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2017 (9) TMI 1773
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.... short term capital loss of Rs. 16,52,414/- on sale of shares. It was noticed that the assessee has purchased and sold the shares through Mukesh Choksi group of companies, who were subjected to search and who had admitted that they were providing only accommodation bills. Hence the AO reopened the assessment of the year under consideration and disallowed the claim of short term capital loss, referred above. 3. In appellate proceedings before Ld CIT(A), the assessee submitted its case as under: 1. During the year under consideration assessee has invested in shares and sold the shares, details of which are given as below. During the course of assessment proceedings, copies of all the bills and contract notes relating to t....
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....t of Mahasagar Securities Pvt. Ltd. group share scam received by him. This information is provided in the assessment order under 143(3) r.w.s. 147 dt.23-3- 2015 on page 2 at para 4.2. Further the AO has stated that the registration of M/s Alliance Intermediaries & Network Pvt. Ltd as sub-broker of NSE has been cancelled by Securities & Exchange Board of India (SEBI) on 19-2-2004. As against these, we would like to bring to your kind attention that the learned AO has not accorded any opportunity to the assessee to crossexamine Shri Mukesh M. Chokshi who is alleged to be running the share scam. Also, Shri Mukesh M. Chokshi has not specifically mentioned name of the assessee anywhere in his statement that the transactions of assessee are false....
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....ot supported by any concrete evidence...... Further the appellant has stated that in case of KatariaKetanIshwarlal (ITA/4304/Mum/2007) and also in the case of Mukesh R. Marolia (ITA no.1201/Mum/2005), Hon'ble ITAT Mumbai has considered these cases and decided the matter in favour of the assessee. The findings in the case of Mukesh R. Marolia has been affirmed by the Hon'ble Bombay High Court as well." The Ld CIT(A) was not convinced with the submissions of the assessee and hence confirmed the disallowance of short term capital loss. Hence the assessee has filed this appeal before the Tribunal. 4. The Ld A.R submitted that the Mukesh Choksi Group was operating into the shares of penny stocks like Talent infoway, Buniad....
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....ined is based on plain statements without any corroborative and supporting evidence and more particularly in relation to the transactions of the assessee. Fifthly, the cancellation of the registration of MIs. Alliance Intermediateries & Network Pvt. Ltd. does not prohibit the said sub-broker from carrying on its business in the off- market mode. Sixthly, the CIT(A) has failed to appreciate that in order to save their skin or for any reason the said companies declared marginal profit from the share trading transactions would not make the said share trading transactions as non-genuine or bogus. Seventhly, no evidence is brought on record that in respect of the transactions of the assessee, MIs. Alliance Intermediateries & Network Pvt. Ltd. de....
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....contrary, the Ld D.R placed strong reliance on the order passed by Ld CIT(A). 6. Having heard rival submissions, I am of the view that there is merit in the contentions of the assessee. The assessee has purchased shares, which were not considered to be shares being operated by Mukesh Choksi group. The purchased shares have entered into the depository account of the assessee, which fact proves the genuineness of purchases. Further the payment for purchases has been given by way of cheque and hence the genuineness of payments also stand proved. The delivery of shares on their sale, has been made from the depository account, meaning thereby, the genuineness of sales also stand proved. The sale consideration has been received through banking....