SHRI MANGESH V. TIWARI, MUMBAI V. ITO - 20(2)(2), MUMBAI

ITA 2587/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3955 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 31-12-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 04-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAVEEN GUPTA
• Assessee Lawyers: GAJENDRA GOLCHHA
• Keywords: Bogus purchase; Unexplained expenditure; Search and seizure; Share purchase agreement; Accommodation entries; Sham transactions
• Section: 69C; 234B; 147; 69; 148; 10

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI AMIT SHUKLA , JM AND SHRI RAJESH KUMAR , AM ./ I.T.A. NO. 2587 /MUM / 201 3 ( / ASSESSMENT YEAR : 20 03 - 04 ) SHRI MANGESH V. TIWARI 501, HOLY CROSS APARTMENTS, OFF PARSI PANCHAYAT ROAD, ANDHERI (EAST) MUMBAI 400069. / VS. INCOME TAX OFFICER 20(2)(2) PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI 400012 . ./ PAN : AADPT4528P ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI GAJENDRA GOLCHHA / RESPONDENT BY : SHRI NAVEEN GUPTA / DATE OF HEARING : 12 .1.2016 / DATE OF PRONOUNCEMENT : 26. 2.2016 / O R D E R PER RAJESH KUMAR , AM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 22/02/2013 OF COMMISSIONER OF INC OME TAX (APPEALS) - 31, MUMBAI (HEREINAFTER CALLED AS THE CIT(A) FOR ASSESSMENT YEAR 2003 - 04. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED CIT (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS.5,50,520/ - AS INCOME FROM UNDISC LOSED SOURCES. REASONS ASSIGNED BY HIM FOR DOING THE SAME ARE WRONG AND INSUFFICIENT. PROVISION OF THE ACT OUGHT TO HAVE BEEN PROPERLY CONSTRUCTED BEFORE DISALLOWING THE SAME. REGARDS BEING HAD TO THE ITA NO. 2587 / MUM/20 1 3 2 FACTS AND CIRCUMSTANCES OF THE CASE, THE SAID DISALLOWA NCE OUGHT NOT TO HAVE BEEN MADE. 2. THE LEARNED CIT (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 55,050/ - AS INCOME AS UNEXPLAINED EXPENDITURE U/S. 69C. REASONS ASSIGNED BY HIM FOR DOING THE SAME ARE WRONG AND INSUFFICIENT. PROVISIONS OF THE ACT OUGHT TO HAVE BEEN PROPERLY CONSTRUCTED BEFORE DISALLOWING THE SAME. REGARDS BEING HAD TO THE FACT AND CIRCUMSTANCES OF THE CASE, THE SAID DISALLOWANCE OUGHT NOT TO HAVE BEEN MADE. 3. THE LEANED CIT (APPEALS) HAS ERRED IN CONFIRMING THE INTEREST U/S. 234A AT RS. 1,759/ - U/S. 234B AT RS. 1,66,241/ - AND U/S. 234C AT RS. 545/ - . REASONS ASSIGNED BY HIM FOR DOING THE SAME ARE WRONG AND INSUFFICIENT. PROVISION OF THE ACT OUGHT TO HAVE BEEN PROPERLY CONSTRUCTED BEFORE DISALLOWING THE SAME. REGARDS BEING HAD TO THE FACT AND CIRCUMSTANCES OF THE CASE, THE SAID INTEREST OUGHT NOT TO HAVE BEEN CHARGED. 