2016 (10) TMI 1125

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....he I.T. Act. 2. Facts relating to the issue are stated in brief. The assessee filed its return of income declaring total income of Rs. 5.48 lakhs on 29.7.2004 which was processed u/s. 143(1) of the I.T. Act. Subsequently the Assessing Officer received information from DDIT(Investigation) that search action conducted in Mukesh Chokshi group has revealed that the said group companies were engaged in providing bogus bills for generation of short term/long term capital gains. The main person of the group named Shri Mukesh Chokshi had admitted that all transactions carried out by his group-companies were bogus and he has provided only accommodation bills. It was stated that the assessee was one of the beneficiaries of the above said bogus tra....

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....g Officer assessed long term capital gain of Rs. 11,27,572/- as undisclosed income of the assessee u/s. 68 of the Act. 3. Before learned CIT(A) the assessee challenged the validity of reopening and also assessment of long term capital gain as undisclosed income of the assessee. Learned CIT(A) expressed the view that the Assessing Officer had sufficient reason to believe about escapement of income and accordingly, by placing reliance on the decision rendered by Hon'ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers (P) Ltd. (291 ITR 500) and also other cases mentioned in the order, dismissed the ground relating to validity of reopening of the assessment. 4. Before learned CIT(A), the assessee also contended that he was n....

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....mitted that the assessee has made specific plea asking for the statement before the Assessing Officer during the course of assessment proceedings by filing a letter dated 18.10.2011. Subsequently when the appellate proceedings were going on, the assessee filed another letter dated 16.4.2012 before learned CIT(A) asking for a copy of statement. Thereafter the assessee filed another letter dated 19.10.2015 before the Assessing Officer asking for copy of statement given by Mukesh Chokshi, since the matter is pending before the ITAT. In response thereof, the Assessing Officer has furnished a letter dated 11.5.2015, wherein the Assessing Officer has stated that cross examination of Mukesh Chokshi is not relevant after completion of the assessmen....

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.... that the Tribunal has accepted the version of Shri Mukesh Choksi and accordingly estimated the commission income in his hands and also in the hands of his group of companies He further submitted that the broker license of M/s Gold Star Finvest P. Ltd has been cancelled subsequently. 9. We have heard rival contentions and perused the record. We notice that the assessing officer has disbelieved the claim of Long term capital gains only on the basis of the statement given by the broker. However, we notice that the assessee has furnished the details of purchase of shares, copies of share certificates, the details of sale of shares and the details of receipt of money towards the sale consideration. Further it is stated that the sale of share....