MANJARI P. SHAH, MUMBAI V. ASST CIT RG 23(2), MUMBAI

ITA 1078/MUM/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8228 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 13-09-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 14-02-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS N V NADKARNI
• Assessee Lawyers: MILIND V SAHASRABUDHE
• Keywords: Additional evidence
• Section: 143(3); 142(1); 6; 154

Judgement Text

I IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO.1078/ MUM/2012 ( / ASSESSMENT YEAR : 2008-09) MANJARI P. SHAH, 302, ABICH APARTMENTS, SAROJINI NAIDU ROAD, MULUND (WEST), MUMBAI 400 080. / V. ASST. COMMISSIONER OF INCOME TAX; RANGE 23(2), C-10, PRATYAKSHA KAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA EAST, MUMBAI 400 051. ./ PAN : ANQPS5900A ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : MR. MILIND V. SAHASRABUDHE REVENUE BY : MRS. N.V. NADKARNI, DR / DATE OF HEARING : 24-01-2017 / DATE OF PRONOUNCEMENT : 22-02-2017 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE, BEING ITA NO. 1078/MUM/2012, IS DIRECTED AGAINST THE APPELLATE ORDER DATED 26-12-20 11 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 33, MUMBAI (H EREINAFTER CALLED THE CIT(A)), FOR THE ASSESSMENT YEAR 2008-09, THE APPE LLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARISING FROM THE ASSESSMENT ORDE R DATED 15 TH DECEMBER, 2010 PASSED BY LEARNED ASSESSING OFFICER (HEREINAFT ER CALLED THE AO ) U/S 143(3) OF THE INCOME-TAX ACT,1961 (HEREINAFTER CALL ED THE ACT). ITA 1078/MUM/2012 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL FILED WITH THE INCOME-TAX APPELLATE TRIBUNAL, MUMBA I (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- BEING AGGRIEVED BY THE ORDER OF THE LEARNED COMMIS SIONER OF INCOME TAX (APPEALS) 33, MUMBAI [HEREINAFTER REFERRED TO AS LD. CIT (A)], THE APPELLANTS SUBMIT THE FOLLOWING GROUNDS FOR YOUR SYMP ATHETIC CONSIDERATION; WHICH IT IS PRAYED MAY BE CONSIDERED WITHOUT PREJUDICE TO EACH OTHER. L. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE TH E LD. ASSISTANT COMMISSIONER OF INCOME TAX ERRED IN ADDING IN ADDIN G IN INCOME 2% OF ALLEGED UNEXPLAINED ENTRIES, IN LIGHT OF THE FACT THAT S TT CERTIFICATE ISSUED BY STOCK EXCHANGE ITSELF SUPPORTS STAND OF THE A PPELLANTS THAT THE RELEVANT TRANSACTIONS, IF ANY, ARE NOT ENTERED INTO BY THE APPELLANTS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF SHARE TRADING. INFORMATION WAS EXTRACT ED BY THE AO THROUGH ANNUAL INFORMATION REPORT THAT THE ASSESSEE HAS ENT ERED INTO SHARE TRANSACTIONS TO THE TUNE OF RS. 20,10,44,369/- THRO UGH BOMBAY STOCK EXCHANGE(BSE) ON VARIOUS DATES. THE ASSESSEE WAS A SKED TO EXPLAIN THE SOURCES OF PURCHASES/SALE OF THESE SHARES THROUGH B ANK ENTRIES. THE ASSESSEE EXPLAINED THE TRANSACTIONS TO A LARGE EXTE NT BUT COULD NOT EXPLAIN MANY TRANSACTIONS. THE ASSESSEE HAD DENIED TO HAVE ENTERED INTO, IN THE FOLLOWING SHARE TRANSACTIONS:- TRANSACTION DATE AMOUNT (RS.) 28.12.2007 26,78,338 27,81,144 15,60,675 14,91,183 