2. THE ISSUE RAISED IN THE FIRST GROUNDS OF APPEAL IS AGAINST THE CONFIRMATION AN ADDITION OF RS. 5,50,520/ - BY THE CIT(A) WHICH WAS MADE BY THE AO FOR THE REASON TH AT THE SAID INCOME WAS ACCRUING FROM THE TRANSACTION WITH M/S. GOLD STAR FINANCE PVT. LTD. COMPANY BELONGING TO MUKESH CHOKSI. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 06/10/2003 DECLARING THE INCOME OF RS. 1,13,824/ - . DURING THE YEAR THE ASSESSEE SOLD THE 8,200 EQUITY SHARES OF M/S. BUNIYAD CHEMICALS LTD. ON 21.11.2002 WHICH W ERE PURCHASED ON 20/04/2001 FOR RS. 5,205/ - THEREBY MAKING A LONG TERM CAPITAL GAIN OF RS. 5,50,520/ - WHICH WAS CLAIMED EXEMPT U/S 10 OF THE ACT. 2.1. THE CASE OF THE ASSESSEE WAS RE - OPENED U/S 147 R.W.S. 148 OF THE ACT A ND NOTICE U/S 148 OF THE ACT DATED 30/03/2010 WAS ISSUED AND SERVED ON THE ASSESSEE ON 31.3.2010.THE SAID RE - OPENING PROCEEDINGS WERE ENSUED AFTER DI T I NVESTIGATION VIDE L ETTER DATED 15.03.2010 INFORMED THE AO THAT DURING THE COURSE OF SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT ON MR MUKESH CHOKSHI AND HIS ASSOCIATED COMPANIES , THEY ADMITTED ITA NO. 2587 / MUM/20 1 3 3 TO HAVE INDULGED IN BOGUS BILLING OF SHARES SINCE MANY YEARS ON COMMISSION BAS IS AND THE ASSESSEES NAME APPEARED IN THE LIST OF BENEFICIARY OF M./S GOLDSTAR FINVEST PVT LTD.THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF TRANSACTIONS WITH M/S GOLDSTAR FINVEST PVT LTD. THE ASSESSEE VIDE LETTER DATED 23.08.2010 REPLIED THAT HE PU RCHASED 8200 EQUITY SHARES OF M/S BUNIYAD CHEMICALS LTD FOR RS. 5,205/ - ON 20.04.2001 THROUGH M/S GOLDSTAR FINVEST PVT LTD. AND AFTER PURCHASE , THESE SHARES WERE TRANSFERRED IN HIS NAME ON 30.06.2001 AND THEREAFTER THE SHARES WERE DE - MATERIALIZED BY CAN CELING THE PHYSICAL DELIVERY ON 16.11.2002 CREDITING THE SHARES IN THE D - MAT ACCOUNT MAINTAINED BY THE ASSESSEE WITH ITT CORPORATE SERVICES LTD. ULTIMATELY THESE SHARES WERE SOLD ON 21.11.2002. 2.2. THE LD AO ADDED THE LONG TERM GAIN OF RS. 5,50,520/ - TO THE INCOME OF THE ASSESSEE AS INCOME FROM OTHER SOURCES BY HOLDING THAT THE TRANSACTIONS OF ASSESSEES PURCHASE AND SHARES WERE BOGUS AND FRAUD AND WAS PART OF HAWALA RACKET FLOATED BY MR CKOKSHI AND HIS ASSOCIATE COMPANIES INCLUDING M/S GOLDSTAR FINVES T PVT LTD AND THE FACT WAS ALSO ADMITTED BY MR MUKESH CHOKSHI AND HIS GROUP COMPANIES DURING THE COURSE OF SEARCH U/S 132 OF THE ACT THAT THEY WERE CARRYING ON A HAWALA ROCKET BY SUPPLYING BOGUS BILLS FOR EQUITY SHARES FOR MAKING SPECULATIVE PROFIT, SHOR T TERM GAIN AND LONG TERM GAIN AND THE LIST OF BENEFICIARY