TaxTMI 
TaxTMI 
TaxTMI 
2019 (1) TMI 15
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....e Learned A.O. has interalia held the transaction to be nongenuine on the ground that transaction are done with M/s Vitale Bioscience Ltd. He has relied upon the statement of Mr. Pratik which was not given to assessee and no cross examination was allowed. The learned A.O. and CIT (A) ought to have followed the proper procedure to adhere to the rules of natural justice. He may be directed to do so now. 3. The Learned CIT (A) ought to have held that the order of A.O. is perverse as the A.O. has interalia relied upon statement of Pratik Shah without giving copy of statement and cross examination. 4. The Learned CIT (A) has erred in upholding the charging of interest u/s 234A /234B/234C. 2. The brief facts of the case are that the assessee has shown income from Purchase & Sale of Land and Securities, brokerage & consultation, commodity trading, bank interest & dividend. 3. The assessee owned a land admeasuring 6880 sq Mts at Survey No 262( 692) at village -Bhadaj, Taluka - Ghatlodia (the erstwhile Daskaroi), Ahmadabad which he had bought on 21/10/2011 vide registration no 19001/2011 of Sub Registrar, Ahmedabad-2,Adalaj . Cost of the land in the Profit & Loss account shown by the ....
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....0.He has further stated that the price of the Bond as on 01/01/2013 was Rs. 100/- whereas the assessee has shown sale of the bond at Rs. 90.67 only. The A.O. has also stated that summons u/s 131 was issued to the assessee but nobody has attended in response to the said summons. The A.O. has observed that the Bonds have been transferred between three parties on the same day just after the date of issuance of bond. The entire transaction has taken on 1.1.2013 and the receipt and sale of 500 bonds have taken place within a very short duration. He has also observed that all these transactions have been done only at prices which have no cooreiation with the prices mentioned in the Exchange. He has also stated that the assessee had failed to attend the summon. 7. Thereafter the A.O. vide letter dated 2.3.2016 and subsequently vide letter dated 14.3.2016 has issued a show cause as under:- "Your submission on various dates reveal that on 1.1.2013 you have purchased the 500 units (Lot size Rs. 1 Lac Each unit) of 9% BOM LOWER TIER H BONDS (INE457A09199) OFF-market from Fortune Gilts Pvt Ltd at the rate of Rs. 100.02/- and you have immediately sold 500 units of the said bond OFF-market t....
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....ale value or exaggerated purchase value and there is no consequent leakage of revenue. The assessee is not selling any goods/house hold assets, the price of which can be decided privately by two parties but it is selling an asset which have to be reported to one of the Stock Exchanges of the Country authorized by SEBL." ii To maintain transparency on the Corporate Bonds , the Regulatory Body SEBI vide Circular No. SEBI/CFD/D1L/BOND/1/2006/12/12 dated December 12, 2006 authorized Bombay Stock Exchange Limited (BSE) to set up and maintain a corporate bond reporting platform to capture all information related to trading in corporate bonds as accurately and as close to execution as possible. Subsequently vide circular No. SEBI/CBM/BOND/1/2007/01/03 dated 01.03.2007 has authorized NSE for the similar purpose. It has been ascertained that the transaction has not been reported to the Exchange and the assessee has not fulfilled the statutory obligation as laid down by SEBI, which clearly shows that the intention of the assessee was mala fide from the very beginning of the transaction. The assessee has adopted the intra-day trade coupled with transfer of the units between various demat ....
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....n a arbitrary basis but in a complete transparent manner and anybody can go through the website of the stock exchange where in the Weighted Average price has been seen at Rs. 100/- and there has been no trades in this bond till date . The assessee has sold the bonds on 1,1.2013. The primary onus is on the assessee to specifically justify the valuation of Sale price of Bonds with supporting documentary evidences especially in circumstances where the valuation is lesser than the last traded price shown by the NSE, Specifically when the Bank entries reveal that the assessee had entered into these transactions in almost the same time zone. However as the assessee has not brought any concrete material i.e Valuation report or any evidence which could justify its sale price, the department is not duty bound to justify the ingenuineness of material not produced. vi. Further, upon verification of details called for during the course of assessment proceedings it has been observed that the payment of this loss had been made from the 'Unsecured Loans' taken from 'El-Dorado Biotech Pvt Ltd (PAN AABCE1885F) amounting to Rs. 48350000/-. It has also been observed that 'Shri Ajay ....