72,46,260 27.12.2007 71,20,008 14,47,000 2.1.2008 45,78,280 10,78,010 ITA 1078/MUM/2012 3 21,44,303 4.1.2008 19,97,248 7.1.2008 66,64,353 5,68,134 8.1.2008 36,19,980 39,39,390 10.1.2008 75,40,524 77,26,908 20.2.2008 7,58,640 11.3.2008 11,40,961 7,12,190 TOTAL 7,52,65,347 THE ASSESSEE VIDE HER LETTER DATED 30-11-2010 DENIE D THE ABOVE TRANSACTIONS. THE CONTENTS OF THE LETTER ARE AS UNDER:- DECLARATION I, MRS. MANJIRI P.SHAH, HAVING PAN :ANQPS5900A RESI DING 302, ABICH APTS., SAROJINI NAIDU ROAD, MULUND (W), MUMBAI 400 080, IN MY CAPACITY AS INDIVIDUAL, I HEREBY SOLEMNLY AFFIRM AS UNDER: 1. THE INCOME TAX AUTHORITIES HAVE ISSUED NOTICE UND ER SECTION 143(2) AND SECTION 142(1) OF THE INCOME-TAX ACT, 1961 FOR THE A. Y.2008-09 FOR THE PURPOSE OF SCRUTINY ASSESSMENT. 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD . ASSESSING OFFICER ASKED FOR THE CLARIFICATION AS REGARDS ENTR IES ITS DETAILS' GENERATED IN THE INCOME TAX DATABASE (ITD) DATED 23. 8.2010 CONTAINING 11 PAGES AND 85 ENTRIES. 3. IN RESPONSE TO THE SAID DEMAND FOR CLARIFICATION O F ENTRIES APPEARING IN THE SAID ITS DETAILS. I HAVE SUBMITTED THE CLARIFICATION IN RESPECT OF ALL ENTRIES EXCEPT 18 ENTRIES WHICH TO BE BEST OF MY KNOWLEDGE, ARE NOT MY TRANSACTIONS. THE SAID FACT WAS DULY COMMUNICATED VIDE LETTER DATED 23.8.2010 OF MAY & CO ., CAS MY AUTHORIZED AR. 4. UPON THE SAID INTIMATION AS REGARDS MISMATCH OF 18 ENTRIES, THE LD. ASSESSING OFFICER HAS REPORTEDLY ISSUED LETTER TO BSE LTD AS REGARDS SUCH MISMATCH AND REPLY THEREOF FROM BSE LTD. IS REPOR TEDLY AWAITED. 5. DURING THE COURSE OF PROCEEDINGS, I HAVE AGAIN RE ITERATED THE FACT THAT THE SAID MISMATCH TRANSACTIONS ARE NOT MY TRANSACTIO NS. IN ITA 1078/MUM/2012 4 SUPPORT THEREOF, I HAVE SUBMITTED THE LEDGER COPIES IN RESPECT TO ALL TRANSACTIONS/ DAYWISE AND SCRIPWISE DETAILS OF SHARE TR ADING DURING THE F. Y.2007-08 AS A MATTER OF FURTHER EVIDENCE VIDE LE TTER OF MY AR DATED 23.8.2010. THE PROFIT/LOSS FROM SHARE TRADING IS FUL LY DISCLOSED IN MY INCOME-TAX RETURN. 6. THIS DECLARATION IS FILED WITH THE LD. ASSESSING O FFICER FOR THE PURPOSE OF CLARIFICATION IN RESPECT OF UNMATCHED AIR E NTRIES AS MENTIONED IN PARA 3. SOLEMNLY CONFIRMED AS ABOVE THIS 30TH DAY OF NOVEMBE R, 2010.' THE A.O. IN ORDER TO RECONFIRM THESE TRANSACTIONS T HROUGH BSE WROTE TO BSE , WHEREIN IN RESPONSE THE BSE VIDE LETTER DATED 22.11 .2010 SUBMITTED THAT COMPLETE TRADE DETAILS OF THE ASSESSEE WERE MENTION ED IN ANNEXURE-I FOR ALL THE QUARTERS RESPECTIVELY WHICH WERE SUBMITTED TO A CIT, MUMBAI VIDE LETTERS DATED 18.09.2007, 08.12.2007, 1.2.2008 AND 15.5.200 8. THE BSE ALSO STATED THAT DETAILS OF COPIES OF ACCOUNTS / CERTIFICATE, D ETAILS OF CHEQUES ETC. ARE NOT AVAILABLE WITH BSE AS IT DOES NOT ENTER INTO ANY TR ANSACTION DIRECTLY WITH THE INVESTORS. THE AO OBSERVED THAT THE BSE HAS DIRECTL Y CONFIRMED THE SAID TRANSACTIONS , WHICH THE ASSESSEE IS DENYING OUT-RI GHTLY. THE A.O. DEPUTED WARD INSPECTOR TO VERIFY THE REPORTED TRANSACTIONS WHO CONFIRMED THE