Appeal Details
Counselvise Citation
[2015] 140 COUNSELVISE.COM (IT) 100844 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 4 month(s) 19 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
14-08-2015
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
B
Next Hearing Date
30-06-2015
Assessment Year
2003-2004
Appeal Filed On
26-03-2013
Judgement Text
, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO.2391/MUM/2013 ASSESSMENT YEAR: 2003-04 MAYUR M SHAH, 35/36, MANGLAM, MATHURADAS ROAD, KANDIVALI (W), MUMBAI-400067 / VS. INCOME TAX OFFICER-25(3)(1), C-11, PRATYAKSHAR BHAVAN, BANDRA KURLA COMPLEX, MUMBAI-400051 ( !' # /ASSESSEE) ( $ / REVENUE) P.A. NO. AADPS5598Q !' # / ASSESSEE BY SHRI AJAY SINGH $ / REVENUE BY SHRI ASGAR ZAIN, V.P. DR % $& ' # ( / DATE OF HEARING : 09/07/2015 ' # ( / DATE OF ORDER: 14/08/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 15/01/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- I. REOPENING OF ASSESSMENT IS BAD IN LAW: MAYUR M SHAH ITA NO.2391/MUM/2013 2 1. THE ID. CIT(A) ERRED IN HOLDING THAT THE RE-ASSE SSMENT IS VALID WITHOUT APPRECIATING THAT AO HAS REOPENED THE ASSES SMENT MERELY ON BASIS OF SUSPICION AS AO HAS NOT INDEPENDENTLY A PPLIED ITS MIND TO THE MATERIAL ON RECORD AND MERELY ACTED ON THE REPORT OF DIT (INV.), HENCE THE NOTICE IS BAD IN LAW LIABLE T O BE QUASHED. II. PRINCIPLE OF NATURAL JUSTICE IS VIOLATED: 2. THE ID. CIT (A) FAILED TO APPRECIATED THAT THE S TATEMENT MADE BY MUKESH CHOKSI U/ S 131 WAS A GENERAL STATEMENT AND THE NAME OF THE APPELLANT DID NOT APPEAR THEREIN THEREFORE NOTH ING CAN BE CONCLUDED AGAINST THE APPELLANT UNLESS A COPY OF TH E STATEMENT ALONGWITH THE LIST OF THE ALLEGED BENEFICIARIES AND CROSS EXAMINATION OF MUKESH CHOKSI IS PROVIDED TO THE ASS ESSEE, HENCE PRINCIPLE OF NATURAL JUSTICE IS VIOLATED THE ADDITI ONS OF RS.7,23,940/- AS UNEXPLAINED INCOME DESERVES TO BE DELETED. III. ADDITION OF RS. 7,23,940: 3. THE LEARNED CIT(A) ERRED IN UPHOLDING THE ORDER OF THE AO TREATING THE LONG-TERM CAPITAL GAIN DISCLOSED ON TH E SALE OF SHARES OF BUNIYAD CHEMICALS LTD. AS UNEXPLAINED INCOME AND SUSTAINING THE ADDITION OF RS.7,23,940/- WITHOUT APPRECIATING THAT IN THE A Y. 2002-03 THE PURCHASE OF 14,000 EQ. SHARES OF BUNIYA D CHEMICALS LTD. AT RS.8,400/- WERE ACCEPTED AS GENUINE PURCHAS ES AND WERE SUPPORTED BY PROPER DOCUMENTARY EVIDENCE LEE, THERE FORE, THE SALES EFFECTED DURING THE RELEVANT YEAR WERE WRONGLY HE D AS BOGUS AND SHAM TRANSACTION. 4. THE LD CIT (A) FAILED TO APPRECIATE THAT THE TRA NSACTION OF SALES AND PURCHASES OF SHARES WERE PRIOR TO 21.6.2004 AND M/ S. GOLD STAR FINVEST LTD. WERE EXPELLED AS A TRADING MEMBER ONLY AFTER 21.6.2004 ,HENCE THE SAID ADDITIONS ARE CONTRARY TO LAW AND THEREFORE, THE SAME BE DELETED. IV. ADDITION OF COMMISSION OF RS. 36,197: 5. THE ID. CIT(A) ERRED IN SUSTAINING THE ADDITIONS OF RS.36,197/- BEING ALLEGED COMMISSION PAID TO SHRI MUKESH CHOKS I FOR PROVIDING LONG-TERM CAPITAL GAIN IS UNJUSTIFIED, UN WARRANTED AND CONTRARY TO THE PROVISIONS OF LAW HENCE THE SAID AD DITION BE DELETED. MAYUR