TaxTMI 
TaxTMI 
2017 (5) TMI 1111
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.... Central, Mumbai that assessees were the beneficiaries of accommodation entries provided by Shri Mukesh Chokshi and the latter had given a sworn statement in this connection whereby had admitted that he had provided accommodation entries. As per the information received, assesse, Smt. Sarita Devi was stated to have received accommodation entries totalling to Rs. 2.20 crores in the form of share transactions and Smt. Nitika Kumari an amount of Rs. 1.60 crores in the form of share transactions. The A.O. has reopened the assessments under section 147 and issued notices on 25.02.2014 which were served on 04.03.2014. In response, assessees filed letters dated 02.04.2014 requesting the A.O. to treat the returns filed in originally to be treated in response to the notice under section 148. Subsequently, in the scrutiny proceedings assessees herein have objected to the reopening of the assessments as assessees have already declared the incomes and there is no tangible material to reopen the assessments. A.O. however did not agree with the contentions and after issuing various show cause notices finally concluded that the transactions undertaken by the assessee with M/s. Alliance Intermedia....
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....risdiction as it does not meet the statutory conditions and compliance as enjoined in section 147, 148, 149, 151 of the I.T. Act, 1961 and therefore, ought to have quashed the entire reassessment proceedings. 3. The Hon'ble CIT(A) failed to note that all the particulars in relation to purchase and sale of shares were filed along with the original return of income and therefore the reopening of assessment on the same set of facts is invalid, bad in law and therefore the entire reassessment proceedings has no legs to stand. 4. The Ld. CIT(A) failed to note that the entire details relating to share transactions were filed along with the R.O.I. and that there was no tangible material in the possession of the A.O. to warrant the issue of notice U/s.148 of the I.T. Act, 1961 which is invalid and more so the reassessment proceedings. 5. The Hon'ble CIT(A) failed to note that U/s.151 of the I.T. Act, 1961 it is the J.C.I.T. who is to grant the approval for reopening and therefore the notice issued U/s.148 with the approval of the C.I.T. is invalid, bad in law and totally contrary to provisions of the I.T. Act and therefore the entire reassessment proceedings out to have been quashed.....
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....that these shares were transferred in the De-mat account and the evidence was already furnished. 5.1. As far as the transactions of Smt. Nitika Kumari is concerned, it was submitted that she has only short term capital gain having purchased and sold in a period of 03 days and the shares were in the broker's account not transferred to assessee's De-mat account. It was further submitted that assessees have furnished the necessary purchase invoices, sales invoices, ledger copies, De-mat account certificates issued by the broker to support that the transactions are genuine. 5.2. With reference to the objection of the A.O. that the said broker is not registered in NSE/BSE, it was submitted that he was a sub-broker of a broker registered with them and at the time of entering into transactions, assessee had no connection with Sri Mukesh Choksi and the transactions were entered in normal course. Assesses are not aware about the denial subsequently by the said person, who has not directly dealt with the assessees. Even otherwise it was submitted that the so-called statement of Mr. Chokshi was not provided to the assessee nor the information on the basis of which the assessment was reopene....
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....mptions and presumptions therefore, reopening of assessments per se is not correct. Since the assessee has offered capital gains which was accepted originally and since there is no contrary information, the Ld. CIT(A) should have directed that the capital gains should have been assessed as such only and not as income from other sources. 8. The Ld. D.R. in reply relied on the statement of Shri Mukesh Chokshi to submit that he was in the habit of providing accommodation entries and this aspect was exhaustively dealt with by Ld. CIT(A). He supported the orders of Ld. CIT(A). 9. Learned Counsel for the Assessee, in reply however submitted that there is no evidence/reliability with reference to the statement of Mr. Mukesh Chokshi and he relied on the Coordinate Bench decision in the case of Paduchuri Jeevan ITA.No.452/Hyd/2015 dated 19.08.2016 wherein the Coordinate Bench has considered that Mr. Chokshi is in the habit of giving such statements periodically every three years and no reliance can be placed on those statements and in that case the transactions are accepted as genuine. Learned Counsel for the Assessee also relied on the Coordinate Bench decision in the case of Mr. Mukesh ....
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.... that Revenue is not having any information and even though the assessment is reopened on that basis as communicated in the reasons for reopening, A.O. simply denies the same in order to avoid cross-examination to be provided to the assessee. Under these circumstances, since neither the communication from CCIT, Mumbai nor the so-called statement of Mr. Mukesh Chokshi was provided either for verification or for cross-examination, it cannot be stated that A.O. has any 'tangible information' so as to reopen the assessments under section 147. The returns were already filed admitting incomes under capital gains. These were accepted under section 143(1). Assessees have furnished the necessary information of purchase bills, sale bills, ledger accounts, De-mat account copies in support of transactions. Since there is no other information so as to come to conclusion that the transactions entered by the assessee are bogus, these are to be accepted as transactions entered in normal course. The enquiry from the NSE that M/s. Alliance Intermediaries and Net Work P. Ltd., is not a broker or sub-broker does not establish that the transactions with that company is bogus. Moreover, as far as Smt. S....