TRANSACTIONS AFTER VERIFICATION. THE A.O. OBSERVED THAT IT IS INCUMBENT UPON THE ASSESSEE TO RECONCILE THE TRANSACTIONS WITH BSE AND IT IS NOT FOR THE REVENUE TO RECONCILE THE SAME. THE AO OBSERVED THA T NO ATTEMPT HAS BEEN MADE BY THE ASSESSEE TO RECONCILE THE SAME AND MERE DENIAL BY THE ASSESSEE DOES NOT ABSOLVE THE ASSESSEE FROM HER RESPONSIBILI TY. THE A.O. OBSERVED THAT THE AMOUNTS MENTIONED IN AIR DO NOT INDICATE WHETHE R THE AMOUNTS MENTIONED THEREIN RELATE TO PURCHASE OR SALE OF SHA RES . THE A.O. OBSERVED THAT THE ASSESSEE HAS PURCHASED SHARES OF RS. 24,14 ,51,096/- AND SOLD THE SHARES OF RS. 24,28,98,229/- AS RECORDED IN BOOKS O F ACCOUNTS MAINTAINED BY THE ASSESSEE, THEREBY THE ASSESSEE EARNED PROFIT OF RS. 14,47,132/- WHICH COMES TO A PROFIT RATIO OF 0.59%. THE A.O. BROUGHT TO TAX THE UNRECORDED TRANSACTION OF RS. 7,52,65,347/- BY APPLYING PROFIT RATIO OF 2% ON UNRECORDED ITA 1078/MUM/2012 5 TRANSACTIONS, WHICH COMES TO RS. 15,05,306/- WHICH WAS BROUGHT TO TAX BY THE AO AS INCOME OF THE ASSESSEE VIDE ASSESSMENT OR DER DATED 15.12.2010 PASSED BY THE AO U/S 143(3) OF THE ACT. 4. AGGRIEVED BY THE ASSESSMENT ORDER DATED 15.12.20 10 PASSED BY THE A.O. U/S 143(3) OF THE ACT, THE ASSESSEE FILED FIRST APP EAL BEFORE THE LD. CIT(A) AND MADE THE FOLLOWING SUBMISSIONS :- IT IS HUMBLY SUBMITTED THAT FROM THESE VERY STATEM ENTS IN THE ASSESSMENT ORDER IT IS CLEAR THAT THE VERY BASE FOR ADDITIONS IS VERY VERY VAGUE AND NON VERIFIABLE FROM THE VIEW PO INT OF YOUR APPELLANTS. IT IS HUMBLY SUBMITTED THAT ADDITIONS A RE BASED ON TOTALLY VAGUE FIGURES REPORTED BY STOCK EXCHANGE WH ICH CAN CONTAIN ERRORS. THE FACT THAT AIR INFORMATION GATHE RED CONTAINS MANY ERRORS DUE TO VARIOUS REASONS AS WELL ESTABLIS HED FACT WITH MANY ASSESSMENTS TAKING PLACE WHERE THE APPELLANTS ESTABLISH THE SAID INFORMATION TO BE ERRONEOUS. IN THE INSTAN T CASE YOUR APPELLANTS HAVE BEEN DENIED OPPORTUNITY TO ESTABLIS H THE STATEMENT FILED BY THE STOCK EXCHANGE AS ERRONEOUS BECAUSE STOCK EXCHANGE HAS SIMPLY REFUSED EVEN TO RE-VERIFY THE R ECORDS OR TO GIVE INFORMATION ON TRIAL. IT IS HUMBLY SUBMITTED T HAT THE ALLEGED TRANSACTIONS CANNOT BE WITHOUT MONEY TRIAL AND WOUL D ALSO BE LINKED TO SOME DEMAT ACCOUNT ETC., WHICH INFORMATIO N IF AVAILABLE CAN GO TO PROVE CLAIM OF YOUR APPELLANT T O BE CORRECT. BUT SIMPLE DENIAL ON PART OF STOCK EXCHANGE TO REVE RIFY RECORDS PUTS YOUR APPELLANT IN A SCENE WHERE SHE HAS NO MEA NS TO PROVE HER POSITION BECAUSE THE ADDITION HAS BEEN MADE ON THE BASIS OF TOTALLY VAGUE INFORMATION. ALTHOUGH OUR SUBSEQUENT SUBMISSIONS WILL ESTABLISH CLAIM OF OUR CLIENT TO BE CORRECT; I T IS HUMBLY SUBMITTED THAT FAIRNESS OF ADDITIONS SANS ESTABLISH ING MONEY TRIAL BASED ON SUCH NON VERIFIED STATEMENTS IS UNJUST AND ADDITION NEEDS TO BE SET ASIDE ON THAT GROUND ITSELF. 