TaxTMI 
TaxTMI 
2017 (11) TMI 1731
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....sessment proceedings initiated U/s.147 /148, on a deceased person, are bad in law, illegal, void ab initio, time barred without jurisdiction and proper authorization. 2. That the Ld. Commissioner of Income Tax (Appeals)-S, Ahmedabad has erred in confirming the addition of Rs. 5,59,500/- as undisclosed income, as against short term capital gain declared by the appellant on sale of shares. 3. The appellant contends that there is no information on record on the basis of which, it can be inferred that the appellant's income escaped the assessment and the proceedings initiated U/s. 148 of the Act for making roaming inquiries are illegal, bad in law and void ab initio. Therefore, addition to the income is without \ proper application of mind, law and natural justice. 4. That neither Ld. CIT(A)-5 or Ld. A.O. did not provide a copy of statement of Mukesh Choskhi dated 25/11/2011. The appellant contends that there was no reference of the transaction of the appellant, hence it cannot be relied for reopening the assessment proceedings for roaming inquiry and making addition to the income of the appellant. 5. That the appellant had purchased shares payin....
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....me of Rs. 2,92,496/- was filed on 1st Nov, 2004. Information was received on the basis of search and seizure action u/s. 132 carried out in the group cases of M/s, Mahasagar Securities Pvt. Ltd. (now known as Alang Securities Security Pvt. Ltd.) wherein in the course of search Shri Mukesh Chokshi, who was managing and controlling the said group had admitted in his statement that that the group was engaged in providing bogus entries of speculation profit/loss, commodities profit/loss. Subsequently, the case of the assessee was reopened by issuing of notice u/s. 148 on 30th March, 2011 stating that the assessee was also involved in such bogus transactions during the financial year 2003-04 relevant to the assessment year 2004-05. During the course of assessment proceedings, the assessee has raised objection that in his case earlier order u/s. 143(3) r.w.s. 147 was passed on 24th December, 2010 and once again notice u/s. 148 was issued. The assessing officer has explained that contention of the assessee was incorrect because in earlier the order u/s. 143(3) r.w.s. 147 was passed for the assessment year 2003-04 and not for assessment year 2004-05.During the course of assessment proce....
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....osed income u/s. 68 to the total income of the assessee. Aggrieved assessee preferred appeal before the ld. CIT(A). The ld. CIT(A) has allowed the appeal of the assessee partly by observing as under:- "4.16 In view of the discussions in the proceedings paras, it is concluded that the transaction of the appellant has its direct nexus with bogus and fraudulent transactions committed by the promoters of the company and the appellant has willfully, deliberately and knowingly conspired there in. The appellant cannot argue that it was cheated into such transactions. Fact of the matter indicate that all the beneficiaries ( i.e. the persons who bought and sold shares) of Sh Mukesh Choksi's group of companies were active collaborators to the bogus share transactions with the intent and objective of giving a colour of credence and genuineness to the incomes otherwise, earned from unaccounted sources. 4.17. Here it is to be mentioned that there was search and seizure action carried out on 25.11.2009 in the group cases of M/s. Mahasagar Securities Ltd. and its group companies controlled by Shri Mukesh N. Chkshi at Mumbai. During the course of search proceedings Shri Mukes....
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....e High Court of Gujarat in the case of Pr. Commissioner of Income Tax vs. Vineet Suresh Chandra Tax Appeal 645 of 2017 and the decision of the coordinate bench of ITAT Ahmedabad . On the other hand, ld. departmental representative has supported the order of ld. CIT(A). 6. We have heard both the sides and perused the material on record. We find that the Co-ordinate Bench of the ITAT Ahmedabad has decided the identical issue in the case of the ACIT vs. Vineet Suresh Chandra Agrawal vide ITA No. 1442/Ahd/2013 dated 6th Jan, 2017. The relevant part of the decision is reproduced as under:- "9. We have heard the rival contentions and perused the material available on record. Apropos the issue of alleged share scam of Shri Mukesh Choksi, the Mumbai Tribunal has already considered the aspects of alleged "Shares Scam", involvement of Shri Mukesh Choksi and group entities in various cases. In similar set of facts, the Tribunal has deleted addition made u/s. 68/69 of the I. T. Act, 1961 qua the claims of long term and short term capital gains in following cases which are relied on by ld. CIT(A): (a) Smt. Hamida J. Rattonsey vs. DCIT (b) ITO vs. Rasila N. Gada ....
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....ot concluded on the floor of the Stock Exchange. The matter being so, there is no probative value for the negative replies solicited by the assessing authority from the respective Stock Exchanges. We are of the considered view that the materials collected by the assessing authority from the Stock Exchanges are not valid to dispel or disbelieve the contentions of the assessee." 9.3 The Mumbai Tribunal order in the case of Shri Mukesh Moralia has been upheld and confirmed by the Bombay High Court in Tax Appeal No.456 of 2007. Therefore, in view of foregoing, the shares purchased through off-market trade the same cannot be considered nongenuine ignoring the facts that the purchases are accepted by Department in preceding year by two assessments for the same year and the payments of purchases and sales are effected by a/c payee cheques. 9.4 Further in the case of Smt. Jaya Vineet Agarwal for A. Y. 2004-05, ld. CIT(A)-XI, Ahmedabad vide its Appeal order No. CIT(A)-XI/437/ACIL Cir. 6(5)/11-12 dated 07/05/2012, on similar facts, has also deleted addition u/s. 69 of the I.T. Act, 1961 on the facts and circumstances relating to the statement of Shri Mukesh Choksi. This ord....
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....would be pertinent to mention here that though the shares were purchased in physical form, the same were sent to the company with share application form and the shares were transferred by the company in the name of the purchaser. Thereafter, the shares were transferred in the demat account, from where they were sold. It is not the case of the Revenue that the consideration paid by the assessee at the time of purchase of shares was received back in cash, nor it is the case of the Revenue that the sale consideration received by the assessee was returned back in cash. It is also not the case of the Revenue that the shares in question are still lying with the assessee, nor it is the case of the Revenue that the amounts received by the assessee on sale of the shares is more than what is declared by the assessee. 14. The entire assessment is based upon the statement of Shri Mukesh Choksi. It is an undisputed fact that neither a copy of the statement was supplied to the assessee nor any opportunity of crossexamination was given by the Assessing Officer/CIT(A). The Hon'ble Supreme Court in the ITA Nos. 810 to 815, 922 to 926/Ahd/2015 Shri Pratik Suryakant Shah & others - Total....
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....s-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter ITA Nos. 810 to 815, 922 to 926/Ahd/2015 Shri Pratik Suryakant Shah & others - Total 11 Appls AYs 2006-07 & 2008- 09 of the cross-examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17.03.2005 was passed remitting the case back to the Tribunal with the directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. In view the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witne....
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.... assessees. 20. In the result, all the appeals filed by the assessees are allowed". Respectfully following the decision of the Co-ordinate Bench of the ITAT as supra in this case, the appeal of the assessee is allowed. 7. In respect of ground of appeal of the assessee regarding validity of re-assessment u/s. 147/148 the ld. counsel has retreated the same argument which was put before the ld. CIT(A) that the assessing officer issued noticed u/s. 148 beyond the period of four years which was not sustainable. It was also stated that assessee has furnished all the details regarding purchase of shares like purchase contract, copy of bank statement, sale contract, bill for sale of share of the broker, details of cheque payment received for sale proceeds, copy of bank statement, statement where the sale proceeds were deposited, delivery of share from demat a/c of the assessee etc. On other hand, ld. departmental representative supported the order of the ld. CIT(A).We observed that Information was received on the basis of search and seizure action u/s. 132 of the act carried out in the group cases of M/s, Mahasagar Securities Pvt. Ltd. (now known as Alang Securities Security Pvt. Ltd....