INCLUDED THE NAME OF THE ASSESSEE. THE ENQUIRY BY THE AO FROM NATIONAL STOCK EXCHANGE REVEALED THAT NO TRANSACTION IN THE NAME OF THE ASSESSEE VIDE LETTER DATED 10.11.2010 AND PERUSAL OF THE D - MA T A/C SHOWED THAT THESE WERE OFF MARKET TRANSACTIONS. ULTIMATELY THE AO CONCLUDED THAT ALL THESE TRANSACTION WERE A COLOURABLE DEVICE AND AS SUCH SHAM TRANSACTIONS TO CHANNELIZE THE BLACK MONEY. ITA NO. 2587 / MUM/20 1 3 4 2.3. THE FAA ALSO CONFIRMED THE ADDITION MADE BY THE AO F OR THE REASONS THAT THE ASSESSEE FAILED TO PROVE THE SALE AND PURCHASE OF SHARES WHICH WAS DONE OFF MARKET THROUGH GOLDSTAR FINVEST PVT LTD WHICH WAS ENGAGED IN HAWALA SCAM AND THUS DOUBT ED THE EN TI RE PROCESS OF PURCHASE AND THE SALE WAS ALSO DIFFEREN T FROM ROUTINE ONE AS IT WAS MADE J UST FOUR DAYS BEFORE THE PHYSICAL SHARES WERE DE - MATERIALIZED . THE CIT(A) HELD THA T THIS WAS WEB OF DECEPTION AS MR MUKESH CHOKSHI HIMSELF ADMITTED DURING SEARCH THAT HE WAS INVOLVED IN ISSUING BOGUS BILLS OF SHARES PURCH ASE AND SALES OF LISTED COMPANIES ON THE PRICES THESE SCRIPS WERE TRADED IN THE EXCHANGES AND THE MERE FACT THAT THE SALES PROCEEDS WERE ROUTED THROUGH BANKING CHANNEL DID NOT ITSELF PROVE THE TRANSACTIONS IN THIS BACKGROUND 2.4. THE LD AR VEHEMENTLY SUB MITTED BEFORE US THAT THE CASE OF THE ASSESSEE WAS COVERED BY THE DECISIONS OF THE TRIBUNAL MUMBAI BENCHES NAMELY (I) ITO VS SMR AMINA I. RANGARI ITA NO 7543/MUM/2011 AY 2003 - 04, DATED 04.09.2015 (II)M/S R.C. ENTERPRISES VS ITO ITA NO. 3861/MUM/2012 AY 20 03 - 04 DATED 08.04.201, (III) MASUMA S TANKIWALA VS ITO ITA NO1867/MUM/2014 AY 2004 - 05 DATED 27.11.2014 IN WHICH THE IDENTICAL ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE UNDER SIMILAR FACTS. THE LD AR SUBMITTED THAT THE AO MADE THE ADDITIONS ON THE BASI S OF STATEMENT OF MR MUKESH CHOKSHI UPON SEARCH U/S 132 ON HIM AND HIS GROUP COMPANIES. ON THE BASIS OF LIST OF BENEFICIARIES EXTRACTED FROM THE COMPUTER OF M.S GOLDSTAR FINVEST PVT LTD THE ADDITIONS COUL D NOT BE MADE BY IGNORING AND DISREGARDING ALL OT HER FACTS SUCH AS THE SHARES WERE GENUINELY PURCHASED FOR A CONSIDERATION, DULY TRANSFERRED IN THE NAME OF THE ASSESSEE AND THEN D - MATERIALIZED IN THE NAME OF THE ASSESSEE BY REMOVING THE PHYSICAL DELIVERY AND SALE OF SUCH SHARES AND RECEIVING THE CONSID ERATION THROUGH BANKING CHANNEL. ITA NO. 2587 / MUM/20 1 3 5 2.5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORDS AND FIND ON THE BASIS OF FACTS IN THE PRESENT CASE AND VARIOUS CASE DECISIONS OF THE TRIBUNAL THAT SIMILAR ISSUE HAS BEEN DECIDED IN FAV OUR ASSESSEE IN THE