05. WITHOUT PREJUDICE, INSPITE OF ALL ODDS AGAINST ON EVEN CONCEIVING METHOD TO ESTABLISH CLAIMS OF OUR CLIENT TO BE CORRECT; WE HEREBY SUBMIT THE FOLLOWING IRREFUTABLE EVIDENCE FOR YOUR KIND CONSIDERATION IN THE MATTER. ATTENTION IS INVITED T O SECURITIES TRANSACTION TAX CERTIFICATE ISSUED BY THE STOCK EXC HANGE (EXHIBIT A) TO YOUR APPELLANTS. ADMITTEDLY THIS CERTIFICATE PERTAINS TO ITA 1078/MUM/2012 6 SECURITIES TRANSACTION TAX CHARGES ON ALL THE TRANS ACTIONS ENTERED INTO BY YOUR APPELLANTS IN THE RELEVANT YEA R. 06. WE ALSO SUBMIT HEREWITH THE STATEMENT SHOWING T OTAL OF STT CHARGED AS PER BILLS OF BROKERS (EXHIBIT B), IT MAY BE NOTED THAT TOTAL STT AS PER THIS STATEMENT MATCHES WITH TOTAL OF STT AS PER CERTIFICATE ISSUED BY THE STOCK EXCHANGE. THIS WOUL D IMPLY THAT EVEN AS PER STOCK EXCHANGE THE ONLY TRANSACTIONS TH AT HAVE BEEN ENTERED INTO BY OUR CLIENT ARE THOSE THAT ARE REFLE CTED IN THE BILLS OF BROKER BECAUSE THERE CAN NOT BE ANY TRANSACTION CONDUCTED ON STOCK EXCHANGE WITHOUT LEVY OF STT. 07. THIS ESTABLISHES A FACT THAT THERE IS ERROR IN THE TRANSACTION REPORT AS MAY BE SUBMITTED TO THE INCOME TAX DEPART MENT BY THE STOCK EXCHANGE BECAUSE ADMITTEDLY THERE CAN BE NO E RROR IN STT CHARGING AND PAYMENT BY STOCK EXCHANGE. 08. IT IS HUMBLY SUBMITTED THAT IN LIGHT OF THE SAI D IRREFUTABLE EVIDENCE, THE ADDITION, WHICH IS SOLELY BASED ON TH E PRESUMPTION OF ACCURACY OF STOCK EXCHANGE REPORT WHICH ITSELF I S VERY VAGUE AND WITHOUT ANY MONEY OR TRANSACTION TRAILS, NEEDS TO BE SET ASIDE AS THE APPELLANTS HAVE FAIRLY ESTABLISHED THE FACT OF INCONSISTENCY IN STOCK EXCHANGE REPORTS. 09. IT IS ALSO HUMBLY SUBMITTED WITHOUT PREJUDICE T HAT EVEN THE ESTIMATE OF PROFIT ON ALLEGED TRANSACTIONS HAS BEEN PLACED AT MUCH HIGHER LEVELS OF 2% VIS A VIS ADMITTED AVERAGE PROFIT MARGIN OF 0.59% ON THE TRANSACTIONS. 10. IN LIGHT OF THE FACT THAT APPELLANTS ARE REALLY CONSTRAINED ON FIGURING OUT WAY TO DEAL WITH ALLEGATIONS WHICH ARE BASED ON THIN AIR LIKE STATEMENTS SANS ANY DETAILS. IT IS HUMBLY SUBMITTED THAT IF THESE SUBMISSIONS ARE PERCEIVED TO BE NOT ADEQUA TE ON ANY COUNT; THE FACT MAY BE DISCLOSED TO APPELLANTS AND FURTHER FAIR OPPORTUNITY BE GRANTED TO DEAL WITH ANY APPREHENSIO NS LEFT IN THE MATTER AND TO SUBMIT ANY ADDITIONAL EVIDENCES AS MA Y BE NECESSARY.' THE LD. CIT(A) AFTER GOING THROUGH THE SUBMISSIONS OF THE ASSESSEE, CONFIRMED THE ADDITIONS MADE BY THE A.O. IN HIS ASSESSMENT O RDER DATED 15.12.2010 , VIDE APPELLATE ORDER DATED 26.12.2011 BY HOLDING AS UNDER:- ITA 1078/MUM/2012 7 3.4. I HAVE GONE THROUGH THE SAME. THE APPELLANT H AS STATED THAT SINCE THESE TRANSACTIONS ARE NOT HER TRANSACTIONS, THEY CANNOT BE TREATED AS HER RECEIPT AND ACCORDINGLY CANNOT BE TA XED IN HER HANDS. SINCE THESE INFORMATION WAS RECEIVED BY THE A.O. FROM AIR ENQUIRY WHICH APPELLANT HAS DENIED DURING THE ASSES SMENT PROCEEDINGS ALSO (AS IT IS SEEN THAT AN AFFIDAVIT T O THAT EFFECT WAS FILED BY THE APPELLANT AND WHICH FORMS PART OF THE ASSESSMENT ORDER ALSO) , THE APPELLANT WAS ASKED TO FURNISH A COPY OF AUDIT REPORT FILED ALONG WITH RETURN OF INCOME FOR INSTAN T ASSESSMENT YEAR I.E. 2008-09 . FROM THE SAME IT HAS COME TO NO TICE THAT THE GROSS TURNOVER IN ANNEXURE A OF AUDIT REPORT IN FOR M NO. 3CD SAYS AS UNDER: REFER NOTE-1 3.5. I HAVE SEEN THE DETAILS GIVEN IN NOTE-L' WHI CH SHOWS SCRIPT WISE QUANTITY FOR PURCHASES AS WELL AS SALES FOR TH E YEAR 2007 - 08. THE PURCHASED QUANTITY IS 903020 FOR TOTAL AMOU NT OF RS. 24,14,51,096.11 AND THEY HAVE BEEN SOLD FOR RS.24,2 8,98,229/- RESULTING INTO THE TRADE PROFIT OF RS. 14,47,132.91 . I HAVE ALSO SEEN FROM THE WRITTEN SUBMISSIONS THAT THE APPELLAN T HAS FILED FORM NO. 10-DB UNDER RULE 20AB AS EVIDENCE OF PAYME NT OF SECURITY TRANSACTION TAX FOR CLAIMING THE STT OF RS . 2,56,963/- WHICH WAS CHARGED BY BOMBAY STOCK EXCHANGE LTD. ON THE TOTAL VALUE OF TRANSACTIONS ENTERED DURING THE F.Y. 2007- 08 RELEVANT TO A.Y. 2008-09 REFLECTED AT RS. 32,94,49,013.30. SINC E THE APPELLANT HAS CLAIMED REBATE OF STT FOR RS. 2,56,96 3/- (FOR WHICH GROUND NO. 2 WAS TAKEN IN APPEAL AND HAS NOW BEING WITHDRAWN FOR THE REASON THAT SAME HAS ALREADY BEEN GIVEN EFF ECT TO BY THE A.O. BY PASSING ORDER U/S. 154 DT. 28.1.2011), IT I S CLEAR THAT STT OF RS. 2,56,963/- WAS PAID ON TOTAL TURNOVER OF RS. 32,94,49,013.30 BY THE APPELLANT. THIS IS UNDISPUTE D FACT FOR WHICH APPELLANT HAS CLAIMED BY WAY OF GROUND NO. 2 IN APPEAL ALSO AND WHICH HAS BEEN ACCEPTED AND GIVEN EFFECT T O BY THE A.O. ALSO BY GIVING EFFECT TO VIDE ORDER U/S. 154 DATED 28.01.2011. NOW HAVING CLAIMED REBATE FOR STT PAID OF RS. 2,56,963/ - AS PER THIS VERY CERTIFICATE WHICH WAS FILED BY THE APPELLANT I N FORM NO. 10DB, NOW THE APPELLANT CANNOT DENY THE VOLUME OF T RANSACTION REFLECTED IN THAT VERY CERTIFICATE AT RS. 32,94,49, 013.30. HERE IN APPEAL BY TAKING GROUND NO. L, THE APPELLAN T IS ASKING THE REBATE U/S. 88E FOR STT OF RS. 2,56,963/- ON ONE HA ND, BUT IS DENYING THAT TOTAL TRANSACTIONS ARE NOT OF THE VOLU ME REFLECTED IN SAME CERTIFICATE AT RS. 32,94,49,013.30. THE APPELL ANT IN HIS ITA 1078/MUM/2012 8 TRADING ACCOUNT HAS SHOWN SALE OF SHARES AT RS. 24, 28,98,229/- AND HAS SHOWN PURCHASES AT RS. 24,14,51,096/- ON TH E OTHER HAND. AGAINST THIS, THE AIR INFORMATION REFLECTS TR ANSACTION AMOUNTING TO RS. 20,10,44,369 OUT OF WHICH TRANSACT IONS FOR THE AMOUNT OF RS.7,52,65,347/- HAVE NOT BEEN OWNED UP B Y THE APPELLANT. IF SALE TRANSACTIONS REFLECTED BY THE AP PELLANT ARE NOT OWNED UP TRANSACTIONS THOUGH OBTAINED FROM AIR ENQU IRY OF RS.7,52,65,347/-, THE TOTAL COMES TO RS. 31,81,63,5 76/-, WHICH IS VERY CLOSE TO THE VOLUME OF TRANSACTIONS REFLECTED IN FORM 10DB WHERE THE STT OF RS. 2,56,963/ - HAS BEEN CHARGED O N TRANSACTION AMOUNTING TO RS. 32,94,49,013.30. IN OT HER WORDS, THE TOTAL OF THESE TWO FIGURE I.E TOTAL OF SALE PRO CEEDS SHOWN BY APPELLANT AT RS. 24,28,98,229/- TOGETHER WITH NOT A CCEPTED TRANSACTIONS WORTH RS. 7,52,65,347/-, I.E. TOTAL RS . 