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2017 (3) TMI 970

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....3. On the facts and in the circumstances of the case and in law the learned C.I.T.(A) ought to have quashed the reassessment proceedings and in consequence ought to have annulled the assessment, and ought to have deleted the addition of Rs. 4,50,778/-. 4. It is therefore prayed that the proceedings initiated u/s. 147 of the Act may be quashed, the assessment made in pursuance thereof may be annulled and the addition of Rs. 4,50,778/- may be deleted. 5. Your appellant craves leave to add, alter or amend any ground of appeal at the time of hearing. 2. Briefly stated facts are that assessee being an individual filed his return of income on 5.1.2009 declaring total income of Rs. 1,55,658/- earned from salary, long term capital and other sources. Case was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 28.03.2013. Notice for reopening of assessment was issued on the basis of information received from Investigation Department on account of search conducted in the case of Mahasagar Securities Pvt. Ltd. and Alliance Intermedataries Network Pvt. Ltd. which were commonly controlled by Mukesh M. Choksi. In response to the notice issued, assessee filed necessary details ....

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....lpa Stock Broker (P) Ltd. and attached demat account and bank statement supporting the sale of shares. 3. However, ld. Assessing Officer was not convinced with rhe reply and he was of the view that assessee has sold 240 shares of Jai Corporation through Alliance Intermediateries Network Pvt. Ltd. and also observed that the impugned transactions of purchase/sale of shares are not be reflected in the demat account of the assessee. Accordingly after making addition u/s 68 of the Act towards unexplained cash credit of Rs. 4,50,529/- income was assessed at Rs. 6,06,460/-. 4. Aggrieved, assessee went in appeal before ld. Commissioner of Income Tax(A) but assessee could not succeed as ld. Commissioner of Income Tax(A) confirmed the addition by making a slight modification by treating the impugned income of Rs. 4,20,529/- as income from other sources as against unexplained cash credit u/s 68 of the Act treated by ld. Assessing Officer by observing as follows :- 3.3 Decision: I have carefully considered the facts of the case, the assessment order and the written submission of the appellant. The appellant had claimed long-term capital gain of Rs. 4,20,529/- on account of purchase and sa....

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....y 2007 is selfeqplanatory, as it is in this financial year. The appellant has received accommodation entries of capital gain. The appellant must have decided to purchase a capital gain by obtaining accommodation entries and only at that time the group of Mr. Mukesh Choksi have created these entries. It is, therefore, clear from facts that the transactions are bogus. The claim of the appellant, that it was not given the copy of the statement of Shri Mukesh Choksi, is not relevant as the factual information on record coupled with the result of enquiries made in the case of Mukesh Choksi clearly establishes the facts. The furnishing of statement to the appellant would not result into any new finding or negation of the facts which are already on records. It is also noted that the appellant did not request for the copy of statement during the course of assessment proceedings. Further it is the claim of the appellant that it has received long term capital gain and, therefore, the evidence or the statement in support of its claim should be given by it. The AO had duly confronted the evidences available with him to the appellant, but the appellant could not furnish any further information ....

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....dhir Balraj Jumani HUF vs.ITO, Wd-7(3), Ahmedabad in ITA No.1570/Ahd/2012 for Asst. Year 2003-04. 7. We have heard the rival contentions and perused the record placed before us. Grounds of appeal raised by assessee are raising two issues, firstly challenging the reassessment proceedings u/s 147 of the Act and secondly treating the long term capital gain from sale of shares as income from other sources as held by ld. Commissioner of Income Tax(A). On perusal of the facts we observe that the impugned transaction relates to sale of 240 shares of Jai Corporation. Ld. counsel for the assessee has referred to the submissions made before the lower authorities and submitted that 240 shares of Jai Corporation were sold through Shilpa Stock Broker (P) Ltd.from whom cheque was received against the sale of shares which are duly reflected in his bank account. It is also submitted that Jai Corporation is listed with National Stock Exchange since 26th November, 1997 and assessee has extracted high and low prices of the shares and sale price of shares sold which were at par with the fair market value on the date of entering transactions. However, ld. Assessing Officer and thereafter ld. Commissio....

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....ld. It is not the case of the Revenue that the consideration paid by the assessee at the time of purchase of shares was received back in cash, nor it is the case of the Revenue that the sale consideration received by the assessee was returned back in cash. It is also not the case of the Revenue that the shares in question are still lying with the assessee, nor it is the case of the Revenue that the amounts received by the assessee on sale of the shares is more than what is declared by the assessee. 14. The entire assessment is based upon the statement of Shri Mukesh Choksi. It is an undisputed fact that neither a copy of the statement was supplied to the assessee nor any opportunity of cross-examination was given by the Assessing Officer/CIT(A). The Hon'ble Supreme Court in the case of Andaman Timber Industries in Civil Appeal No. 4228 of 2006 was seized with the following action of the Tribunal:- "6. The plea of no cross examination granted to the various dealers would not help the appellant case since the examination of the dealers would not bring out any material which would not be in the possession of the appellant themselves to explain as to why their ex factory prices rema....

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....nation and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17.03.2005 was passed remitting the case back to the Tribunal with the directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. In view the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the Show Cause We, thus, set aside the impugned order as passed by the Tribunal and allow this appeal." 16. On the strength of the aforementioned decision of the Hon'ble Supreme Court, the assessment order has to be quashed. 17. For the sake of the completeness of the adjudication, even on facts of the case, the orders of the authorities below cannot be accepted. There is no denying that consideration was paid when the shares were purchased. The shares were thereafter sent to the company for the transfer of name. The company transferred the shares in the n....