TaxTMI 
TaxTMI 
2016 (10) TMI 1139
X X X X Extracts X X X X
X X X X Extracts X X X X
....under section 143(1) of the Act. The case of the assessee was reopened under section 147 of the Act and the notice u/s 148 of the Act dated 13.1.2012 was issued. On receipt of information from DDIT Investing Wing 1(4) Mumbai, the AO found that the assessee was one of the beneficiaries who had availed bogus bills/accommodation entries through M/s Alliance Intermediateries and Network Pvt Ltd. which was a group concern run by Shri Mukesh Chokshi. The AO on the basis of said information by DDIT Int.U 1(4), Mumbai reopened the case of the assessee after taking the approval from the Addl.CIT. During the year the assessee has shown STCG on sale of Rs. 10000 equity shares of M/s Aptech Ltd which was sold through R R Nabar and Co. Shares Brokers Pvt Ltd on 2.3.2006 for a total consideration of Rs. 11,97,600/-. The said shares were claimed to be purchased on 19.5.2005 through M/s Alliance Intermediateries and Network Pvt Ltd for a consideration of Rs. 3,31,573/- and accordingly, the assessee disclosed STCG of Rs. 8,66,100/-. The assessee was found to be beneficiary of the said bogus transactions during the course of search operation on Mr.Mukesh Chokshi and his group companies when the sear....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he STCG as unexplained cash credit u/s 68 of the Act. Being aggrieved by the order of AO, the assessee preferred an appeal before the first appellant authority who also dismissed the appeal of the assessee and enhanced the addition from Rs. 8,66,100/- to Rs. 11,85,586/- by observing and holding as under : "5. I have carefully considered the facts relating to the grounds raised in appeal as they emanate from the impugned order and the submissions made during these proceedings. 5.1 Ground No. 1, is general in nature and requires no specific adjudication. Accordingly the same is treated as dismissed for statistical purposes. 5.2 In Grounds No. 2, 3 and 4 the appellant has challenged the addition of Rs. 8,66,100/- as unexplained cash credit u/s 68. During the course of reassessment proceedings the AO noted that the appellant had shown capital gain on sale of 10,000 shares of Mls Aptech Ltd. on 02/03/2006. The AO further noted that these shares had been shown as purchased from M/s Alliance Interrnediaries and Network Private Ltd. for an amount of Rs. 3,31,573/-. The AO observed that though the shares were stated to have been purchased on 19/05/2005, the paymen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s clear that the main evidence relied by the appellant in support of the contention that the transactions in question are genuine comprises brokers notes/bills issued by M/s Alliance Intermediaries & Network Pvt. Ltd. (aka Mahasagar Securities Ltd.) and the fact that the sale proceeds were received through cheques. In the following cases of Shri Mukesh Choksi and his associates, the ITAT has held that Shri Mukesh Choksi and all his associates are engaged only in providing bogus accommodation entries of shares transactions etc. (a) Order dated 28.03.2008 in ITA Nos.4625/Mum/2005 and 5000/Mum/2005 for AY 2002-03 in case of M/s. Gold Star Finvest P. Ltd. (b) Order dated 29.08.2008 in the cases of (i) Richmond Securities P.Ltd (Subsequently known as Mahasagar Securities P. Ltd. and now knows as Alag Securities) in ITA No.4624/MUM/2005 for the A.Y.2002-03, and M/s. Alpha Chemie Trade Agencies Pvt. Ltd. In ITA No.4999/Mum/2005 for the A.Y.2002-03. c) Order dated 30.05.2008 in ITA No.4912/Mum/2005, in the case of M/s. Mihir Agencies Pvt. Ltd. 5.5 In light of the above facts, the A.R. of the appellant, vide order sheet noting dated 19/03/2015, was asked ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt shown to or from M/s Alliance Intermediaries & Network Pvt. Ltd. cannot be held to be genuine as these are only accommodation entries. Therefore, it is held on the basis of various decisions of ITAT, Mumbai in the case of Shri Mukesh Choksi Group Companies that the assessee has not made any genuine purchases of shares of M/s Aptech Ltd. since Shri Mukesh Choksi and his Companies have indulged in providing only accommodation entries i.e. M/s Alliance Intermediaries and Network. Private Ltd. has provided only an accommodation entry. In absence of a genuine purchase, deduction for cost of purchase cannot be allowed. Hence, the entire sale proceeds of shares of M/s Aptech Ltd. of Rs. 11,85,576/- is assessable as income of appellant under head 'Income from Other Sources' and the income of the appellant is enhanced by an amount of Rs. 3,19,476/-. The A.O is therefore directed to assess Rs. 11,85,576/as income from other sources from the bogus shares transaction. In view of these facts, the addition of Rs. 8,66,100/- is enhanced to Rs. 11,85,576/-. Accordingly, the grounds raised by the appellant are dismissed" 4. The ld. AR of the assessee vehemently submitted before us tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es in the marked and it is proved during the course of search proceedings. The ld. DR prayed for that the order of the ld.CIT(A) be upheld. 6. We have carefully considered the rival submissions and perused the material placed before us including the orders of authorities below. We find that the assessee has purchased 10000 shares of M/s Aptech Ltd through M/s Alliance Intermediaries and Network P Ltd which was a group company of Mr. Mukesh Chokshi. We also find that the said shares were purchased and paid through banking channel by cheque bearing no.564901 dated 20.2.2006 drawn on Bank of Baroda. The said statement was corroborated by a documentary evidences and were placed before the AO. The said shares were also demated thereafter ultimately sold on 2.3.2006. Thus, the assessee has proved the share transactions by filing a copy of account with broker, copy of bank statement and Demat account. We find that the third party evidence has been used against the assessee without allowing the assessee to cross-examine Mr.Mukesh Chokshi on the basis of which the addition was made. Whereas the assessee has furnished all the necessary evidences to prove that share transactions were not b....