AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (2) TMI 463
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....facts of ITA No.810/Ahd/2015 for AY 2006-07 in the case of Shri Pratik Suryakant Shah. 3. The common grievance in all these appeals relates to the treatment of Long Term Capital Gains as undisclosed income of the assessee, denying the exemptions of Long Term Capital Gains on sale of shares. 4. Briefly stated facts of the case are that the returns of income of the assessees were accepted u/s 143(1) of the Act. Subsequently, the Assessing Officer received information relating to a search and seizure action carried out in the case of M/s. Mahasagar Securities Pvt Ltd, including group companies which were controlled by one Shri Mukesh M. Choksi at Mumbai. In his statement, Shri Mukesh Choksi admitted that all his groupcompanies were providing entries for taking profit or loss by showing purchase or sales of the shares and securities to various parties across India, on which he charged certain commission from the beneficiary parties. Since the impugned appellants were the beneficiaries of such accommodation entries provided by Shri Mukesh Choksi, the assessments were reopened. Statutory notices were issued and served upon the assessees and the reasons for the reopening of the assessme....
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....rongly contended that no adverse view should be taken merely on the strength of the statement of a third party whose statement has not been confronted to the assessee, nor any opportunity is given to cross-examine. 7. The detailed submissions of the assessee did not find any favour with the Assessing Officer. The Assessing Officer also dismissed the request of the assessee for providing an opportunity of cross-examination. The relevant findings of the Assessing Officer read as under:- "vi) Regarding assessee's opinion/request to give an opportunity of crossexamination both of material found from the third party, i.e. his book, etc. as well as cross-examination of the person who has deposed against her and without compliance of the same, it would not be correct or maintainable to draw any adverse inference as observed in the show cause notice, it has no weight for the following reasons: ~ a) It is confirmed by the NSE/ISE that no trades have been executed in the names of the persons who have traded through the group companies of M/s.Mahasagar Securities Pvt. Ltd. controlled by Shri Mukesh R. Chokshi. b) Since, M/s. Alliance Intermediateries & Network Pvt. Ltd. is no more ....
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....the say of the Counsel that denial of natural justice cannot be considered in framing the assessment order. The Counsel for the assessee continued by stating that the shares were purchased through brokers and the same were also sold through brokers. If the brokers turned out to be scamster, the assessee cannot be held responsible for the same. 12. Per contra, the DR strongly supported the findings of the Revenue Authorities. It is the say of the DR that the assessment is not merely based upon the statement of Shri Mukesh Choksi, but also on the fact that the entire transactions of the assessee were bogus. 13. Having heard the rival contentions, we have carefully perused the orders of the authorities below. As mentioned elsewhere, we have considered the facts in ITA No.810/Ahd/2015. We find that the assessee had purchased 3000 shares of Telant Info Ltd from M/s. Mahasagar Securities Pvt Ltd on April 2004. The consideration was paid and the payment of consideration is not in dispute. The shares of Telant Info Ltd were listed in the Bombay Stock Exchange at that point of time. The shares so purchased were sold through M/s. Alliance Intermediateries & Network Pvt Ltd and the consider....
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....cating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine....