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2022 (6) TMI 1198

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....03/2015 by the ld. Income Tax Officer, Ward 17 (1)(4), Mumbai (hereinafter referred to as ld. AO). 2. Though the assessee has raised several grounds, the only effective issue involved in the impugned appeal is as to whether the ld. CIT(A) was justified in confirming the disallowance of Rs.7,89,745/- on account of alleged purchase of shares through M/s. Alliance Intermediates and Network Private Limited and alleged related commission expenditure of Rs.39,487/- in the facts and circumstances of the instant case. 3. We have heard rival submissions and perused the materials available on record. We find that a search and seizure action u/s.132 of the Act was undertaken in the case of M/s. Mahasagar Securities Pvt. Ltd., (now known as M/s. Alag....

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....oceedings, statement of Shri Mukesh Choksi, key person of M/s Mahasagar group of cases is recorded wherein he has stated in his sworn-in statement and admitted that he and his group were engaged in fraudulent billing activities and in giving accommodation entries in order to enable the clients to declare Speculation profit/loss, Short Term Capital Gain, Long Term Capital Gain, profit/loss on account of Commodity, Trading, introduce Share Applicable Money, or introduce money in the form of Gifts. 3. From the information, it is also seen that Mr. Choksi himself has stated and admitted that he was only involved in giving accommodation entries. He also perused all the data before giving such statement. In the latest sworn statement dated 16.0....

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....of M/s. Mahasagar Group of Companies that his various companies had given bogus entries. Thus, by taking a bogus entry, the assessee has introduced his unaccounted money through the above fictitious transaction. In view of the aforesaid facts, I have reason to believe that Rs. 7,89.745/-has escaped assessment within the meaning of section 147 of the I.T. Act, 1961. " 3.1. The assessee during the course of re-assessment proceedings furnished the transactions carried out through Alliance Intermediates and Network Pvt. Ltd., which is a registered share broker of NSE and with whom the assessee is having current account transactions as the assessee had indulged in future and options transactions with the said registered broker and had not eng....

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....f shares through the said broker. It was also submitted that assessee had neither claimed the said speculation loss incurred of Rs.33,83,516/- with Alliance Intermediates and Network Pvt. Ltd., for the relevant period or in any subsequent assessment years. The assessee submitted the copy of ITR acknowledgements together with the computation of total income of subsequent years , in support of its contentions. It was also submitted that the ld. AO erred in stating in the assessment order that the short term capital loss of Rs.23,593/- reflected in the computation of income is incurred out of the transactions carried out through Alliance Intermediates and Network Pvt. Ltd. It was clarified by the assessee that the said loss was incurred on tra....

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....ied that the same represents futures and options transactions only which are in the nature of speculative transactions and not purchase of shares made through Alliance Intermediates and Network Pvt. Ltd. The assessee even reconciled each and every transaction mentioned thereon before the ld. AO in the remand proceedings. The ld. AO however, reiterated his old submissions made in the assessment order in his remand report also. A copy of the remand report is enclosed in page 97 of the paper book. The ld. CIT(A) by placing reliance on the said remand report, ignored all the contentions of the assessee and confirmed the action of the ld. AO. 3.5. Before us, the ld. AR drew our attention to pages 77-78 of the paper book containing submissions m....

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....the documents available on record, it is very clear that purchase and sale of share transactions were carried out by the assessee through the registered brokers i.e. Alankit Assignments and RBK Share Broking and Speculative transactions were carried out through the registered broker i.e. Alliance Intermediates and Network Pvt. Ltd. The assessee had incurred short term capital loss and earned long term capital gains in respect of purchase and sale of shares carried out through Alankit Assignments and RBK share broking which has been duly disclosed in the return of income. We find that the assessee had only incurred speculation loss of Rs.33,83,516/- in respect of future and option transactions carried out through Alliance Intermediates and N....