Smt.Leela Bai , Bangalore V. Income Tax Officer Ward-5(2)(1), Bangalore

ITA 237/BANG/2018

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5471 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 29-01-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: L V BHASKAR REDDY
• Keywords: Gift; Principle of natural justice; Accommodation entries
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 237 / BANG/201 8 ASSESSMENT YEAR : 20 0 9 - 10 SMT. LEELA BAI, W/O. B. NATHAMAL, C/O. PARAS JEWELLERS, NO. 935, NAGARATHPET, BANGALORE 560 002. PAN: ABWPB6061F VS. THE INCOME TAX OFFICER, WARD 5 (2)(1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI L.V. BHASKAR REDDY, ADDL. CIT (DR) DATE OF HEARING : 20 . 0 3 .2018 DATE OF PRONOUNCEMENT : 20 . 0 3 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT(A) 4, BANGALORE DATED 27.07.2017 FOR ASSESSME NT YEAR 2009-10. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER OF THE LEARNED CIT (APPEAL) 4, BENGA LURU IN THE PRESENT CASE IS OPPOSED TO LAW. 2. THE LEARNED CIT (APPEAL) ERRED BOTH IN LAW AS WE LL AS IN FACT IN DENYING TO ACCEPT THE SUBMISSION MADE DURING APPEAL PROCEEDINGS 3. IN ANY CASE AND WITHOUT PREJUDICE THE ORDER HAVI NG BEEN PASSED BY LEARNED CIT (APPEALS) IN TOTAL DISREGARD OF AND IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE MAKES THE ORDER BAD I N LAW AND LIABLE TO BE QUASHED. 4. IN ANY CASE AND WITHOUT PREJUDICE THE LEARNED CI T (APPEALS) HAS ERRED IN: A. TAXING THE ENTIRE SALE PROCEEDS OF RS.24,33,986/ - AS INCOME OF THE APPELLANT. B. THE LTCG CLAIMED WAS RS. 20,10,195/- WHICH IS VE RY LESS THAN THE TOTAL SALE PROCEEDS TREATED AS INCOME. [WHEREIN COST OF SHARES PURCHASED IS NOT CONSIDERED ] C. HAS NOT CONSIDERED THE FACT THAT THE APPELLANT H AS EARNED LTCG ON SALE OF SHARES. D. WITHOUT ANY BASIS, HELD THE TRANSACTION IN SHARE S AS FRAUDULENT. E. HOLDING THAT THE PROVISIONS OF SECTION 68 OF THE ACT APPLICABLE TO ITA NO. 237/BANG/2018 PAGE 2 OF 3 THIS CASE. 5. THE CIT (APPEALS) HAS ERRED IN MAKING VARIOUS OB SERVATIONS AND COMING TO VARIOUS CONCLUSIONS, WITHOUT ANY PROOF OR EVIDENCE AND SUCH OBSERVATIONS AND CONCLUSIONS NEED TO BE IGNORE D. 6. THE APPELLANT DENIES THE LIABILITY TO PAY INTERE ST. THE INTEREST HAVING BEEN LEVIED ERRONEOUSLY IS TO BE DELETED. 7. IN VIEW OF ABOVE AND OTHER GROUNDS TO BE ADDUCED AT THE TIME OF HEARING, IT IS REQUESTED THAT THE IMPUGNED ORDER BE QUASHED AND THE RETURNED EXEMPTED INCOME FROM LTCG BE ACCEPTED. THE ASSESSMENT OF INCOME U/S 68 BE DELETED AND THE INTEREST ALSO TO BE DELETED. 3. THE APPEAL WAS FIRST FIXED FOR HEARING ON 28.02. 2018. ON THIS DATE, NONE APPEARED ON BEHALF OF THE ASSESSEE AND HENCE, HEARI NG WAS ADJOURNED TO 20.03.2018 AND THE NOTICE OF HEARING WAS SENT TO AS SESSEE BY RPAD AT THE ADDRESS PROVIDED BY THE ASSESSEE IN FORM NO. 36. O N THIS DATE ALSO, NONE APPEARED ON BEHALF OF THE ASSESSEE. HENCE THE APPE AL OF THE ASSESSEE WAS HEARD EX-PARTE QUA THE ASSESSEE. THE LD. DR OF REV ENUE SUPPORTED THE ORDER OF CIT(A). 4. I HAVE CONSIDERED THE SUBMISSIONS OF LD. DR OF R EVENUE AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. I FIND THAT ISSUE IN DISPUTE WAS DECIDED BY CIT(A) AS PER PARA NO. 9.4 OF HIS ORDER WHICH IS REPRODUCE D HEREINBELOW FOR THE SAKE OF READY REFERENCE. 9.4. SHRI MUKESHCHOKSI, BEING THE KEY PERSON OF THE GROUP OF MAHASAGARSECURITIES HAD ADMITTED IN HIS SWORN STATE MENT THATHE AND HIS GROUP COMPANIES M/S. MAHASAGAR SECURITIES, M/S. ALLIANCE INTERMEDIARIES AND M/S. NETWORK PVT. LTD, WERE ENGA GED IN FRAUDULENT BILLING ACTIVITIES AND IN GIVING ACCOMMODATION ENTR IES IN ORDER TO ENABLE THE CLIENTS TO DECLARE SPECULATION PROFIT/LO SS, SHORT TERM CAPITAL GAIN, LONG TERM CAPITAL GAIN, PROFITS/ LOSS ON ACCO UNT OF COMMODITY TRADING, INTRODUCE SHARE APPLICATION MONEY OR INTRO DUCE MONEY IN THEFORMOF GIFT. THE INVESTIGATION WING HAS IDENTIFI ED THOSE BENEFICIARIES WHO HAVE MADE INVESTMENTS IN THOSE SP ECIFIED SHARES WHO GOT BENEFITED OUT OF SUCH ACCOMMODATION ENTRIES BY A COLOURABLE DEVICE USED TO DEFRAUD THE REVENUEDEPT. THE PAYMEN T MADE TOWARDS THEPURCHASE THROUGH A BROKER AND DEMATING OF THOSE SHARES WAS ONLY AN AFTERTHOUGHT. SINCE, SHRI MUKESHCHOKSI HAS GIVEN THE NAMES OF SUCH BENEFICIARIES WHO WERE SPREAD ALL OVER THE COU NTRY, IT IS EXTREMELY DIFFICULT TO CONFRONT THE STATEMENT GIVEN BY HIM BEFORE EACH AND EVERY BENEFICIARY. THEREFORE, THE HONBLE TRIBU NALS FINDING IN THE REFERRED CASES RELIED BY THE APPELLANT, THAT TH E TRANSACTIONS COULD NOT HAVE BEEN DISCARDED AS BOGUS BASED ON THE UN-CO NFRONTED STATEMENT OF SHRI MUKESHCHOKSI CANNOT BE FOLLOWED A S THE HON'BLE ITA NO. 237/BANG/2018 PAGE 3 OF 3 TRIBUNAL'S FINDING IS CASE SPECIFIC. ON THE CONTRAR Y, SHRI MUKESHCHOKSI HIMSELF HAS CATEGORICALLY ADMITTED THA T HE HAD PROVIDED ACCOMMODATION ENTRIES AND THEREFORE HE CAN NOT BE STATED THAT HE IS UNRELATED PARTY TO THE APPELLANT. THEREF ORE, I AM OF THE CONSIDERED OPINION THAT THOUGH THE SHARES WERE DEMA TED AND STT HAS BEEN PAID, THE ACCOMMODATION ENTRIES WERE PROVIDED BY SHRI MUKESHCHOKSI IN ORDER TO ENABLE THE PEOPLE LIKE THE APPELLANT TO DECLARE SPECULATION PROFIT/LOSS, SHORT TERM CAPITAL GAIN, LONG TERM CAPITAL GAIN, PROFITS/ LOSS ON ACCOUNT OF COMMODITY TRADING, INTRODUCING SHARE APPLICATION MONEY OR INTRODUCING MONEY IN THE FORM OF GIFT. THE ASSESSING OFFICER'S ACTION IN TREATING THOSE TR ANSACTIONS AS BOGUS AND TAXING THE SAME IS UPHELD. THEREFORE, THE GROUN DS OF APPEAL ARE NOT FOUND TO BE ACCEPTABLE. IN BACKGROUND OF THE ABOVE DETAILED DISCUSSION AND FACTS & CIRCUMSTANCES OF THE CASE, THE CONTENTIONS OF THE A SSESSEE CANNOT BE ACCEPTED. THE GROUNDS OF APPEAL OF THE ASSESSEE THE REFORE ARE DISALLOWED. 5. CONSIDERING THE FACTS OF THE PRESENT CASE AND TH E FINDINGS GIVEN BY CIT(A), I FIND NO INFIRMITY IN THE ORDER OF CIT(A). 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 20 TH MARCH, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.