Income Tax Appellate Tribunal - Mumbai
Smt. Amina I. Rangari, Mumbai vs Department Of Income Tax on 4 September, 2015
आयकर अपीलीय अिधकरण, 'ए' खंडपीठ मुबं ई INCOME TAX APPELLATE TRIBUNAL,MUMBAI "A"BENCH सव ी राजे , लेखा सद य एवं पाथसारथी चौधरी, याियक सद य Before S/Sh. Rajendra,Accountant Member & Parthasarathy Choudhury,Judicial Member अपील सं/.ITA No.7543/Mum/2011,िनधारण वष/Assessment Year-2003-04 Income tax Officer-17(2)(4) Smt. Amina I. Rangari nd 2 floor, Room No.220 Vs Building No.2 Room No.10 Piramal Chambers, Lalbaug, Parel Kidwai Nagar, Wadala Mumbai. R.A. Kidwai Road Mumbai-400 031.
PAN: AAAPR 9083 C
(अपीलाथ /Appellant) ( यथ / Respondent)
िनधा रती ओर से/Assessee by : Dr. P. Daniel & Mr. S.M. Makhija
राज व क ओर से/ Revenue by : Shri S.R. Kirtane
सुनवाई क तारीख/ Date of Hearing :02-09-2015
घोषणा क तारीख / Date of Pronouncement : 04-09-2015
आयकर अिधिनयम,1961 क धारा 254(1)के अ तगत आदे श
Order u/s.254(1)of the Inco me-tax Act,1961(Act)
लेखा सद य राजे के अनुसार PER RAJENDRA, AM-
Challenging the order dt.19.8.2011of CIT(A)-29, Mumbai, the Assessing Officer(AO), has raised following Grounds of Appeal:
"1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the relief to beneficiary of dubious transaction i.e. assessee's on the base fact that ITAT, Mumbai has quantified income of M/s. Goldstar Finvest Pvt. Ltd. for A.Y. 2002- 03 at 0.15% of various dubious transaction as an entry provider was examined in the case of M/s. Goldstar (Pvt.) Ltd.
2. "On the facts and in the circumstances of the case and in law, the Ld. CIT(AO has erred in not applying Rule 46A of the IT Rules 1962 for cross examine of the Shri Mukesh Chokshi
3. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in considering income of Rs.27,33,262j - fall under the head Capital gain instead of income fall u/s. 68 of the IT Act, 1961
4. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in considering the deduction u/s. 54F as allowable.
5. The appellant prays that the order the CIT(A) on the above grounds be reversed and that of the Assessing Officer be restored.
6. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary."
Brief facts:
2.An action u/s. 132 of the Act was carried out in the case of Mahasagar Securities Pvt. Ltd. on 25.11.2009 based on the information that the group companies, including M/s. Goldstar Finvest Pvt. Ltd. (GFPL)were engaged in providing bogus bills of transactions in shares and securities, that the directors of the companies were engaged in fraudulent billing activities and in the 1 ITA/7543/M/11-Amina R business of providing non genuine speculation profit/loss, long term and short term capital gain/ loss for trading in shares and securities as well as in commodities.During the course of search from the seized completed data a list of clients/beneficiaries who had taken entries from above companies was extracted.The investigation wing reported that the transactions entered into by the beneficiaries with the group concerns was bogus and the same representing the undisclosed income of the beneficiaries for the AY.2003-04. The assessee was reported to be one of the beneficiaries appearing in the list prepared by the investigation wing.It was found by the AO that assessee had not filed the return of income though she had been allotted PAN on 19.12.2002. A letter was issued to the assessee to verify whether she had filed any return of income for the year under consideration or not. As the assessee stated that she had not filed return of income for 2003-04, so the AO issued notice u/s. 148 of the Act on 30.3.2010.In response to notice,she filed her return on 10.8.2010 declaring total income at Rs.7.04 lacs.The AO completed the assessment on 15.12.2010 u/s. 143(3) r.w.s 147 of the Act,determining the income of the assessee at Rs.27. 69 lacs.
3.Effective ground of appeal is about allowing relief to the assessee about the transactions entered into with Mahasagar Securities group.During the assessment proceedings the Assessing Officer made an addition of Rs.27,33,262/-u/s. 68 of the Act relating to sale of shares in following four scrips:
Name of scrip Sale consideration(Rs.) Buniyad chemicals Ltd. 6.28 lacs NE Electronics Ltd. 7.79 lacs Prime Capital markets Ltd. 5.38 lacs Manta online 7.86 lacs
The assessee claimed that she had earned LTCG as she was holding the shares for more than one year.The AO issued a show cause notice to her stating that the so called sale of scrips by the her was not genuine.The AO held that officers of the investigation wing had examined the director of GFPL-Mukesh Choksi and had found that the company had not done business through broker or stock exchange,that the delivery of the shares had not been made within 48 hrs of the contract, that Mukesh Choksi had admitted that GFPL was engaged in the business of providing accommodation-entries,that GFPL had admitted in the appeal proceedings,for the year 2002-03, before the Tribunal of providing entries,that the Tribunal had accepted the company to be an entry provider and had order for computing its income at 0.15% of total entries, that the shares sold by GFPL had not been immediately transferred to assessee's demat account, that they had come to assessee's demat account only a few days before the sale, that Buniyad Chemicals was controlled by Mukesh Choksi Group, that the assessee had purchased the shares of Buniyad Chemicals and NE Electronics at Rs.0.55 and at Rs.2.05 per share respectively, that the sale had been shown at range of Rs.75 to Rs.79 in the case of NEE and @ Rs.62.50 to Rs.74/- in case of Buniyad Chemicals Ltd., that the bills were forged in order to generate LTCG, that the price rise showed the fraudulent nature of transactions.The AO did not make any comment about the remaining two scrips but added the capital gains arising from those scrips to the total income of the assessee.Finally,the AO taxed the sale proceeds of all the above referred four scrips,as income from unexplained sources u/s. 68 of the Act.