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....or within two or three days. I will provide the complete details in this regard within five days." In the statement, the director of Vitale Biotech Ltd, Shri Pratik Shah has admitted that through his concerns that he is engaged in the business of giving accommodation entries on commission basis. Although the said transaction has been admitted in respect of Amrapali Group, it pertinent to note here that Vitale Biotech Ltd has also been held as one of the accommodation entry provider and the case has been centralized subsequent to search proceedings viii. The Transaction was done with the money borrowed of Rs. 15 Crore from Vitale Bioscience Ltd. and within an hour book the loss of Rs. 4,67,50,000/-. The chain of transaction was reflected above and ultimately account had been settled with cross sale of different bonds.to them. ix. Further in the case of CIT vs Durga Prasad More (82 ITR 540), it was held by Hon'ble Apex Court that " it is-true that apparent must be considered real unless it is shown that there are reasons to believe that apparent is not real. If all that an assessee -who -wants to evade tax is to have some recital made in documents either executed by him o....
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....urchase of shares. Such transactions as are purely preconceived exercise, to evade tax. In tax matters, it is imperative that realities of the transactions are required to be gone into, with view to finding out the true nature of such transactions. Entirety of facts and circumstances of the present case clearly demonstrates, in a terse and telling manner that the whole transactions are not true commercial share transactions but fabricated transactions. Such transactions were mutually self-serving. xiv. In this specific context, it is imperative to state that it is a well settled legal proposition that 'burden of proof is on the assessee as the claim of short term capital loss had been made by them. The assessee, except giving details of such purchase and sale of bonds, failed to prove and establish the genuineness of such bond transactions at the rates as convenient to them having no regard to the real market factors, xv. In the present case, there is an obvious and plain transaction of tax evasion which has been clothed with the smoke-screen of subterfuges, by the assessee. The facts of the instant case clearly reveals that such trading transactions of purchase and sale Of....
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....o stated that out of 4 transactions entered during the year, there was loss in one transactions and profit in three transactions and AO has accepted profit transactions which are of similar nature hence there is no justification for not accepting loss transactions. The arguments of appellant and observations of AO are considered but appellant' plea cannot be accepted mainly for following reasons. (i) The AO at para 3.2 has made summary of transactions of bond carried out by appellant. In all the cases, transactions are settled on same day. It is observed that appellant has earned profit on trading of bond of 10.45% GSPC bond and 9.90% IFCI Bond which are purchased from Vital Bioscience Limited and sold to Fortune Gilts Limited whereas appellant has earned loss of Rs. 4,67,50,000 in transaction of 9% BOM Lower Tier Bond 2022 which is purchased from Fortune Gils Pvt. Limited and sold to Vitale Bio-Science Limited meaning there by here purchaser party in first two case became seller in loss / transactions. (ii) The AO has observed that Fortune Gilts Pvt Limited has shown Nil Income during the year and Vitale Bio Science Limited has shown loss of Rs. 18,987 in Profit & loss acc....
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....rore was received from EI Dorando Biotech wherein Shri Ajay S Patel is director who is also director in fortune Gilts Pvt. Limited from whom appellant has claimed to have purchased bonds which also prove that even loss incurred by appellant is funded by company in which director is also director in company from which appellant has acquired bonds which also prove that transactions are with close persons and they are inter connected. (iv) The AO has also referred to historical date from website of NSE which show that transactions in above bond has taken place on 01/01/2013 being date on which appellant has incurred losses wherein trade price was Rs. 100 whereas appellant has sold such bond at Rs. 90.67 only. The appellant has not given any reason why appellant has incurred losses in such transactions. It is pertinent to note /that when appellant is acquiring bond for Rs. 100 per bond and in few minutes, funds are transferred how market value has been reduced to Rs. 90.67 per bond. The appellant has not given any justifiable reason which can support its contention that transactions were genuine more particularly what was the reason for selling bond at such huge losses. There was ....
