TaxTMI 
TaxTMI 
TaxTMI 
2006 (4) TMI 555
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by Rs. 20,201 to Rs. 2,13,698/10,341 to 1,09,389) as income from other sources by the Assessing Officer as against the amount of Rs. Nil shown under income from Long Term Capital Gain and that too without giving adequate opportunity of being heard and without confronting the material and evidences gathered at the back of the assessee. 4. That on the facts and circumstances of the case, the learned CIT(A) has erred in confirming the levy of interest under section 234B of the Act amounting to Rs. 53,148/63,692 (subsequently enhanced/reduced to Rs. 76,151/22,413) levied by the Assessing Officer. 5. That on the facts and circumstances of the case, the ld. CIT(A) has erred in confirming for not granting the opportunity of cross examination by the Assessing Officer. 6. The appeal order is against the facts and records of the case." 2. In the case of Shri Atul Jain, the amount of Rs. 1,19,370 in place of Rs. 2,33,899 in the case of Smt. Vinita Jain, is under challenge. All other grounds in appeal are identical. 3. In the case of Mrs. Vinita Jain, the appellant had ostensibly purchased 4300 shares of M/s. Globe Commercials Ltd. on 21-3-1995 at the rate of Rs. 3.05 per share i.e., for....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the shape of cheque/draft amounting to Rs. 2,12,635. Accordingly, the amount so invested was treated as undisclosed investment by the assessee and by estimating 10 per cent as commission paid for raising this accommodation entry a further addition of Rs. 21,264 was made to the undisclosed investment of Rs. 2,12,635 as stated hereinabove. 5. In the case of Shri Atul Jain, the appellant had ostensibly purchased 2200 shares of M/s. Globe Commercials Ltd. on 21-3-1995 @ Rs. 3.05 per share i.e., for a total consideration of Rs. 6,715 (plus service tax of Rs. 5.50) through one M/s. Maheshwari Sons, Stock & Share Broker. Subsequently, the subject 2200 shares of M/s. Globe Commercials Ltd. were ostensibly sold by the appellant on 22-4-1996 @ Rs. 49.50 per share (net of service tax) thereby fetching a total consideration of Rs. 1,08,845. The shares were sold through another broker Shri Satish Kumar Goel, Proprietor of M/s R.K. Aggarwal & Co. (and who was later found to be a practicing Chartered Accountant). The aforesaid rates of Rs. 3.05 and Rs. 49.50 were stated to be those which had prevailed at the relevant time on the Delhi Stock Exchange and the Magadh Stock Exchange. The assessee ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation of mind by the Assessing Officer. The reopening in this case has been done because the DDIT(Inv.) Gurgaon believes that the transaction of capital gains is bogus. The very starting point to initiate the proceedings is thus illegal and vitiated. 8. Secondly the satisfaction is by CIT and not by the Assessing Officer. The Ld. CIT in para 12 of the approval proforma has accorded his satisfaction by saying "yes". He has not applied mind to the reasons. There is always a distinction between the reasons recorded and the report of the Assessing Officer for seeking approval in the proforma. Reference was made to the Apex Court judgment in the case of Chhugamal Rajpal v. S.P. Chaliha [1971] 79 ITR 603 . Thirdly he states that as per section 151(2) of the Act, the approval was to be taken from Joint CIT whereas the Assessing Officer has acted contrary to law and obtained approval of learned CIT. When a statute requires, a thing to be done in a certain manner, that thing has to be done in that manner alone. Doing of that thing in any other mariner is prohibited. In S. Sewa Singh Gill v. CIT [1962] 46 ITR 152 , the Hon'ble Punjab & Haryana High Court has held that where statute required....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rgaon. In the enquiry conducted by the DDIT (Inv.), Gurgaon, the said Shri Satish Goel has clearly admitted that all the transactions in his account with Corporation Bank, Karol Bagh are bogus. He had also stated that cash was received from all the beneficiaries, deposited in the said bank account and in turn cheques or drafts were issued from the said account which was shown as sale proceeds of shares but in actuality no such transaction had taken place. In view of this categorical stand taken by him coupled with the fact that the company M/s. Globe Commercial Ltd. whose shares are claimed to have been transacted has also denied of any such transaction, it was not necessary for the Assessing Officer to make any further enquiry or confront the assessee with any specific transaction in the said account for recording a prima facie satisfaction about the escapement of income. In a similar situation, the Hon'ble Punjab & Haryana High Court in the case of Shri Pal Jain v. ITO [2004] 267 ITR 540, has upheld the initiation of proceedings under section 147 of the Act and dismissed the writ. 12. The learned DR then contends that the reasons are duly recorded in the form for recording the r....