VARIOUS DECISIONS CITED BY THE LD AR. IN THE CASE OF ITO VS SMR AMINA I. RANGARI ITA NO 7543/MUM/2011 AY 2003 - 04, DATED 04.09.2015 THE PARA 6 OF THE DECISION IS EXTRACTED AS UNDER: - 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.GF PL,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 FOL IO 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 MUKESH CHOKSI WITH REGARD TO THE TRANSACTIONS ENTERED IN TO BY HER.CONSIDERING THE ABOVE FACTS, WE ARE OF THE OP INION 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 BURD EN 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 (II)M/S R.C. ENTERPRISES VS ITO ITA NO. 3 861/MUM/2012 AY 2003 - 04 DATED 08.04.201 PARA 11 IS REPRODUCED AS UNDER: - 11. THE FOREGOING DISCUSSIONS WOULD SHOW THAT THE TAX AUTHORITIES HAVE PROCEEDED TO ASSESS THE AMOUNT OF RS.1.00 CRORES ON ITA NO. 2587 / MUM/20 1 3 6 SUSPICION, CONJECTURES AND SURMISES. FURTHER THEY HAVE NOT DISPROVED THE VARIOUS DOCUMENTS FURNISHED BY THE ASSESSEE IN SUPPORT OF PURCHASE AND SALE OF SHARES BY CONDUCTING SPECIFIC ENQUIRIES WITH THE BROKERS WHO HAD PURCHASED AND SOLD THE SHARES ON BEHALF OF THE ASSESSEE. THE STRONG FACT RELATING TO THE DEMATERI ALIZATION OF SHARES WAS NOT DISPROVED BY THE TAX AUTHORITIES. THE FACT OF PURCHASE OF SHARES WAS DISCLOSED BY THE ASSESSEE IN ITS RETURN OF INCOME FILED FOR AY 2002 - 03. THE SOURCE OF PURCHASE WAS THE SPECULATION PROFIT ARISING ON SALE OF CERTAIN SHARES AND THE SAID SPECULATION PROFIT WAS ALSO ASSESSED IN AY 2002 - 03. THE ASSESSEE HAS DEMATERIALIZED THE SHARES THROUGH M/S RBK SHARE BROKING LTD, ONE OF THE DEPOSITORY PARTICIPANTS OF M/S CDSL. WITHOUT AVAILABILITY OF PHYSICAL SHARES, ONE CANNOT SET THEM FOR DE - MATERIALISATION. THESE FACTUAL ASPECTS HAVE NOT BEEN DISPROVED BY THE TAX AUTHORITIES. THE SHARES WERE SOLD IN THE OFF - MARKET AND HENCE THE TRANSACTION OF SALES WAS NOT ROUTED THROUGH THE STOCK EXCHANGE. THE SHARES WERE HELD IN THE NAME OF THE PARTNERS ON BEHALF THE ASSESSEE FIRM AND HENCE, NATURALLY, THE NAME OF ASSESSEE FIRM WOULD NOT FIND PLACE IN THE TRANSACTIONS. UNDER THESE SET OF FACTS, THE LETTERS ISSUED BY THE STOCK EXCHANGE COULD NOT BE RELIED UPON BY THE TAX AUTHORITIES. THE CASE LAW RELIED UPON BY THE LD CIT(A) WERE ALSO NOT FOUND TO BE SUPPORTING THE CASE OF THE TAX AUTHORITIES. WE HAVE ALSO NOTICED THAT THE ASSESSING OFFICER HAS ASSESSED THE LONG TERM CAPITAL GAIN ARISING ON SALE OF IMPUGNED SHARES. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THE TAX AUTHORITIES ARE NOT JUSTIFIED IN SUSPECTING THE CLAIM OF PURCHASE AND SALE OF SHARES AND ALSO ASSESSING THE AMOUNT OF RS.1.00 CRORE AS UNDISCLOSED INCOME OF THE ASSESSEE. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND DIREC T THE ASSESSING OFFICER TO DELETE THE ASSESSMENT OF RS1.00 CRORE MADE IN THE HANDS OF THE ASSESSEE. (III) MASUMA S TANKIWALA VS ITO ITA NO1867/MUM/2014 AY 2004 - 05 DATED 27.11.2014 PARA 5 IS EXTRACTED BELOW: - 5. AFTER HEARING THE LEARNED DR AND AFTER P ERUSING THE MATERIAL PLACED ON MY RECORD, I AM OF THE OPINION THAT THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE EARLIER APPEAL DECIDED BY THE TRIBUNAL ON SIMILAR FACTS IN THE CASE OF SHRI ANANTRAI B SHAH VS. ITO, VIDE ORDER DATED 14.12.2012 IN ITA NO.1 842/MUM/2012 FOR A.Y 2003 - 04, COPY OF WHICH HAS BEEN PLACED ON THE RECORD AND WAS ALSO AVAILABLE WITH THE LEARNED DR. IN THE SAID CASE SIMILAR ADDITION OF RS.1,76,037/ - WAS MADE ON ACCOUNT OF ALLEGED SALE OF SHARES OF M/S. BUNIYAD CHEMICALS LIMITED THROUG H GOLDSTAR FINVEST PVT. LTD., AND ITA NO. 2587 / MUM/20 1 3 7 THE ADDITION WAS DELETED BY THE TRIBUNAL WITH THE FOLLOWING OBSERVATIONS : - 7. AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD, I FOUND THAT THE ASSESSEE HAS DISCHARGED HIS ONUS BY FILING COMPLETE DET AILS IE. PURCHASE OF SHARES, SHARE CERTIFICATE, DEMAT ACCOUNT, CONFIRMATION FROM BUNIYAD CHEMICALS LIMITED OF WHOSE SHARES WERE PURCHASED. CONSIDERATION WAS PAID THROUGH ACCOUNT PAYEE CHEQUE, THEREFORE, THERE IS NO MATERIAL AGAINST THE ASSESSEE FROM WHICH IT CAN BE SAID THAT THE TRANSACTION ENTERED BY THE ASSESSEE WAS NOT GENUINE. IT IS FURTHER NOTICED THAT IN CASE OF KATARIA KETAN ISHWARLAL (SUPRA), THE ADDITIONS WERE MADE ON THE BASIS OF STATEMENT OF SHRI MUKESH CHOKSHI. THE TRIBUNAL BY NOTING THAT MR. CH OKSHI HAS ISSUED A GENERAL STATEMENT AND IT CANNOT BE APPLIED IN EACH AND EVERY CASE, THERE WAS NO DIRECT EVIDENCE AGAINST THAT ASSESSEE. ACCORDINGLY, THE AMOUNT OF ADDITION MADE IN THAT CASE WAS DELETED BY THE TRIBUNAL HERE FACTS ARE SIMILAR. NEITHER THE STATEMENT OF MUKESH CHOKSHI WAS PROVIDED TO THE ASSESSEE NOR THERE WAS ANY CROSS EXAMINATION OF MUKESH CHOKSHI, WHEREAS CONTRARY TO THAT THE ASSESSEE HAS FILED ALL THE DETAILS REQUIRED FOR PROVIDING FOR PURCHASE OF SHARES WERE GENUINE. IT IS NOT A CASE OF THE DEPARTMENT, WHATEVER THE CONSIDERATION WAS PAID BY THE ASSESSEE THROUGH CHEQUE FOR PURCHASING OF SHARES HAVE COME BACK TO THE ASSESSEE UNDER THE GARB OF BOGUS PURCHASES AS THERE IS NO EVIDENCE AGAINST THE ASSESSEE. KEEPING IN MIND ALL THESE FACTS AND C IRCUMSTANCES OF THE CASE, I HOLD THAT THE ADDITION MADE AND SUSTAINED ON ACCOUNT OF PURCHASE OF SHARES ONLY ON THE BASIS OF STATEMENT OF MUKESH CHOKSHI, WAS NOT JUSTIFIED. THEREFORE, THE SAME IS DELETED. 