M SHAH ITA NO.2391/MUM/2013 3 2. DURING HEARING OF THIS APPEAL, SO FAR AS, REOPE NING OF ASSESSMENT U/S 147 OF THE ACT IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE, SHRI AJAY SINGH, ORIGINAL ASSESSM ENT WAS COMPLETED U/S 143(1) AND NOTICE U/S 148 WAS ISSUED ON 31/03/2010. RELIANCE WAS PLACED UPON THE DECISION I N 357 ITR 330 AND 357 ITR 146 (DEL.). ON THE OTHER HAND, SHRI ASGAR ZAIN, LD. DR, DEFENDED THE REOPENING OF ASSES SMENT BY CONTENDING THAT M/S GOLD STAR FINVEST PVT. LTD., A COMPANY BELONGING TO SHRI MUKESH CHOKSHI AND HIS ASSOCIATES WAS FOUND TO BE ENGAGED IN BOGUS ACCOMMODATION ENTRIES FOR SHARE TRANSACTION INCLUDING SPECULATION PROFIT OR LOSS, S HORT TERM AND LONG TERM CAPITAL GAIN OR LOSS BY PROVIDING BOG US BILLS. IT WAS ALSO CONTENDED THAT NONE OF THE ASSOCIATE ENTIT IES OF SHRI MUKESH CHOKSHI HAD A VALID LICENSE AS A STOCK BROKE R IN THE STOCK EXCHANGE AND FURTHER SUCH BOGUS ENTRIES WERE NOT CARRIED THROUGH STOCK EXCHANGE OR RECOGNIZE BROKER. THE TRANSACTIONS WERE ARGUED TO BE OF MARKET TRANSACTIO N, THUS, THE REOPENING WAS RIGHTLY MADE. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT AN ELABORATE DISCUSSION HAS BEEN MADE IN THE ASSESSMEN T ORDER AS WELL AS IN THE IMPUGNED ORDER WITH RESPECT TO TH E FACTS AND THE BOGUS ENTRIES MADE BY THE PERSON INVOLVED AS HA S BEEN DELIBERATED UPON IN THE ORDER. ENQUIRIES WERE COND UCTED FROM THE STOCK EXCHANGE AND THE REPLY OF THE STOCK EXCHA NGE HAS ALREADY BEEN MENTIONED IN PAGE-4 OF THE IMPUGNED OR DER, THEREFORE, THE SAME IS NOT BEING REPEATED, BEING, M ATTER OF MAYUR M SHAH ITA NO.2391/MUM/2013 4 RECORD. WE FURTHER NOTE THAT THE TRIBUNAL (MUMBAI BENCHES) VIDE ORDER DATED 28/03/2008 IN THE CASE OF M/S GOLD STAR FINVEST PVT. LTD. ITA NO.4625 AND 5000/MUM/2005 FOR A.Y. 2002-03, ANOTHER ORDER DATED 29/08/2008 IN RICHMOND SECURITIES PVT. LTD. (SUBSEQUENTLY KNOWN AS MAHASAG AR SECURITIES PVT. LTD. AND NOW KNOWN AS ALAG SECURITI ES PVT. LTD.) IN ITA NO.4624/MUM/2005 AND M/S ALFA CHEMI TR ADE AGENCIES PVT. LTD. (ITA NO.4999/MUM/2005), M/S MIHI R AGENCIES PVT. LTD. (ITA NO.4912/MUM/2005) ORDER DAT ED 30/05/2008 HAS DELIBERATED UPON THE ISSUE AND FOUND THAT THESE COMPANIES WERE INVOLVED IN PROVIDING BOGUS EN TRIES. 2.2. IT IS ALSO NOTED THAT SHRI MUKESH CHOKSHI WA S EXAMINED ON OATH , U/S 131 OF THE ACT, ON 11/12/200 9 BY THE INVESTIGATION WING (MUMBAI) AND VIDE REPLY TO QUEST ION NO.2 ONWARDS (PAGE-9 TO 13 OF THE IMPUGNED ORDER) HE CAT EGORICALLY STATED THAT HE WAS ENGAGED IN PROVIDING ACCOMMODATI ON ENTRIES THROUGH VARIOUS COMPANIES LIKE MAHASAGAR SE CURITIES PVT. LTD., MIHIR AGENCIES PVT. LTD., ALLIANCE INTER MEDIARIES AND NETWORK PVT. LTD., GOLD STAR FINVEST PVT. LTD. ETC, THUS, FROM THE REASONS RECORDED, WE FIND THAT THERE WAS AMPLE MATERIAL WITH THE ASSESSING OFFICER TO REOPEN THE ASSESSMENT AS INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT, CONSEQUEN TLY, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD . COMMISSIONER OF INCOME TAX (APPEALS), SO FAR AS, RE OPENING OF ASSESSMENT IS CONCERNED. 