31,81,63,576/- CAN BE RECONCILED WITH THE TRANSACTI ONS AMOUNTING TO RS. 32,94,49,013.30 SHOWN IN CERTIFICA TE IN FORM NO. 10DB FURNISHED BY HER ONLY AS EVIDENCE OF PAYME NT OF SECURITY TRANSACTION TAX. 3.6 THUS ON ONE HAND, I AM IN AGREEMENT WITH THE AP PELLANT THAT THERE WAS NO NEED TO ESTIMATE PROFIT ON THE TRANSAC TIONS WORTH RS.7,52,65,347/-, NOT OWNED UP BY HER, AT THE SAME TIME I AM NOT IN AGREEMENT WITH THE CLAIM MADE BY THE APPELLA NT THAT HAVING AVAILED THE REBATE OF RS. 2,56,963/- AS STT PAID STILL SHE CAN CLAIM THAT TURNOVER IS NOT RS. 32,94,49,013.30 BUT ONLY RS. 24,28,98,229 WHICH SHE HAS REFLECTED IN HER TRADING ACCOUNT. NOW AS THE STT OF RS. 2,56,963/- HAS ALREADY BEEN G IVEN EFFECT TO BY PASSING THE ORDER U/S. 154 THE VALUE OF TRANSACT IONS OF RS. 32,94,49,013.30 HAS TO BE CONSIDERED IN THE HANDS O F APPELLANT AS THE SALE RECEIPTS. IN VIEW OF THIS, THE A.O. IS NOT LEFT WITH ANY DISCRETION TO ESTIMATE THE PROFIT WHICH HE HAS DONE BY TAKING IT AT 2% OVER THE ENTIRE UNACCEPTED TRANSACTION AMOUNT OF RS. 7,52,65,347/-AS HE HAS TO THE APPELLANT TO RECONCIL E HER SALES SHOWN AT RS. 24,28,98,229 WITH THE FIGURES REFLECTE D IN THE FORM NO. 10DB UNDER RULE 20AB AT RS. 32,94,49,013.30. IN ABSENCE OF RECONCILIATION ENTIRE GAP BETWEEN THESE TWO FIGURES HAS TO BE TAKEN AS INCOME IN THE HANDS OF THE APPELLANT AND W HILE DOING THE SAME, THERE IS NO NEED TO ESTIMATE THE PROFIT. THUS TOTAL RECEIPTS WHICH ARE ALREADY REFLECTED IN FORM 10DB I N THE TRANSACTION OF RS. 32,94,49,013.30 HAVE TO BE CONSI DERED FOR REBATE GIVEN OF STT PAID AND GIVEN EFFECT TO AS PER THE CERTIFICATE AT RS. 2,56,963/-. IN VIEW OF THIS, THE GROUND NO. 1 IS DISMISSED. ITA 1078/MUM/2012 9 THUS, THE LD. CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE AND UPHELD THE ADDITIONS MADE IN THE ASSESSMENT ORDER DATED 15.12. 2010 PASSED BY THE AO U/S 143(3) OF THE ACT, VIDE APPELLATE ORDER DATED 2 6.12.2011. 5. AGGRIEVED BY THE APPELLATE ORDER DATED 26.12.201 1 PASSED BY THE LD. CIT(A), THE ASSESSEE FILED SECOND APPEAL BEFORE THE TRIBUNA L. 6 THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE ADDITION HAS BEEN MADE BY THE A.O. BASED UPON THE AIR INFORMATION. T HE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO ADDITION CAN BE MADE BASED UPON THE AIR INFORMATION. IT WAS SUBMITTED THAT BANK STATEMENTS WERE SUBMITTED AS WELL CERTIFICATE FROM BSE WAS PRODUCED WHEREIN DETAILS O F STT PAID WAS REFLECTED. THUS , NO ADDITION CAN BE MADE BASED UPON AIR INFOR MATION WAS THE CONTENTION OF LEARNED COUNSEL FOR THE ASSESSEE. TH E ASSESSEE RELIED UPON VARIOUS CASE LAWS WHICH ARE PLACED IN PAPER BOOK FI LED BY THE ASSESSEE WITH THE TRIBUNAL TO CONTEND THAT ADDITIONS BASED ON AIR INFORMATION IS NOT SUSTAINABLE. 7. THE LD. D.R. ON THE OTHER HAND SUBMITTED THAT TH E ASSESSEE FAILED TO RECONCILE THE TRANSACTIONS AS REPORTED IN AIR INFOR MATION AND ALSO CONFIRMED BY BSE . IT WAS SUBMITTED THAT EVEN DURING THE PROC EEDINGS BEFORE THE LD. CIT(A), THE ASSESSEE FAILED TO RECONCILE THE TRANSA CTIONS AS REPORTED BY BSE FOR AIR INFORMATION AND THE BOOKS OF ACCOUNTS MAINTAINE D BY THE ASSESSEE , HENCE, THE LD. CIT(A) WAS QUITE RIGHT IN CONFIRMING THE ASSESSMENT ORDER PASSED BY THE A.O. U/S 143(3) OF THE ACT WAS THE C ONTENTION OF LEARNED DR BEFORE THE TRIBUNAL. THE LEARNED DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. ITA 1078/MUM/2012 10 8. WE HAVE HEARD RIVAL CONTENTIONS AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE CASE LAWS RELIED UPON. WE HAVE OBSERVED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SHARE TRADIN G. THE ASSESSEE IS DEALING IN SHARES THROUGH BOMBAY STOCK EXCHANGE. THE ASSES SEE HAS REPORTED TURNOVER OF RS. 24,28,98,229/- AS PER BOOKS OF ACCO UNTS MAINTAINED BY THE ASSESSEE. THE ASSESSEE HAS ALSO REPORTED TO HAVE P URCHASED SHARES OF RS. 24,14,51,096/- AS PER BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. IT IS ALSO OBSERVED THAT THE BOMBAY STOCK EXCHANGE HAS VI DE AIR INFORMATION REPORTED TO THE REVENUE THAT THE ASSESSEE HAD ENTER ED INTO TOTAL VALUE OF TRANSACTIONS REFLECTED AT RS. 32,94,49,013.30 FOR T HE PREVIOUS YEAR RELEVANT TO IMPUGNED ASSESSMENT YEAR 2008-09. BSE HAS REAFFIRME D AND RECONFIRMED THE SAID TRADED TRANSACTIONS OF RS. 32,94,49,013.30 OF THE ASSESSEE VIDE LETTER DATED 22.11.2010. THE ASSESSEE HAS FILED FORM NO 10DB UNDER RULE 20AB OF INCOME-TAX RULES, 1962 WHEREIN TOTAL TRADED TRANSAC TIONS ADMITTED BY THE ASSESSEE IS RS. 32,94,49,013.30 AGAINST WHICH STT P AID REFLECTED IS RS. 2,56,963/- ( PAPER BOOK/PAGE 1) . THE ASSESSEE HAD CLAIMED STT REBATE OF RS. 2,56,963/- ON THE TOTAL TRADED TRANSACTIONS OF RS. 32,94,49,013.30 WHICH IS AN ADMITTED AND UNDISPUTED POSITION BETWEEN RIVA L PARTIES . THE AO HAD PASSED ORDER DATED 28.1.2011 U/S 154 OF THE ACT FOR GIVING REBATE OF RS. 2,56,963/- TOWARDS STT ON TOTAL TRADED TRANSACTIONS OF RS. 32,94,49,013.30 , WHICH ORDER OF THE AO WAS ACCEPTED BY THE ASSESSEE AND GROUND OF APPEAL FILED BEFORE THE LEARNED CIT(A) W.R.T. THIS ISSUE W AS WITHDRAWN BY THE ASSESSEE. THERE WERE UN-RECORDED AND UN-RECONCILED TRADED TRANSACTION OF RS. 7,52,65,347/- ALLEGED TO BE ENTERED BY THE ASSESSEE AS PER CERTIFICATE FROM BSE VIS--VIS BOOKS OF ACCOUNTS MAINTAINED BY THE A SSESSEE. THE ASSESSEE HAS DENIED TO HAVE ENTERED INTO SUCH TRANSACTIONS B UT WHILE CLAIMING STT REBATE , THE ASSESSEE HAS ADMITTED TO HAVE ENTERED INTO THESE UN-REPORTED AND UN-RECONCILED TRANSACTIONS OF RS. 7,52,65,347/- . IT IS ALSO OBSERVED THAT THE BSE VIDE ITS LETTER DATED 22-11-2010 HAS ALSO RE-CO NFIRMED THESE TRADED SHARE TRANSACTIONS TO THE TUNE OF RS. 7,52,65,347/- WHIC H HAD BEEN DENIED BY THE ITA 1078/MUM/2012 11 ASSESSEE TO HAVE NOT BEEN ENTERED INTO. THE AIR INF ORMATION RELIED UPON BY THE AO WAS GENERATED OUT OF TRANSACTIONS RECORDED I N BSE WHICH WAS REPORTED TO REVENUE BY BSE . IT WAS INCUMBENT UPON THE ASSESSEE TO RECONCILE THE SAME AND MORE SO WHEN STT REBATE OF R S. 2,56,963/- IS CLAIMED BY THE ASSESSEE ON TRADE TRANSACTIONS TO THE TUNE O F RS. 32,94,49,013.30 REPORTED BY BSE THROUGH AIR INFORMATION , AND NOT A GAINST THE RECORDED TRADE TRANSACTIONS OF RS.24,28,98,229/- AS RECORDED IN BO OKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. THE CASE LAWS RELIED U PON BY THE ASSESSEE ARE DISTINGUISHABLE AND HENCE CANNOT BE RELIED UPON SO AS TO THE EXTENT OF QUASHING THE ADDITIONS MADE BY THE AUTHORITIES BELO W AS IN THE INSTANT CASE THE ASSESSEE HAD HERSELF ADMITTED TO HAVE PAID STT OF RS. 2,56,963/- ON TOTAL TRADED TRANSACTIONS OF RS. 32,94,49,013.30 . THE AS SESSE IS CONTENDING EVEN BEFORE US THAT THE ASSESSEE HAD PURCHASED THE SHARE S WORTH RS. 24,14,51,096/- AND SOLD THE SHARES OF RS. 24,28,98, 229/- FOR WHICH ASSESSEE HAD FILED COPIES OF CONTRACTS NOTES IN PAPER BOOK F ILED BEFORE THE TRIBUNAL . THE AO HAS BROUGHT TO TAX TOTAL UN-RECONCILED AND UN-RE CORDED TRADED TRANSACTIONS TO THE TUNE OF RS. 7,52,65,347/- WHERE IN PROFIT OF 2% WAS ESTIMATED AS INCOME OF THE ASSESSEE TO THE TUNE OF RS.15,05,306/- WHICH WAS BROUGHT TO TAX VIDE ASSESSMENT ORDER DATED 15.12.20 10 PASSED BY THE AO U/S 143(3) OF THE ACT , WHICH WAS LATER CONFIRMED/SUSTA INED BY LEARNED CIT(A) VIDE HIS APPELLATE ORDER DATED 26.12.2011. THUS, WE IN P RINCIPLE AGREE WITH THE REASONING GIVEN BY THE LEARNED CIT(A) IN HIS APPELL ATE ORDER DATED 26.12.2011 WHILE SUSTAINING THE ASSESSMENT ORDER DATED 15.12.2 010 PASSED BY THE AO U/S 143(3) OF THE ACT THAT AIR INFORMATION CANNOT B E SIMPLY BRUSHED ASIDE AND ONUS IS ON THE ASSESSEE TO HAVE RECONCILED THE SAME INSTEAD OF MERELY DENYING THE SAME. IT WAS INCUMBENT ON THE ASSESSEE HERSELF TO HAVE TAKEN-UP WITH BSE DIRECTLY TO CLARIFY AS TO HOW UN-RECORDED TRANSACTION OF RS. 7,52,65,347/- WAS REFLECTED AGAINST HER NAME IN BSE PORTAL . NO SUCH EFFORTS SEEMS TO HAVE BEEN MADE BY THE ASSESSEE WHICH IS BR OUGHT ON RECORD EXCEPT SIMPLE DENIAL BY THE ASSESSEE WHICH IS NOT SUFFICIE NT TO DISCHARGE THE BURDEN ITA 1078/MUM/2012 12 CAST ON THE ASSESSEE. BUT AT THE SAME TIME, WE HAVE ALSO OBSERVED THAT THE ASSESSEE HAS EARNED NET PROFIT OF 0.59% ON THE UND ISPUTED TRADED TRANSACTIONS RECORDED IN THE BOOKS OF ACCOUNTS MAIN TAINED BY THE ASSESSEE, WHICH NET PROFIT RATIO OF 0.59% ON RECORDED TRANSAC TIONS WAS ACCEPTED BY REVENUE WHILE FRAMING ASSESSMENT ORDER DATED 15.12. 2010 PASSED BY THE AO U/S 143(3) OF THE ACT OF 1961. IN OUR VIEW THE END OF SUBSTANTIAL AND COMPLETE JUSTICE WILL BE MET IN THE INSTANT APPEAL KEEPING I N VIEW PECULIAR FACTS OF THE CASE, IF UN-RECORDED TRANSACTION IN THE BOOKS OF AC COUNTS WHICH IS REPORTED BY BSE TO HAVE BEEN ENTERED BY THE ASSESSEE TO THE TUNE OF RS. 7,52,65,347/- IS ALSO BROUGHT TO TAX BY ESTIMATING NET PROFIT @ 0.59% ON RS.7,52,65,347/-, WHEREIN INCOME IS SUSTAINED/CONF IRMED IN THE HANDS OF THE ASSESSEE TO THE TUNE OF RS. 4,44,066/- AND REST OF THE ADDITION STAND DELETED. WE ORDER ACCORDINGLY. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IN I TA NO. 1078/MUM/2012 FOR ASSESSMENT YEAR 2008-09 IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND FEBRUARY, 2017. # $% &' 22-02-2017 ( ) SD/- SD/- (C.N. PRASAD) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 22-02-2017 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS ITA 1078/MUM/2012 13 !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI I BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI