2019 (10) TMI 906

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....:- In this case information was received from DDIT(Inv) Unit 1(4), Mumbai that the search action in the case of Mahasagar Securities Pvt. Ltd. (now Alag Securities Pvt Ltd) was conducted on 25.11.2009, During the course of search it was revealed that the Mahasagar Securities Pvt. Ltd. and its related group of 34 odd companies (the prominent on includes M/s Goldstar Finvest Pvt. Ltd. Run by Mukesh Chokshi were engaged in fraudulent billing activities and in the business of providing bogus speculation profit. The assessee had procured such bill from Mahasagar Securities Pvt. Ltd. It was also revealed during search operation that Sri Mukesh Chokshi, a chartered accountant by profession had floated some 34 companies from his office at Shree S....

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....'ble Apex Court in the case of Rajesh Jhaveri Stock Brokers Private Ltd. (2007) 161 taxman 316 (SC) has held that intimation under section 143(1) is not an assessment order. Hence it cannot be said that there was any application of mind by the assessing officer in the original assessment. Moreover, at the time of reopening the escapement of income need not be conclusively proved. In this view of the matter in our considered opinion the reopening is valid. In this regard we also support from honourable jurisdictional High Court decision in the case of Export Credit Guarantee Corporation of India Ltd.(350 ITR 655). 8. In this case honourable jurisdictional High Court has expounded that even the tangible material for reopening need not c....

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....there is an enormous jump in no time of the share price of little-known company. The departmental examination and investigation in the case of Mukesh Choksi duly corroborate the transaction as a sham transaction. This is a classic case of penny stock transaction. Such conversion of unaccounted money through dubious method is not permitted on the touchstone of Hon'ble Supreme Court decision in the case of CIT Vs. Durga Prasad More 82 ITR 540, and Sumati Dayal Vs. CIT (1995 SCC Supl. (2) 453 vide order dated 28.3.1995). Hon'ble Apex Court had occasion to dwell upon such dubious transaction through manipulation of stock prices in the case of Securities and Exchange Board of India Vs. Rakhi Trading Pvt. Ltd. (Civil Appeal Nos. 3174-3177....