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....It is also observed that in present case, entire transaction is squared up in a day rather in four minutes whereas in the case before Hon'ble Ahrnedabad ITAT, the transactions were not squared up in a single day. Thus, said decision is not applicable in present case. So far as choose and pick approach as observed by appellant, it is observed that I have already held that only net loss arising from such off market transactions would be disallowed hence this argument now does not survive. Even in the case of Hon'ble Delhi High court in the case of CIT Vs H.B. Stock Holding Limited 184 Taxman.com 352 relied upon by Appellant, transactions were at market rate and even through stock brokers registered in stock market whereas this is not the case of appellant hence even this decision cannot be made applicable in present case. The decision of Punjab & Haryana High court relied upon by appellant is on consistency principle and ratio of said decision is not applicable in present case. Even decision of Hon'ble Kolkatta ITAT cannot be made applicable in present case as in said case genuineness of transactions was not doubted whereas in present case, AO has doubted such genuineness....
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....red. 40. The Supreme Court in AzadiBachaoAndoian (supra) approved the following passage from the decision of the Gujarat High Court in Banyan and Berry v. Commissioner Of Income Tax: (1996) 222 ITR 831 (Guj): "The court nowhere said that every action or inaction on the part of the taxpayer which results in reduction of tax liability to which he may be subjected in future, is to be viewed with suspicion and be treated as a device for avoidance of tax irrespective of legitimacy or genuineness of the act an inference which unfortunately, in our opinion, the Tribunal apparently appears to have drawn from the enunciation made in McDowell's case [19S8] 154 ITR148 (SC). The ratio of any decision has to be understood in the context it has been made. The facts and circumstances which lead to McDowell's decision leave us in no doubt that the principle enunciated in the above case has not affected the freedom of the citizen to act in a manner according to his requirements, his wishes in the manner of doing any trade, activity or planning his affairs with circumspection, within the framework of law, unless the same fall in the category of colorable device which may properly be call....
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....inciple that transaction done without reasonable purpose but only for avoidance of legitimate tax by using a corporate form can be ignored. However, in the facts of that case, the Court came to the conclusion that the corporate structure was not created for avoidance of tax but for other genuine business purposes. 45. It follows from the aforesaid decision that in order to examine whether a transaction is a device or a subterfuge the answer to the question whether the transaction has any reasonable business purpose would be a vital consideration. Clearly, the use of corporate form to evade tax would be impermissible and it is, thus, necessary in the facts of the present case to look at the transactions entered into by the Assessee and other companies of the Jindal Group. It is at once clear that shares of listed corporate entities of the Group were sold and funds were raised. The sale of these shares had resulted in substantial capital gains in the hands of the investment companies of the Jindal Group including the Assessee and the investment companies were liable to pay tax on the gains so made, in order to avoid paying the tax, the investment companies Including the Assesse....
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....alienation of any rights. The transactions have been so executed to ensure that the rights remained within the Jindal Group. The registered office of the company is at office of JSL; the Board of Directors consists of Sajjan Kumar Jindal s/o Shri O.P. Jindal and AnandPrakashGarg (who was an employee of JSL). Such transactions which are for the sole purpose of contriving a loss cannot in our view be described other than a colorable device. 47. in our view, the AO had rightly found the transaction of sale of rights as a transaction for purchasing taxable losses for the purposes of evading tax. It has been argued that the Assessee had in fact relinquished its rights to subscribe to PCDs and the transaction had been implemented by JSL subscribing to the PCDs and in the circumstances, it could not be disputed that the transaction was genuine. It was contended that such transaction were permissible in law and, therefore, the tax effect of such transactions would necessarily follow. It was further contended on behalf of the Assessee that it is permissible for an Assessee to part with its asset with a view to book a loss. In our view, it cannot be disputed that in a case where an Assesse....
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...., we deem it appropriate to consider the same". Further reliance is placed on decision of Hon'ble Punjab & Haryana High court in the case of Smt. HarjitKaur Vs ACIT 45 taxman.com 186 wherein it is held as under "Section 4 of the Income-tax Act, 1961 - Income - Chargeable as (Tax planning) -Assessment year 2008-09 - Assessee sold land which resulted in short-term capital gain - In same year assessee claimed short-term capital loss on sale of shares of an unlisted company which were purchased in same year - Assessing Officer disallowed said claim of short-term capital loss by treating it as bogus and not genuine - Facts revealed that such trading transactions of purchase and sale of shares had not been effected, for commercial purpose but to create artificial loss, with a view to reduce tax liability - Transactions of shares were not governed by market factors prevalent at relevant time in such trade, but same were product of design and mutual understanding on part of assessee -Further, shares were related to unlisted company - Whether Assessing Officer was right in holding that assessee resorted to a preconceived scheme to procure short-term capital loss for purpose of neutr....
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....as to get benefit of setting it off in future and entire loss was nothing but an arranged book loss - I Commissioner (Appeals) upheld impugned order holding that assessee failed to establish its bona fides in respect of said transactions - Whether decision of assessee-company to sell its total holding to five group companies was against all human probabilities and commercial consideration which otherwise any prudent businessman would not have taken in normal course of business - Held, yes - Whether transactions effected by assessee-company were not bona fide commercial transactions but were sham, bogus, unreal, make-believe, collusive and artificial with a mala fide intention to acquire benefit for tax I purposes - Held, yes - Whether, therefore, action of Assessing Officer, which had been confirmed by Commissioner (Appeals), in disallowing loss claimed by assessee-company, was justified and in order- Held, yes. (xii) The AO also observed that it is ascertained from DCIT, Investigation, Unit 1(1) wherein they have concluded that the transactions with El Dorando Pvt. Limited with Vitale Bio Science Pvt. Limited are not genuine. Even director of Vitale Bio Science Limited, Prat....
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....nsactions is not correct. He has further stated that on the same date the assessee has made 4 transactions in the bonds but the A.O. has accepted the profit of 3 transactions however has rejected the loss in one transaction. He has contended that there is no prohibition in law for off market transactions. He has also made reference of various pages of paper book. He has stated that as per page no. 36 of paper book in the summon issued to the assessee the A.O. has called mainly details of documents which were submitted by the assessee vide letter dated 22.02.2016 as per page n. 37 of the paper book. He has also referred the page no. 43 of the paper book stating the AO has not made any reference of the statement of Mr. Pratik R. Shah. He has further submitted that as per page no. 50 of the paper book in the show cause notice dated 14/03/2016 the AO has not raised any issue pertaining to the summon issued and thereafter completed the assessment. He contended that from these facts it is clear that the summons were issued to obtain documents and not for the purpose of any third party cross examination. All the required documents were placed in the record. He contended that the name of....
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....ing aggrieved with the impugned appellate order, the appellant has preferred the present appeal before the Hon'ble Tribunal for getting due justice while deciding the appeal of the appellant. 1. Regarding disallowance of loss of trading in bonds of Rs. 4,57,29,090/- for A.Y. 2013-14 & Rs. 3,62,95,000/-for A.Y. 2014-15(Ground no. 1). 1.1 During the course of assessment proceedings for the year under consideration, the A.O. noticed that the appellant has earned profit on sale of plot of land amounting to Rs. 4,60,34,650/- & Rs. 3,30,80,000/- respectively. He also noticed that in the purchase and sales of securities account, the appellant has shown net loss of Rs. 4,57,29,090/- in A.Y. 2013-14. As appended in Table-A at para 3.2 of the assessment order, out of four transactions of trading in securities, the appellant has earned profit of Rs. 10,20,910/- in three transactions and he incurred gross loss of Rs. 4,67,50,000/- in the rest transaction. Similarly, in A.Y. 2014-15 the assessee has shown loss of Rs. 3,62,95,000/- in the security trading. 1.2 The A.O. has disallowed the appellant's claim of business loss in trading in securities holding the same as non-genuine, re....
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.... and in the alternate it could be subject matter of SEBI regulations but certainly will have no impact on the income or loss disclosed in audited accounts for the purpose of Income tax Act as the assessment has to be framed as per the provisions of the Act and not otherwise. Further, the CIT(A) has in fact, considered such income as allowable set of against the loss in A.Y. 2013-14 as noted at the end of para 5 of the appellate order; besides accepted as such by the A.O. in earlier assessment years in the assessment order passed u/s. 143(3) of the Act for A.Ys. 2008-09 & 2009-10. (iii) Reasoning of the A.O. That the assessee failed to prove business expediency. Submission of the appellant in rebuttal: The observation of the A.O. is a casual in nature for the reason that as is settled in law by catena of judicial pronouncement that for the business expediency, it is the assessee who is the best judge to take a prudent decision at a particular point of time and it is not left to the A.O. to decide the same by sitting in the arm chair of the assessee. during the course of assessment proceedings the appellant has submitted all the material details of transactions entered in....
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....l-Dorado Biotech (P) Ltd., the transaction of El-Dorado Biotech (P) Ltd. with M/s. Vitale Bioscience (P) Ltd. are not genuine as ascertained from DDI(Inv.). Submission of the appellant in rebuttal: It is submitted that the appellant has purchased Bonds/Securities from Fortune Gilts Pvt. Ltd. and sold to M/s. Vitale Bioscience (P) Ltd. Both are independent entities separately assessed to tax bearing valid PAN as noted by A.O. at para 3.3 of the assessment order of A.Y. 2013-14. Similarly, PAN of all the connected persons are also noted in the said paragraph. They are in no way related parties to the appellant or the appellant has no interest in any of the companies mentioned above. None of the parties have been examined by the A.O. for enquiring genuineness of transactions before jumping into conclusion that the transactions of El-Dorado Biotech (P) Ltd. with M/s. Vitale Bioscience (P) Ltd. are not genuine, simply drawing so called support from DDI(Inv.). (vi) Reasoning of the A.O. That Vitale Biotech Ltd. has been held as one of the accommodation entry provider, as emerging from statement of one Shri Pratik R. Shah Director of Vitale Bioscience Ltd. Submission of the ap....
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....differential in the said bond transactions, with a view to reducing valid tax liability relying upon judgment of Hon'ble Apex court in the case of Mcdowell and Co. Ltd. Vs. Commercial Tax Officer [154 ITR 148 (SC)] Submission of the appellant in rebuttal: (a) It is submitted that the remark of the A.O. is misconceived in coming to the conclusion that any transaction in which loss is incurred all that transactions are not genuine relying upon decision in the case of Mcdowell and co. Ltd. The A.O. has ignored/overlooked the material facts placed on record that all the transactions have been routed through Demat Account and all the payments have been made throughbanking channels and accepted by A.O. (b) It is an uncontroverted, undisputed & accepted fact by the A.O. that Copies of deal confirmations for purchase and sales of securities are filed before the A.O. vide appellant's submission dated 11/01/2016 & letter dated 02/12/2016 respectively for both the A.Ys. Further, transactions are settled through Demat Account and accounts are settled by on-line transfer of funds through net banking. (c) Vide para-8(ix & x) of the impugned order, the A.O. has cited few case la....
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....ham as a legitimate and acceptable tax event. These terms have somewhat ethical and casuistical connections and are the elective text for differentiating tax planning from abusing tax avoidance. To appreciate the concept of abusive tax avoidance, it would be appropriate to first delineate with precision the expressions 'tax mitigation' and 'tax evasion' as their boundaries and confines would enable us to draw lines amongst the four corners. The term "tax mitigation" is simple, intelligible and unequivocal. It is positive term and refers to the assessee taking benefit or advantage of a provision which the tax code intends and wants to confirm. Deduction under Chapter VI-A, exemptions under Section 10A, 10AA, 10B etc. of the Act are all provisions relating to tax mitigation. If an assessee takes benefit or advantage by complying with the stipulated conditions therein to reduced his tax liability, it would be a case of tax mitigation. The test, if ardently applied, would contradict and would be irreconcilable with tax payers' right to arrange his affairs within the confines of law, which is prohibited or barred. Naturally, the dividing line between acceptable a....
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.... the observation of the A.O. that there was non-compliance of the referred summons is wholly incorrect. Without prejudice to this it is stated that the terms of reference has been altogether different one and even for alleged noncompliance of the summons, the A.O. has neither issued any show cause notice nor imposed penalty u/s. 272A(l)(c) of the Act. With regard to A.O/s observation at para 6 of A.Y. 2014-15, a summons u/s. 131 was issued on 11/11/2016 to remain present in his office on 18/11/2016, it is stated that as may be verified from the copy of order sheet (PBP 57), there is no such reference of issuance of so-called summons on referred date. Without prejudice to the above in response to RTI application filed by the appellant the A.O. has provided a photo stat copy of alleged summons dated 11/11/2016.(PBP 71). However, the date of service and mode of service is not proved. Further, in the said so-called summons, the details with regard to sale/purchase of Bond were only called for. In fact the relevant details were already submitted under appellant's letter dated 02/12/2016 (PBP 23-24). In any case, there is no such default on the part of the appellant for complying....
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....ons of purchase and sale of securities, without rejecting books of accounts of the appellant by invoking provisions of section u/s. 145(3) of the Act, as a rule of thumb and wholly ignoring/overlooking written as well as oral submissions of the appellant in this regard. 1.5 Finding of the Id. CIT(A) being perverse having been recorded, without appellant's submissions being vetted in proper perspective: During the course of appellant proceedings the appellant has submitted a fairly detailed written submissions dated 04/08/2017,(PBP 63) & (PBP 88) respectively duly indexed paper book. The submission of the appellant having been reproduced at para 4.2 of the appellate order, for the sake of brevity the same is not repeated here. However, it is submitted that the Ld. CIT(A) has sustained the disallowance made by the A.O., merely agreeing with the views of the A.O.,' without appellant's submissions being vetted in proper perspective, giving reasons, briefly stated as follows (without repeating the applicable text narrated above): (i) Reason recorded by Ld. CIT(A): That in all the cases transactions are settled on same day and the purchase party in first two cases bec....
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....essed to tax bearing 'PAN AAACF7284Q and AACCV2768D respectively. They are neither related to the appellant nor the appellant is supposed to know as to their income earning activities. (iii) Reason recorded by Ld. CIT(A): That within a friction of minutes funds are moved from one account to another account which suggest that the transaction are not of purchase and sale but claimed to have been made to obtain losses. Submission of the appellant in rebuttal: As contended by the appellant before the A.O. as well as CIT(A) that in similar nature of transactions, appellant has earned profit also and even if the A.O. is making disallowance of loss in "off market transactions", then he ought to have disregarded the profit also in similar transactions. The Ld. CIT(A) has held that the profit earned by the assessee in such transactions should be given set off against loss incurred in one transaction. This goes to show that the Department has accepted off market transactions as genuine and valid where appellant has earned profit. There is no allegation that the delivery and payment in regard to transactions are not genuine. Hence, the observation of the Ld. CIT(A) is contrary to ....
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....1 dated 11/02/2016 was issued to the assessee requiring his presence on 23/02/2016 which remained to be complied with, as alleged. In this connection it is stated that as may be perused from the referred summons (PBP 36) the A.O. had called for the following through the referred summons: Books of account/documents to be produced . 1. Copies of all bank accounts statements. 2. Copies of all Demat A/c along with copies of slips issued to depository allowing to transfer the bonds from your account to the buyers a/cs. (b) In response to the above, the assessee has already filed a compliance letter dated 22/02/2016 (PBP 37) whereby the appellant has submitted requisite details. Therefore, the observation of the A.O. that there was non-compliance of the referred summons is wholly incorrect. Without prejudice to this it is stated that the terms of reference has been altogether different one and even for alleged noncompliance of the summons, the A.O. has neither issued any show cause notice nor imposed penalty u/s. 272A(l)(c) of the Act. (c) As stated in para-8(vii) of the impugned Assessment Order, the proceedings in the case of the assessee have bearing upon the intimation re....
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....on. In nutshell, the Ld. CIT(A)'s observation on depriving the appellant of his right of cross examination, is baseless. (vi) Reason recorded by Ld. CIT(A): That the appellant has failed to give justifiable reason for incurring looses and trading has not been carried out at prevailing market rate, the A.O. is bound to disallow such loss when it is artificial losses. Submission of the appellant in rebuttal: It is submitted that when in the same nature of transactions in rest of 3 transactions, the Ld.CIT(A) has accepted them being genuine which showed profit earned by the appellant, the Ld.CIT(A) is not justified in drawing an adverse inference in regard to transaction of incurring loss. Such inconsistency is impermissible for the reason that the revenue department cannot apply pick and choose method to consider particular transaction as genuine or non-genuine, when they are happened and effected in the same manner. (vii) Reason recorded by Ld. CIT(A): That A.O. is correct in observing that appellant has just performed touch and go transactions without any commercial expediency, referring to SEBI circular. Submission of the appellant in rebuttal: As submitted in ....
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....ant has entered into transaction to reduce taxable income. Submission of the appellant in rebuttal: As submitted in foregoing, the A.O. has not made any report of D.I. (Inv.) as part of record nor a copy is provided to the appellant. Similarly, neither a copy of statement of Shri Pratik R. Shah is provided to the appellant nor any cross examination is afforded by the A.O./Ld.CIT(A). Further, following vital facts emerge from para-S(vii) of impugned assessment order, referable to statement of Shri Pratik R. Shah: (a) The date of so-called statement is nowhere mentioned. (b) There is nothing stated as to in whose case and in the course of which proceedings and under which section of the IT Act, alleged statement was recorded. (c) In reply to question no. 11, said Shri Pratik R. Shah has confessed that he agreed and provided the accommodation entry to AFCSL. The appellant is no way connected with AFCSL group of companies. (d) In replying to question no. 14 referring to statement of one Shri Rakesh B. Patel, Shri Pratik Shah has agreed with him with reference to Shri Rakesh Patel's statement dated 23/11/2011. The so called information through statement dated 23/11/201....
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.... have gone through the relevant record and considered the rival contentions. The assessee is an individual engaged in the business in trading of securities, commodity trading and real estate. The assessee maintains regular books of account on mercantile basis which are got audited through Charted Accountants as required u/s. 44AB of the Act. During the course of assessment proceedings, the A.O. has noticed that assessee had sold a land for Rs. 6, 19,20,000/- which was purchased at Rs. 15,88,5,350/-. The A.O. noticed that the assessee has earned profit on sale of plot of land amounting to Rs. 4,60,34,650/- & he also noticed that in the purchase and sales of bonds the assessee has shown net loss of Rs. 4,57,29,090/- . He has observed that the assessee had sold the 9% bond of Bank of Maharashtra 2022 which has been purchased at a full value and sold it in off market at a price lower than the price not constant with the price prevailing at the NSE and the assessee has failed to prove business expediency in respect of immediate sale of bonds as well as sale price of bonds. Thus the claim of the loss of the assessee was not allowed . The A.O. was of the view that trading transactions in ....
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....ut the A.O. has not provided any copy of any material or statement which can demonstrate that accommodating entries were also provided in the case of the assessee as the referred statement pointed out providing of entries in respect of Amarpali Group. The A.O. has not provided any such copy of statement or cross-examination to prove that the transactions carried out in the case of the assessee were not genuine. In the case of the assessee, the A.O. has not proved that documents were not genuine. 19. None of the parties has been examined with respect to genuineness of transactions. It was also submitted by the ld. counsel that trade in such bonds take place with reference to period of bonds credit rating of the issues etc and one may entered in to transactions at agreed price that of purchase and sale. It was also submitted that in the referred statement of Shri Pratik R. Shah, there was no any reference to the assessee to show that the bogus entries were provided to the assessee. It was also submitted by the ld. counsel that in compliance to summon u/s. 131 dated 11/02/2016, the assessee has already submitted all the requisite details vide letter dated 22/02/2016. Thereafter, ther....