5. IN THIS VIEW OF THE SITUATION, RESPECTFULLY FO LLOWING THE AFOREMENTIONED ORDER OF THE TRIBUNAL, I DELETE THE ADDITION. 2. 6. WE THEREFORE RESPECTFULLY FOLLOWING THE DECISIONS OF THE COORDINATE BENCHES DECIDE THE ISSUE IN FAOUR OF THE ASSESSEE BY DELETING THE ADDITIONS OF RS. 5,50,520/ - .THE AO IS DIRE CTED ACCORDINGLY. 3 . THE GROUND NO .2 IS AGAINST THE CONFIRMATION OF ADDITION OF RS. 55050/ - AS UNEXPLAINED EXPENDITURE U /S 69C FOR THE COMMISSION PAID TO THE BROKERAGE COMPANY FOR ARRANGING BOGUS BILLS . THE FACTS OF THE CASE ARE THAT THE AO ADDED RS. 5,50,520/ - AS INCOME FROM OTHER SOURCES WHICH WAS LONG TERM CAPITAL GAIN FROM SHARES BY TREATING THE SAME AS ITA NO. 2587 / MUM/20 1 3 8 BOGUS FOR THE REASONS THAT THE COMPANY M/S GOLDSTAR FINVEST PVT LTD WAS A GROUP COMPANY OF MR MUKESH CHOKSHI WHICH WAS INVOLVED IN ISSUING BOGUS BILLS FOR PURCHASE AND SALE OF SHARES FOR SHORT TERM AND LONG TERM GAIN ON COMMISSION BASIS AND ADDED RS. 55,050/ - AS UNEXPLAINED EXPENDITURE TO THE INCOME OF THE ASSESSEE WHICH WAS ALSO UPHELD BY THE FAA. 3 .1. WE HAVE HEARD THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIALS ON RECORDS. AFTER HEARING BOTH THE AR AND DR WE FIND THAT THE BASIS OF ADDITIONS BY THE AO IS COMPLETELY UNFOUNDED AND THE AO MADE THE ADDITION ON THE BASIS OF JUST CONJECTURE AND SURMISES THAT THE ASSESSEE HAD TRANSACTED THROUGH M/S G OLDSTAR FINVEST PVT LTD WHICH WAS A GROUP COMPANY OF MR . MUKESH CHOKSHI A HAWALA DEALER. THE LD AR SUBMITTED BEFORE US THAT NO MATERIALS HAS BEEN BROUGHT ON RECORDS BY THE AO WHILE MAKING ADDITIONS BY JUST GIVING ONE LINE (LAST LINE) OBSERVATION ON PAGE 5 OF THE ASSESSMENT ORDER. WE FIND MERIT IN THE ARGUMENTS OF THE LD AR THAT THERE IS NO BASIS FOR THE SAID ADDITION U/S 69 OF THE ACT AND ORDER OF FAA CONFIRMING THE SAME IS ALSO WRONG. IN VIEW OF OUR OBSERVATION IN HEREINABOVE WE ALLOW THIS GROUND IN FAVO UR OF ASSESSEE BY DELETING THE ADDITION OF RS. 55,050/ - .THE AO IS DIRECTED ACCORDINGLY. 4. THE GROUND NO.3 IS CONSEQUENTIAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. 5. IN RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE O PEN COURT ON 26TH FEB, 2016 . SD SD ( AMIT SHUKLA ) ( RAJESH KUMAR ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 26 /02/2016 . . ./ SRL , SR. PS ITA NO. 2587 / MUM/20 1 3 9 / COPY OF THE ORDER FORWARDED TO : 1 . / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / B Y ORDER, TRUE COPY / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI