) ITO Vs Smr Amina I. Rangari ITA No 7543/Mum/2011 AY 2003-04, dated 04.09.2015 (ii)M/S R.C. Enterprises Vs ITO ITA No. 3861/Mum/2012 AY 2003-04 dated 08.04.201, (iii) Masuma S Tankiwala Vs ITO ITA No1867/Mum/2014 AY 2004-05 dated 27.11.2014 in whi....

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.... in to by her.Considering the above facts, we are of the opinion that the FAA was justified in reversing the order of the AO.The information received by the AO was a good starting point for further investigation but was not a reliable evidence to make addition u/s.68 of the Act.The assessee had discharged the burden of proving the genuineness of transactions and therefore confirming the order of the FAA,we decide effective ground of appeal against the AO.Cases relied upon by the AR also support the view taken by the FAA" (ii)M/S R.C. Enterprises Vs ITO ITA No. 3861/Mum/2012 AY 2003-04 dated 08.04.201 para 11 is reproduced as under:- "11. The foregoing discussions would show that the tax authorities have proceeded to assess the amount of Rs. 1.00 crores on suspicion, conjectures and surmises. Further they have not disproved the various documents furnished by the assessee in support of purchase and sale of shares by conducting specific enquiries with the brokers who had purchased and sold the shares on behalf of the assessee. The strong fact relating to the dematerialization of shares was not disproved by the tax authorities. The fact of purchase of shares was disclosed b....

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.... that the assessee has discharged his onus by filing complete details ie. purchase of shares, share certificate, Demat account, confirmation from Buniyad Chemicals Limited of whose shares were purchased. Consideration was paid through account payee cheque, therefore, there is no material against the assessee from which it can be said that the transaction entered by the assessee was not genuine. It is further noticed that in case of Kataria Ketan Ishwarlal (supra), the additions were made on the basis of statement of Shri Mukesh Chokshi. The Tribunal by noting that Mr. Chokshi has issued a general statement and it cannot be applied in each and every case, there was no direct evidence against that assessee. Accordingly, the amount of addition made in that case was deleted by the Tribunal Here facts are similar. Neither the statement of Mukesh Chokshi was provided to the assessee nor there was any cross examination of Mukesh Chokshi, whereas contrary to that the assessee has filed all the details required for providing for purchase of shares were genuine. It is not a case of the department, whatever the consideration was paid by the assessee through cheque for purchasing of shares hav....