TaxTMI 
TaxTMI 
2011 (10) TMI 699
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....his statement dated 26.4.2002 and further admitted that he had issued bogus bills of share transactions and charged the commission accordingly. The parties paid him cash equivalent to the bills amount and received cheques from the broker companies. In this way, both the parties acted purely in their manual pecuniary interest. Ultimately, resulted in tax evasion by the ultimate beneficiaries of such transactions. The AO observed that the assessee has adopted the same method and has shown long term capital gain of Rs. 1,94,849/-. A notice u/s 148 of the Income Tax Act, 1961 (in short the Act) was issued to the assessee on 29.4.2005 after obtaining the approval of the Jt,CIT, Range 21(2), Mumbai. In response to the notice, the assessee has stated that the return of income filed on 11.7.2001 may be treated as filed in response to the notice u/s 148 of the Act. In response to the notices u/s 142(1) and 143(2), the assessee stated as under: "I am in receipt of the reasons for reopening of the assessment and also copy of statement of Mr. Mukesh Choksi In this regard, I have to state as under: "My HUF had purchased the shares of Rashel Agro Limited through a ....
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....ctions are totally different from those referred by Mr. Mukesh Choksi in his statement." Under these circumstances, it proves that our transactions were for sale of shares and payment received was as sale consideration for these shares. Further Mr. Mukesh Choksi's statement has no connection with our transaction we had with Richmond Securities Pvt.Ltd. We therefore request you to treat our transactions of capital gain as genuine transactions and accept our claim of capital gain as per return of income filed with you. Without prejudice to the above, if your honour is not satisfied with the above explanation, we may request your honour to facilitate us to cross examine Mr. Mukesh Choksi or his statement." The AO further observed that the assessee has also filed contract note of purchase and sale of 8200 shares of Rashel Agro Tech. Limited. The AO further observed that it was stated that the assessee had entered into a genuine transactions of shares. The long term capital gains received by the assessee is Rs. 3,89,050/- cleared through the account with Shamrao Vithal Co-operative Bank Ltd., whereas the amount shown by the DDIT(Inv.) is Rs,3,23,660/- vide ....
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....ong term capital gain of Rs. 3,23,559/- on the sale and in support a photocopy of the cheque of Citi Bank dated 17.8.2000 for Rs. 3,23,559.75 was given to the assessee and on that basis the assessee's case was re-opened u/s 148 of the Act. However, no such transaction was entered into by the assessee inasmuch as it does not belong to the assessee. He further submits that in the assessment order, the AO has not made addition of Rs. 3,23,559/- but the addition on sale of 8200 shares of Rs. 3,89,050/- has been made. He, therefore, submits that the proceedings initiated by the AO u/s 148 are not valid in law. He therefore submits that in view of the documentary evidence submitted by the assessee, the assessee has entered into the genuine transaction of sale of shares, therefore, the AO has erred in making the addition of Rs. 3,89,050/- The learned counsel for the assessee after filing the paper book containing the decisions up to pages 1 to 117 of the paper book, referred only one case in support of his case i.e. Bina H Kanakia V/s ITO in ITA Nos.2452 & 2453/Mum/2006 (AYs 2000-01-2001- 02) dated 23.1.2009. 6. On the other hand, the ld. DR while relying on the order of the AO and ld.....
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....ove factual matrix of the case. There is no live link between the reasons recorded by the AO and the addition made by the AO. We do not find any merit in the submissions of the learned DR that the plea taken by the assessee is new plea which does not borne out from the order of the ld. CIT(A). However, we find that all these submissions are duly mentioned in paragraph 4 of the assessment order which have also been extracted in paragraph 2 of this order, thus the assessee has not taken any new plea, therefore, the plea taken by the ld. DR is devoid of any merit and the same is, therefore, rejected. 8. In the case of CIT V/s (1) Kelvinator of India Ltd. (2010) 320 ITR 561(SC), the hon'ble Supreme Court observed and held (page 564): "On going through the changes, quoted above, made to section 147 of the Act, we find that, prior to the Direct Tax Laws (Amendment) Act, 1987, reopening could be done under the above two conditions and fulfilment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act (with effect from 1st April, 1989), they are given a go-by and only one condition has remained,....