ITO 17(1)(2), MUMBAI V. MADAN S. KOTHARI, MUMBAI

ITA 2456/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3670 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-07-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 01-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVAJI B GHODE
• Assessee Lawyers: RAHUL K HAKANI
• Keywords: Income from undisclosed sources
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI B BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO. 2456/MUM/2013 (ASSESSMENT YEAR:2005-06) ITO -17(1)(2), MUMBAI-400012 APPELLANT VS. SHRI MADAN S. KOTHARI, 242/243, KALPATARU HABITANT, NEAR ITC HOTEL, PAREL, MUMBAI-400012 RESPONDENT PAN: AADPK9616K /BY APPELLANT : SHRI SHIVAJI B. GHODE, D.R. /BY RESPONDENT : SHRI RAHUL K. HAKANI, A.R. /DATE OF HEARING : 04.08.2016 /DATE OF PRONOUNCEMENT : 12.08.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE O RDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-29, MUMBAI, DA TED 31.01.2013 FOR A.Y. 2009-10 ON FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN TREATING THE SH ARE TRANSACTIONS OF RS.43,29,235/- AS GENUINE & DIRECTI NG AO TO TREAT THE INCOME THERE FROM AS LTCG INSTEAD O F INCOME FROM UNDISCLOSED SOURCES UNDER SECTION 68 OF ITA NO.2456/MUM/13 A.Y. 05-06 [ITO VS. SHRI MADAN S KOTHARI] PAGE 2 THE ACT BY HOLDING TRANSACTIONS RELATING TO M/S. MAHASAGAR SECURITY PVT. LTD. (NOW KNOWN AS ALAG SECURITIES PVT. LTD. AND ITS RELATED COMPANIES INCL UDING M/S. ALLIANCE INTERMEDIATERIES AND NETWORK PVT. LTD . AS NOT COLORABLE DEVICES THOUGH MR. MUKESH CHOKSI HAS GIVEN HIS STATEMENT TO THAT EFFECT BEFORE THE D DIT (INV), DURING THE SEARCH ACTION U/S.132 OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE VARIOUS JUDICIAL DECISIONS INCLUDING ACIT VS. RAMESHCHANDRA R. PAREL REPORTED IN 89 ITD 203 (AHD) WHEREIN IT IS HELD THAT WHERE THERE WAS COERCION OR THREAT AND STATEMENT WAS CLEAR AND UNAMBIGUOUS, THE SAME IS BINDING ON THE ASSESSEE EVEN IF IT WAS SUBSEQUENTLY RETRACTED. 3. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN CONSIDERING THE DEDUCTION U/S.54F IS ALLOWABLE. 2. IN ASSESSMENT PROCEEDINGS, ASSESSING OFFICER HAS EXAMINED THE TRANSACTIONS DONE BY ASSESSEE LEADING TO CAPITAL GAIN. ASSESSEE HAD PURCHASED 50,000 SHARES OF OPTI MATIC TEXTILE. SHARES HAVE BEEN PURCHASED ON 27.01.2003 AND 31.03.2003 FOR A CONSIDERATION OF RS.3,65,000/-. T HEY HAVE BEEN SOLD IN THE PERIOD BETWEEN 10.02.2005 TO 31.03 .2005 FOR A TOTAL CONSIDERATION OF RS.43,29,234.86. ASSESSIN G OFFICER ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE ENTIRE AMOUNT OF CONSIDERATION RECEIVED OF RS.48,58,660.36 ON SALE O F SHARES OF M/S. OPTIMATIC TEXTILE SHOULD NOT BE DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF ASSESSEE IN VIEW OF MAT ERIAL FACTS FOUND AND REVEALED