4.Aggrieved by the order of the AO the assessee preferred an appeal before the First Appellate Authority (FAA) and made elaborate submissions before him. After considering the submissions 2 ITA/7543/M/11-Amina R of the assessee and the assessment order the FAA held that the assessee had purchased 9000 shares of Buniyad chemicals Ltd. on 31.6.2001 and sold them on 3.10.2002, at the folio nos. and the copies of share certificates were submitted ,that the seal of the company proved the transfer of the shares,that there was no specific statement by Mukesh Choksi that the transaction in question was forged or cooked up,that the payment to the broker had been made by book adjustments from STCG earned in AY 2002-03, that the assessee had filed her return and had claimed that the transactions was off market, that there was no adverse evidence to prove that delivery of shares was not taken on 30th June, 2001,that the Tribunal had quantified income of GFPL for AY 2002-03 @ 0.15% of various dubious transactions, that the Tribunal had taken transfer/clearing entries of three bank accounts of GFPL namely Bank of Baroda account, Citi bank Account and Co-operative Bank of Ahmedabad Account, that the transactions undertaken by the assessee related to Kurur vyasya Bank Ltd., Fort Mumbai, that there was enough evidence to conclude that the shares were held by the assessee since 30th June 2001, that the assessee had not been given a chance of cross examining Mukesh Choksi, that at the point of sale the price of share was quoted at the price sold by the assessee, that the fluctuation in price could not be a reason to hold that the transactions were not genuine, that the sale price had been received by cheques.The FAA further held that similar were the facts for the transactions of the scrips NE Electronics Ltd. He further observed that the assessee had purchased 5000 and 7500 shares of Prime Capital and Mantra Online respectively on 9.8.2001 and 28.6.2001 respectively that those shares were sold 30.9.2001,that the transactions were through stock exchange,that the transactions were also not through GFPL, that no further adverse evidence had been placed on record by the AO,that the shares had been demated and sold, that the sale proceeds were received by cheques,that the sale proceeds could not be taxed as income from other sources or as unexplained credit u/s. 68 of the Act
5.Before us,the Departmental Representative(DR)supported the order of the AO and stated that the investigation wing of the department had found that the assessee had entered into transactions with the Mukesh Choksi group who was providing accommodation entries.Authorised Representative (AR)argued that the assessee had proved purchase and sale of shares with documentary evidence,that the shares were held for a period of more than one year,that two of the scrips were sold stock exchange.He relied upon the case of
6.We have heard the rival submissions and perused the material on record.We find that the AO had made addition to the income of the assessee of Rs.27.32 lakhs u/s.68 of the Act on the basis of the report of the investigation wing of the department,that the officers of the wing had carried out a search and seizure action in the case of Mukesh Choksi group concerns who were engaged in the business of providing accommodation entries,that the was informed that the assessee was beneficiary of the entries provided by one of the Mukesh Choksi group concern i.e.GFPL,that the had claimed LTCG for four scrips,that two out of four were sold on stock exchange and remaining two were sold off market,that the FAA had given categorical finding of fact that the assessee was holding the shares for more than one year,that folio no and copies of certificates were made available to the AO,that the stamp of the company proved that shares were actually transferred in the name of the assessee,that sale of the shares and receiving the sale proceeds through banking channels is not in doubt,that Mukesh Choksi had not alleged that the transactions in question were tainted,that the assessee was not allowed cross examination of 3 ITA/7543/M/11-Amina R Mukesh Choksi with regard to the transactions entered in to by her.Considering the above facts, we are of the opinion that the FAA was justified in reversing the order of the AO.The information received by the AO was a good starting point for further investigation but was not a reliable evidence to make addition u/s.68 of the Act.The assessee had discharged the burden of proving the genuineness of transactions and therefore confirming the order of the FAA,we decide effective ground of appeal against the AO.Cases relied upon by the AR also support the view taken by the FAA.
As a result,appeal filed by the AO stands dismissed.
फलतः िनधा रती अिघकारी ारा दािखल क गई अपील नामंजूर क जाती है.
Order pronounced in the open court on 4th September,2015.
आदेश क घोषणा खुले यायालय म दनांक 4th िसतंबर,2015 को क गई ।
Sd/- Sd/-
(पाथसारथी चौधरी / Parthasarathy Choudhury) (राजे / RAJENDRA)
याियक सद य / JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER
मुंबई/Mumbai, दनांक/Date: 04.09.2015
व.िन.स.Jv.Sr.PS.
आदेश क ितिलिप अ िे षत/Copy of the Order forwarded to :
1.Appellant /अपीलाथ 2. Respondent / यथ
3.The concerned CIT(A)/संब अपीलीय आयकर आयु , 4.The concerned CIT /संब आयकर आयु
5.DR A Bench, ITAT, Mumbai /िवभागीय ितिनिध, ए खंडपीठ,आ.अ. याया.मुंबई
6.Guard File/गाड फाईल स यािपत ित //True Copy// आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार Dy./Asst. Registrar आयकर अपीलीय अिधकरण, मुंबई /ITAT, Mumbai.
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