3. NOW, WE SHALL TAKE UP GROUND NO.2, WHEREIN, THE ASSESSEE IS AGGRIEVED ON THE GROUND THAT THE STATEM ENT MAYUR M SHAH ITA NO.2391/MUM/2013 5 TENDERED BY SHRI MUKESH CHOKSHI RECORDED U/S 131 WA S GENERAL STATEMENT, WHEREIN THE NAME OF THE ASSESSEE WAS NOT APPEARING, THUS, NOTHING CAN BE CONCLUDED AGAINST T HE ASSESSEE UNLESS COPY OF STATEMENT ALONGWITH THE LIS T OF ALLEGED BENEFICIARIES AND CROSS EXAMINATION OF THE MUKESH C HOKSHI IS PROVIDED TO THE ASSESSEE, BY FURTHER CONTENDED THAT THE PRINCIPLE OF NATURAL JUSTICE HAS VIOLATED. THE LD . COUNSEL FOR THE ASSESSEE, ADVANCED HIS ARGUMENTS, WHICH IS IDEN TICAL TO THE GROUND RAISED BY INVITING OUR ATTENTION TO PAPE R BOOK PAGE 53 (LETTER DATED 07/12/2010), PAGE 55 (LETTER DATED 10/12/2012) AND PAGE-57 (LETTER DATED 11 TH OCTOBER, 2010). ON THE OTHER HAND, THE LD. DR, DEFENDED THE CONCLUS ION ARRIVED AT IN THE IMPUGNED ORDER. 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT VIDE LETTER DATED 07/12/2010, ADDRESSED TO THE ITO (25)( 3)(1), WHEREIN, THE ASSESSEE HAS CLAIMED THAT THE REQUIRED DETAILS WERE NOT PROVIDED TO THE ASSESSEE, IDENTICALLY, THR OUGH ITS LETTER DATED 10/12/2012, THE ASSESSEE ASK FOR LIST OF BENEFICIARIES, STATEMENT OF MUKESH CHOKSHI, RECORDE D U/S 131, BALANCE SHEET AND PROFIT & LOSS ACCOUNT OF GOL D STAR FINVEST PVT. LTD. ALONG WITH ITS RETURN, COPY OF BA NK STATEMENTS GIVING DETAILS OF RECEIPT AND PAYMENTS M ADE BY THE ASSESSEE TO GOLD STAR FINVEST PVT. LTD., DETAILS OF SALES, PURCHASES, BROKERAGE RECEIVED AND ACCOUNTED IN THE BOOKS OF ACCOUNTS. WE NOTE THAT ALL THESE LETTERS, THERE IS AFFIXTURE OF SEAL OF THE ITO, MEANING THEREBY, THESE LETTERS WER E FILED BY MAYUR M SHAH ITA NO.2391/MUM/2013 6 THE ASSESSEE. THUS, WITHOUT GOING INTO MUCH DELIBER ATION, WE REMAND THIS ISSUE TO THE FILE OF THE LD. ASSESSING OFFICER TO PROVIDE THE DETAILS WHICH ARE AVAILABLE ON RECORD O F THE ASSESSING OFFICER AND PROVIDE OPPORTUNITY TO THE AS SESSEE. THUS, THIS GROUND OF THE ASSESSEE IS ALLOWED FOR ST ATISTICAL PURPOSES. 4. THE REMAINING GROUNDS WERE NOT ARGUED BY THE ASSESSEE, THEREFORE, WE REFRAIN OURSELVES TO COMMEN T FURTHER. HOWEVER, IT IS MADE CLEAR THAT THE TRIBUNAL AS MENT IONED EARLIER, HAS DECIDED, IDENTICALLY VARIOUS CASES OF MAHASAGAR GROUP OF COMPANIES, THE DETAILS OF WHICH ARE AVAILA BLE IN PARA 4 ONWARDS OF THE IMPUGNED ORDER, THEREFORE, THE ASS ESSING OFFICER MAY DECIDE THIS APPEAL ON THE BASIS OF TOTA LITY OF FACTS AVAILABLE ON RECORD. THE ASSESSEE BE GIVEN OPPORTU NITY OF BEING HEARD. FINALLY, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED F OR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN ON 14/08/2015 . SD/ - (B.R.BASKARAN) SD/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % & MUMBAI; ) DATED : 14/08/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT MAYUR M SHAH ITA NO.2391/MUM/2013 7 2. ./,- / THE RESPONDENT. 3. % 0# ( *+ ) / THE CIT, MUMBAI. 4. % 0# / CIT(A)- , MUMBAI 5. 2$3 .# , *+( * 4 , % & / DR, ITAT, MUMBAI 6. 5! 6& / GUARD FILE. / BY ORDER, /2+# .# //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % & / ITAT, MUMBAI