DURING COURSE OF SEARCH OPERATIO N AT THE BUSINESS PREMISES OF SHRI MUKESH CHOKSHI AND HIS AS SOCIATES SHRI JAYESH SAMPAT. ASSESSEE RAISED VARIOUS CONTENT IONS ITA NO.2456/MUM/13 A.Y. 05-06 [ITO VS. SHRI MADAN S KOTHARI] PAGE 3 BEFORE CONCERNED ASSESSING OFFICER WHO REJECTED THE APPEAL. MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHO RITY, WHEREIN AGAIN VARIOUS CONTENTIONS WERE RAISED ON BE HALF OF ASSESSEE AND HAVING CONSIDERED THE SAME, CONCERNED CIT(A) HAS ALLOWED THE APPEAL OF ASSESSEE. 2.1 SAME HAS BEEN OPPOSED ON BEHALF OF REVENUE INTE R ALIA SUBMITTED THAT CIT(A) ERRED IN TREATING THE SHARE T RANSACTIONS OF RS.48,29,235/- AS GENUINE, SO, ORDER OF CIT(A) B E SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. LD. AUT HORIZED REPRESENTATIVE SUPPORTED THE ORDER OF CIT(A). 2.2 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATER IAL ON RECORD, WE FIND THAT SHARES WERE IN DEMAT FORM AND PAYMENTS WERE MADE BY CHEQUE. TRANSACTIONS WERE CARRIED OUT THROUGH INTERCONNECTED EXCHANGE OF INDIA LTD. WHICH IS A RE COGNIZED STOCK EXCHANGE AND STT WAS ALSO COLLECTED BY STOCK EXCHANGE ON THIS TRANSACTION. ASSESSEE HAS DISCLOSED PURCHAS ES OF SHARES IN EARLIER TWO YEARS RETURNS. ONCE PURCHASE S HAVE NOT BEEN DOUBTED THE SUBSEQUENT SALES OF SHARES SHOULD NOT BE DOUBTED. ALL TRANSACTIONS OF PURCHASES AND SALES W ERE THROUGH CHEQUE AND SAME WERE DEPOSITED IN BANK. DURING REM AND REPORT PROCEEDINGS, ASSESSING OFFICER RECORDED THE STATEMENT OF SHRI MUKESH CHOKSHI. IN HIS STATEMENT, MUKESH CHOK SHI CONFIRMED THE TRANSACTIONS OF ASSESSEE AS GENUINE. IT WAS ALSO INFORMED THAT ALL THESE TRANSACTIONS WERE THROUGH 0 .1% BROKERAGE FROM ASSESSEE. REGARDING STATEMENT GIVEN TO THE DDI UNIT I(4), MUMBAI, HE CONFIRMED THAT IT WAS A G ENERAL STATEMENT AND IT DID NOT APPLY TO THE CASE OF ASSES SEE. ITA NO.2456/MUM/13 A.Y. 05-06 [ITO VS. SHRI MADAN S KOTHARI] PAGE 4 THEREFORE, EVEN IN REMAND REPORT, ASSESSING OFFICER HAD NOT GIVEN ANY ADVERSE FINDING. ITAT, MUMBAI IN VARIOUS CASES DELETED SUCH ADDITIONS. IN VIEW OF THESE FACTS AND CIRCUMSTANCES AND SPECIALLY IN THE LIGHT OF DECISIO N OF ITAT MUMBAI BENCH ON THE POINT OF ADDITION MADE BY ASSES SING OFFICER OF RS.43,29,235/- U/S.68 OF THE ACT WAS RIG HTLY DELETED BY CIT(A) AND HE RIGHTLY DIRECTED THAT SAME HAS BEE N TAXED AS CAPITAL GAIN OF ASSESSEE. THIS REASONED FINDING OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 3. IN THE RESULT, THE APPEAL FILED BY REVENUE IS DI SMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 12 TH DAY OF AUGUST, 2016. SD/- SD/- ( RAJESH KUMAR ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI: DATED 12/08/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. / CONCERNED CIT 4. - / CIT (A) 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE BY ORDER / , / , ,