YAMUNA ESTATE P.LTD, MUMBAI V. ITO WD 8(3)(4), MUMBAI

ITA 2672/MUM/2012

• Counselvise Citation: 267219914 RSA 2012
• Duration Of Justice: 3 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 14-08-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 20-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR BOARA
• Assessee Lawyers: VINOD RAWAL
• Keywords: Reopening of assessment; Unexplained cash credit; Loose papers; Document seized; Share purchase agreement; Accommodation entries; Reason to believe
• Section: 153A; 147; 131; 148; 132; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.2672/M/2012 ASSESSMENT YEAR: 2003-04 M/S. YAMUNA ESTATE PVT. LTD., SHUBHAM CENTRE-1, 3 RD FLOOR, 491, CARDINAL GRACIOUS ROAD, CHAKALA, ANDHERI (EAST)- 400 099 PAN: AACCY 0425C VS. I NCOME TAX OFFICER , WARD - 8(3)(4), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PRAKASH CHAND YADAV, A.R. & SHRI VINOD RAWAL, A.R. REVENUE BY : SHRI VIJAY KUMAR BOARA, D.R. DATE OF HEARING : 21.08.2015 DATE OF PRONOUNCEMENT : 09.09.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 09.02.2012 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [(HEREINAFTER REFERRED TO AS CIT(A)] RELEVANT TO ASSESSMENT YEAR 2003-04. THE ASSESSEE THROUGH THE GROUNDS OF APPEAL HAS AGITATED THE ADDI TION OF RS.41,25,550/- U/S. 68 OF THE INCOME TAX ACT. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN C ONFIRMING THE REOPENING OF THE ASSESSMENT U/S 147 MADE BY THE ASS ESSING OFFICER WITHOUT APPRECIATING THE FACTS THAT THE SAME WAS DO NE ON THE GENERAL AND VAGUE INFORMATION OF THE INVESTIGATION WING. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. COMMISSIONER ITA NO.2672/M/2012 M/S. YAMUNA ESTATE PVT. LTD. 2 OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION MADE U/S 68 OF INCOME TAX ACT,1961 AS UNEXPLAINED CREDITS WITHOUT APPRECIATING THE FACTS OF THE CASE. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN C ONFIRMING THE DISALLOWANCE OF SET OFF OF BUSINESS LOSS BY APPLYIN G EXPLANATION TO SECTION 73 (4) OF INCOME TAX ACT,1961 WITHOUT APPRE CIATING THE FACTS OF THE CASE. 4. THE APPELLANT CRAVES LEAVE TO ALTER, AMEND, MODIFY OR SUBSTITUTE ANY GROUND / GROUNDS AND TO ADD ANY NEW GROUND OR GROUN DS ON OR BEFORE THE APPEAL IS DISPOSED OFF. IN ADDITION TO THE ABOVE GROUNDS OF APPEAL, THE ASS ESSEE HAS ALSO TAKEN THE ADDITIONAL LEGAL GROUNDS, WHICH READ AS UNDER: A. WHETHER ON THE FACTS AND UNDER THE CIRCUMSTANCES O F THE CASE THE ORDER OF ASSESSMENT AS AFFIRMED BY THE CIT(A) I S NOT VOID AB INITIO AS THE SAME HAS BEEN PASSED UNDER SECTION 147 INSTEAD OF SECTION 153C? B. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSMENT FRAMED AND CONFIRMED BY THE CIT (A) IS NOT BARRED BY LIMITATION, IN VIEW OF THE NON OBSTANTIVE PROVISION S OF SECTION 153C, WHICH ARE APPLICABLE FOR THE CASES OF THOSE PERSONS IN RESPECT OF WHOM SOME MATERIAL IS FOUND IN SEARCH? C. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, WHETHER THE ASSESSMENT FRAMED UNDER SECTION 147 IS NOT WITHOUT JURISDICTION AS NO SANCTION HAS BEEN TAKEN FROM THE AUTHORITIES, AS EN VISAGED IN SECTION 151, BEFORE ASSUMING JURISDICTION? 3. THE FACTS OF THE CASE AS BROUGHT OUT FROM THE OR DER OF THE LD. CIT(A) ARE THAT A SEARCH & SEIZURE ACTION U/S. 132 WAS UNDERTA KEN IN THE CASE OF M/S. MAHASAGAR SECURITIES P. LTD. AND ITS GROUP COMPANIE S INCLUDING M/S. GOLD STAR FINVEST P. LTD. ON 25.11.2009. A STATEMENT OF SHRI MUKESH CHOKSHI, DIRECTOR OF M/S. MAHASAGAR SECURITIES P. LTD. WAS RECORDED W HEREIN MUKESH CHOKSHI HAD EXPLAINED IN DETAIL THE MODUS OPERANDI OF THE A CCOMMODATION ENTRIES RACKET BEING RUN BY HIM BY FLOATING SOME 34 COMPANI ES AND ADMITTED TO BE IN BUSINESS OF PROVIDING THE BOGUS ACCOMMODATION ENTRI ES FOR PROVIDING BOGUS ITA NO.2672/M/2012 M/S. YAMUNA ESTATE PVT. LTD. 3 SPECULATION PROFIT/LOSS, BOGUS SHORT TERM/LONG TERM CAPITAL GAIN/LOSS ETC. SINCE THE ASSESSEE HAD MADE SALES AND PURCHASES OF SHARES THROUGH M/S. GOLD STAR FINVEST P. LTD, WHICH WAS ALSO ONE OF THE COMPANIES WHICH HAD REPORTEDLY PROVIDED THE ACCOMMODATION ENTRY, THEREFORE, THE PR OFIT OF RS. RS.41,25,550/- ON SALE OF SHARES WAS TREATED TO BE UNEXPLAINED CRE DIT WHICH WAS ADDED BY THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE A O) U/S.68 INTO THE INCOME OF THE ASSESSEE. AGGRIEVED BY THE ABOVE SAID ADDITIONS , THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). 4. BEFORE THE LD. CIT(A), IT HAD BEEN CONTENDED BY THE ASSESSEE THAT CERTAIN SHARES WERE PURCHASED THROUGH SUB-BROKER M/ S. GOLD STAR FINVEST PVT. LTD AND THEY WERE TRANSFERRED IN NAME OF ASSESSEE I N THE COMPANIES RECORDS AND THEN SOLD THROUGH THE SAME SUB-BROKER M/S. GOLD STAR FINVEST PVT. LTD. AND IN THE PROCESS, THE ASSESSEE COMPANY HAD EARNED PRO FITS OF RS.41,25,550/-. THE SHARES PURCHASED AND SOLD WERE BACKED BY THE CONTRA CT NOTES/ PURCHASE AND SALE INVOICES ISSUED BY M/S. GOLD STAR FINVEST PVT. LTD. WHO WAS REGISTERED MEMBER OF STOCK EXCHANGE AND HAVING SEBI REGISTRATION NUMB ER AND THAT THE SALE PROCEEDS WERE RECEIVED THROUGH CHEQUES ONLY. THAT A LL THE DOCUMENTS WERE SUBMITTED BEFORE THE AO AND HE WAS SATISFIED ABOUT THE TRANSACTIONS AND DID NOT RAISE ANY QUERY IN THIS RESPECT. IT WAS THEREFORE C LAIMED BY THE ASSESSEE THAT THE TRANSACTIONS WERE GENUINE TRANSACTIONS ONLY. THE AS SESSEE BEFORE THE LD. CIT(A) ALSO SUBMITTED THE CONFIRMATION OF SH. MUKES H CHOKSHI ABOUT THE SHARE TRANSACTIONS DONE THROUGH HIS SHARE BROKING COMPANY . THE LD. CIT(A) REFERRED THE MATTER TO THE AO FOR HIS REMAND REPORT ON THE S AID EVIDENCE. THE AO IN THE REMAND PROCEEDINGS, HOWEVER, INSISTED THE ASSESSEE TO PRODUCE SAID MR. CHOKSHI FOR EXAMINATION AS A WITNESS BEFORE HIM. TH E ASSESSEE SUBMITTED THAT IT HAD REQUESTED MR. CHOKSHI TO APPEAR BEFORE THE AO, BUT HE COULD NOT FORCE HIS ATTENDANCE BEFORE THE AO. THE AO THEREFORE REPORTED THAT THE ASSESSEE HAD NOT ITA NO.2672/M/2012 M/S. YAMUNA ESTATE PVT. LTD. 4 COMPLIED WITH THE DIRECTIONS TO PRODUCE MR. CHOKSHI BEFORE HIM, THEREFORE THE MATTER BE DECIDED ON MERITS. THE LD. CIT(A) HELD TH AT SINCE THE ASSESSEE HAD FAILED TO PRODUCE MR. CHOKSHI BEFORE THE AO, HENCE NO RELIANCE COULD BE PLACED ON THE CONFIRMATION RELATING TO THE SHARE TR ANSACTIONS GIVEN BY MR. CHOKSHI. HE THEREFORE HELD THAT THE TRANSACTIONS WE RE NOT GENUINE AND CONFIRMED THE ADDITIONS MADE BY THE AO. THE ASSESSE E IS THUS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE RECORD. THE LD. AR HAS VEHEMENTLY CONTESTED THE RE OPENING OF THE ASSESSMENT PROCEEDINGS U/S 147 OF THE ACT. HE HAS CONTENDED THAT AS PER THE PROVISIONS OF SECTION 153C OF THE ACT READ WITH SECTION 153A OF T HE ACT, THE REOPENING OF THE ASSESSMENT COULD NOT HAVE BEEN DONE BY THE AO UNDER SECTION 147 OF THE ACT BUT ONLY UNDER SECTION 153C OF THE ACT. HE HAS FUR THER CONTENDED THAT AS PER THE PROVISIONS OF SECTION 153C, THE AO COULD HAVE R EQUIRED THE ASSESSEE TO FURNISH THE RETURNS OF THE INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO FINANCIAL YEAR IN WHICH THE SEARCH WAS CONDUCTED. THEREAFTER, HE SUBMITTED THAT THE S EARCH YEAR IN THE CASE OF THE ASSESSEE WAS 2010-11 AND THE AO COULD HAVE CALLED U PON THE ASSESSEE TO FURNISH RETURNS OF INCOME OF THE EARLIER SIX ASSESS MENT YEARS I.E. UP TO THE ASSESSMENT YEAR 2004-05. HOWEVER, SINCE THE ASSESSM ENT YEAR IN QUESTION IS 2003-04, THE AO COULD NOT HAVE, EVEN, REOPENED THE ASSESSMENT PROCEEDINGS UNDER SECTION 153C OF THE ACT. HENCE, THE AO, TO O VERCOME THE APPLICATION OF PROVISIONS OF SECTION 153C, HAS WRONGLY REOPENED TH E ASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE ACT. HE HAS CONTENDED THA T IT HAS BEEN SPECIFICALLY PROVIDED UNDER THE PROVISIONS OF SECTION 153A THAT IN SEARCH CASES, THE REASSESSMENT CAN ONLY BE DONE EITHER UNDER SECTION 153A IN CASE OF SEARCHED PERSON OR UNDER SECTION 153C IN RELATION TO PERSON OTHER THAN THE SEARCHED PERSON, IF ANY, DOCUMENTS RELATING TO THAT OTHER PE RSON ARE FOUND IN THE PREMISES ITA NO.2672/M/2012 M/S. YAMUNA ESTATE PVT. LTD. 5 OF THE SEARCHED PERSON. THE LD. A.R. HAS FURTHER CONTENDED THAT IN THE REAS ONS RECORDED FOR REOPENING OF THE ASSESSMENT, THE AO HAS MENTIONED THAT HE HAD REASON TO BELIEVE THAT THE ASSESSEE COMPANY HAD CREATED AND CLAIMED BOGUS LOSS ES ON ACCOUNT OF SALE AND PURCHASE OF SHARES AND CLAIMED SETOFF OF THE SAME A GAINST INCOME GENERATED. HOWEVER, IN THE ASSESSMENT PROCEEDINGS, THE AO HAD MADE THE ADDITION IN RESPECT OF PROFIT ON SALE OF SHARES TREATING THE SA ME AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. THE LD. AR , THEREFOR E, RELYING UPON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF C IT VS. JET AIRWAYS 331 ITR 236 (BOM.) HAS CONTENDED THAT IF IN A CASE, THE AO HAS FOUND A REASON TO BELIEVE ABOUT AN INCOME WHICH IN HIS VIEW HAS ESCAP ED ASSESSMENT BUT ULTIMATELY IS NOT FOUND TO HAVE ESCAPED ASSESSMENT AND NO ADDITION IS MADE ON THAT ACCOUNT, THEN IT IS NOT OPEN TO THE AO TO INDE PENDENTLY ASSESS SOME OTHER INCOME. THE LD. AR HAS FURTHER VEHEMENTLY CONTENDED THAT EV EN THE LIMITATION FOR REOPENING OF ASSESSMENT UNDER SECTION 147 HAD EXPIR ED ON THE DATE THE AO HAD SOUGHT TO REOPEN THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION. THE LD. D.R. ON THE OTHER HAND, HAS CONTENDED THAT THE ASSESSMENT IN THIS CASE HAS RIGHTLY BEEN REOPENED UNDER SECTION 147 OF THE ACT. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND HAV E ALSO GONE THROUGH THE RECORDS. SO FAR AS THE FIRST CONTENTION OF THE LD. A.R. THAT THE REOPENING IN THIS CASE COULD HAVE BEEN DONE UNDER SECTION 153C ONLY B UT NOT UNDER SECTION 147 OF THE ACT IS CONCERNED, WE FIND THAT DURING THE CO URSE OF SEARCH IN THE CASE OF M/S. MAHASAGAR SECURITIES PVT. LTD. AND ITS GROUP C OMPANIES, THE DOCUMENTS FOUND IN THEIR PREMISES BELONGED TO THE SEARCHED CO MPANIES AND NOT TO THE ASSESSEE. THE ASSESSEES NAME FIGURED IN THE LIST OF PERSONS TO WHOM THE SAID SEARCHED PERSON HAD ALLEGEDLY PROVIDED ACCOMMODATIO N ENTRIES. UNDER SUCH CIRCUMSTANCES, IT CAN BE SAFELY SAID THAT THE INCRI MINATING DOCUMENTS BELONGED ITA NO.2672/M/2012 M/S. YAMUNA ESTATE PVT. LTD. 6 TO THE SEARCHED PERSON BUT SOMEHOW RELATED TO THE A SSESSEE AS THE NAME OF THE ASSESSEE HAD FIGURED IN THE LIST OF PERSONS. THE H ONBLE GUJARAT HIGH COURT IN THE CASE OF VIJAYBHAI N. CHANDRANI VS. ACIT (2011) 333 ITR 436 HAD THE OCCASION TO DEAL WITH THIS LEGAL ISSUE. THE HONBLE HIGH COURT ANALYZING AND INTERPRETING THE PROVISIONS OF SECTION 153A, 153B A ND 153C HAS HELD THAT THE PROVISIONS OF SECTION 153C ARE QUITE DIFFERENT FROM THAT OF SECTION 158BD. THE HONBLE HIGH COURT HAS OBSERVED THAT AS PER THE PRO VISIONS OF SECTION 153C, WHERE THE AO IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENT SE IZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A, HE SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR RE-ASSESS INCOME OF SUCH OTHER PERSON, WHEREAS UNDE R SECTION 158BD IF THE AO IS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER S ECTION 132 OR WHOSE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS WERE REQUISITIONED UNDER SECTION 132A, HE COULD PROCEED AGAINST SUCH OTHER PERSON UN DER SECTION 158BC. THE HONBLE GUJARAT HIGH COURT, THEREFORE, HAS HELD THA T THE CONDITION PRECEDENT FOR ISSUING NOTICE UNDER SECTION 153C IS THAT THE M ONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENT SEIZED OR REQUISITIONED SHOULD BELONG TO SUCH OTHER PERSON. IF THE ABOVE REQUIREMENT IS NOT SATISFIED RECOURSE CANNOT BE HEARD TO THE PROVI SIONS OF SECTION 153C. THE HONBLE HIGH COURT HAS FURTHER OBSERVED THAT THOUGH IN THE LOOSE PAPERS RECOVERED DURING THE SEARCH PROCEEDINGS, THERE WAS A REFERENCE TO THE PETITIONER IN AS MUCH AS HIS NAME WAS REFLECTED IN THE LIST. HOWEVER, THE LOOSE PAPERS DID NOT BELONG TO THE PETITIONER. THE HONBLE HIGH COU RT, THEREFORE, HAS HELD THAT UNDER SUCH CIRCUMSTANCES, THE CONDITION PRECEDENT F OR ISSUANCE OF NOTICE UNDER SECTION 153C WAS NOT FULFILLED AND ANY ACTION TAKEN UNDER SECTION 153C OF THE ACT STOOD VITIATED. THE HONBLE DELHI HIGH COURT I N THE CASE OF PEPSICO INDIA ITA NO.2672/M/2012 M/S. YAMUNA ESTATE PVT. LTD. 7 HOLDING (P.) LTD. VS. ACIT (2015) 228 TAXMAN 116 (D EL.) HAS HELD THAT THE AO SHOULD NOT CONFUSE THE EXPRESSION BELONGS TO WITH THE EXPRESSION RELATES TO OR REFERS TO. THE HONBLE HIGH COURT HAS HELD TH AT UNLESS IT IS ESTABLISHED THAT THE DOCUMENT IN QUESTION DOES NOT BELONG TO THE SEA RCHED PERSON THE QUESTION OF INVOKING SECTION 153C DOES NOT ARISE. ADMITTEDLY, THE DOCUMENTS IN THE CASE IN HAND BELON GED TO THE SEARCHED PERSON. UNDER SUCH CIRCUMSTANCES, IN VIEW OF THE PROPOSITIO N OF LAW LAID DOWN BY THE HONBLE GUJARAT HIGH COURT (SUPRA) AND BY THE HONB LE DELHI HIGH COURT (SUPRA) WHICH HAS BEEN FURTHER FOLLOWED BY VARIOUS BENCHES OF THE TRIBUNAL, THE REOPENING IN THE CASE IN HAND HAS RIGHTLY BEEN DONE UNDER SECTION 147 OF THE ACT BY THE AO. IN OUR HUMBLE VIEW, THE CASE LAWS R ELIED UPON BY THE ASSESSEE ARE DISTINGUISHABLE IN THE LIGHT OF THE DECISIONS O F THE HONBLE GUJARAT HIGH COURT (SUPRA) AND THAT OF THE HONBLE DELHI HIGH CO URT (SUPRA) SO FAR AS THE NEXT CONTENTION OF THE LD. A.R. THAT IN THE REASONS RECORDED, THE AO HAD MENTIONED THAT HE HAD BELIEVED THAT THE ASSE SSEE HAD CLAIMED BOGUS LOSSES WHEREAS IN THE ASSESSMENT PROCEEDINGS, THE A O HAD ASSESSED PROFITS FROM THE SALE OF SHARES AS UNEXPLAINED CASH CREDITS AND THEREFORE THE AO HAS NOT MADE THE ADDITION ON THE BASIS OF REASONS RECOR DED IS CONCERNED, WE FIND THAT THE SAID CONTENTION OF THE LD. A.R. ALSO CANNO T BE ACCEPTED. THE REOPENING IN THIS CASE HAS BEEN DONE ON THE BASIS OF LOOSE PA PERS CONTAINING THE NAMES OF PERSONS IN WHICH THE NAME OF THE ASSESSEE WAS ALSO MENTIONED TO WHOM THE SAID SEARCHED COMPANY HAD ALLEGEDLY PROVIDED ACCOMM ODATION ENTRIES. THE BASIS OF FORMING OF THE BELIEF BY THE AO WAS THE AL LEGED ACCOMMODATION ENTRIES PROVIDED TO THE ASSESSEE. IT IS NOT A CASE WHERE THE ADDITION HAS BEEN MADE BY THE AO IN RELATION TO SOME OTHER INCOME OR OTHER ISSUE BUT ON THE BASIS OF THE SAME ISSUE AND IN RELATION TO THE TRANSACTIO NS DONE BY THE ASSESSEE THROUGH THE SEARCHED PERSON/BROKER FOR SALE AND PUR CHASE OF SHARES. UNDER SUCH CIRCUMSTANCES, THE CASE LAW CITED BY THE ASSES SEE IN THE CASE OF JET ITA NO.2672/M/2012 M/S. YAMUNA ESTATE PVT. LTD. 8 AIRWAYS (SUPRA) IS NOT APPLICABLE. SO FAR AS THE CONTENTION THAT THE LIMITATION PERIO D HAD EXPIRED FOR REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE AC T IS CONCERNED, WE DO NOT FIND ANY MERIT IN THE SAID CONTENTION. THE INCOME WHICH THE AO BELIEVED TO HAVE ESCAPED ASSESSMENT WAS ABOVE RS.1 LAKH I.E. RS .5 LAKH WHICH IS MORE THAN RS. 1 LAKH. AS PER THE PROVISIONS OF SECTION 149, THE REASSESSMENT CAN BE DONE BEYOND THE PERIOD OF SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR IF THE INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSE SSMENT AMOUNTS TO RS. 1 LAKH OR MORE. UNDER SUCH CIRCUMSTANCES, THIS CONTE NTION OF THE LD. A.R. IS NOT ACCEPTABLE. THE LD. AR HAS NOT ADDRESSED ANY ARGUMENT IN RELATI ON TO ADDITIONAL LEGAL GROUND THAT NO SANCTION HAS BEEN TAKEN FROM THE AUT HORITIES, AS ENVISAGED IN SECTION 151 FOR REOPENING OF THE ASSESSMENT. EVEN F ROM THE RECORD, WE DO NOT FIND THAT ANY SUCH ISSUE HAS BEEN EVER RAISED BY TH E ASSESSEE BEFORE LOWER AUTHORITIES. IN THE ABSENCE OF ANY SPECIFIC EVIDENC E IN CORROBORATION OF THE CONTENTION RAISED, WE DO NOT FIND ANY MERIT IN THIS PLEA OF THE ASSESSEE. 7. WE FURTHER FIND THAT THE ISSUE OF REOPENING OF T HE ASSESSMENT IN THE CIRCUMSTANCES AS THAT OF THE CASE OF THE ASSESSEE I S SQUARELY COVERED BY VARIOUS OTHER DECISIONS OF THE TRIBUNAL IN THE CASES OF OTH ER PERSONS WHOSE NAME ALSO FIGURED DURING THE SEARCH ACTION IN THE GROUP COMPA NIES OF SHRI MUKESH CHOKSHI. THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE O F SMT. JYOTI D. SHAH ITA NO.1843/M/2012 DECIDED ON 18.12.14, IN ALMOST IDENT ICAL FACTS, WHILE ADJUDICATING THE ISSUE OF REOPENING ON THE BASIS OF STATEMENT OF SHRI MUKESH CHOKSHI AND FURTHER ON THE BASIS OF DETAILS OBTAINE D DURING THE SEARCH BY THE INVESTIGATION WING, HAS HELD THAT UNDER THE CIRCUMS TANCES THE AO WAS HAVING SUFFICIENT REASON TO BELIEVE THAT THERE WAS AN ESCA PEMENT OF INCOME AND ACCORDINGLY HE WAS JUSTIFIED IN REOPENING THE ASSES SMENT UNDER SECTION 147 OF ITA NO.2672/M/2012 M/S. YAMUNA ESTATE PVT. LTD. 9 THE ACT. THE RELEVANT FINDINGS OF THE TRIBUNAL REL ATING TO THE ISSUE OF REOPENING IN THE CASE OF SMT. JYOTI D. SHAH (SUPRA) FOR THE SAKE OF CONVENIENCE ARE REPRODUCED AS UNDER: 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PE RUSED. THERE WAS A SEARCH UNDERTAKEN IN THE CASE OF M/S MAHASAGAR SECURITIES P.LTD. AND ITS GROUP COMPANIES INCLUDING M/S.GOLD STAR FINVEST P.LTD. ON 25.11.200 9. A STATEMENT OF SHRI MUKESH CHOKSHI, DIRECTOR OF M/ S. MAHASAGAR SECURITIES P.L TD. WAS RECORDED DURING THE SEARCH WHEREIN MUKESH CHOKSHI HAD EXPLAINED IN DETA IL THE MODUS OF OPERATION OF THE ACCOMMODATION ENTRIES RACKET BEING RUN BY HIM B Y FLOATING SOME 34 COMPANIES AND ADMITTED TO BE IN BUSINESS OF PROVIDING THE BOG US ACCOMMODATION ENTRIES. FURTHER ENQUIRIES BY THE INVESTIGATION WING ALSO CO NFIRMED THAT MANY OF THE SUB- BROKING COMPANIES FLOATED BY SHRI MUKESH CHOKSHI AC TUALLY DID NOT CARRY OUT THE TRANSACTIONS THROUGH THE MAIN' BROKERS FOR WHOM THE Y WERE CLAIMING TO BE SUB- BROKERS AND ALL THE BILLS RAISED BY THEM WERE ILLEG AL, UNAUTHORIZED AND AGAINST THE PROVISIONS OF THE SCRA ACT, 1956. ON THE BASIS OF T HE DETAILS OBTAINED DURING THE SEARCH BY THE INVESTIGATION WING, IT WAS NOTED THAT THE ASSESSEE ALSO HAD MADE SALES AND PURCHASES OF SHARES OF M/S BUNIYAD CHEMICALS LT D THROUGH M/S. GOLD STAR FINVEST P.LTD WHICH HAD PROVIDED THE ACCOMMODATION ENTRIES. M/S BUNIYAD CHEMICALS LTD AS WELL AS M/ S. GOLD STAR FINVEST P. LTD WERE FLOATED BY MUKESH CHOKSHI ONLY. SINCE IT WAS ADMITTED BY MUKESH CHOKS HI THAT HE WAS PROVIDING ACCOMMODATION ENTRIES ONLY THROUGH ITS VARIOUS COMP ANIES, ACCORDINGLY A NOTICE U/S. 148 WAS ISSUED AFTER RECORDING THE REASONS. 4. AS PER THE REASONS RECORDED, WE FOUND THAT THE A O WAS HAVING SUFFICIENT REASONS TO BELIEVE THAT THERE WAS AN ESCAPEMENT OF INCOME, ACCORDINGLY, HE WAS JUSTIFIED IN REOPENING THE ASSESSMENT ULS.147 OF TH E ACT. HENCE, THE GROUND NO.1 RAISED BY THE ASSESSEE IS DISMISSED. 8. IN THE CASE IN HAND, THE REOPENING WAS MADE ON T HE BASIS OF INFORMATION REGARDING RECEIPT OF ACCOMMODATION ENTRIES PROVIDED BY THE GROUP COMPANIES OF SHRI MUKESH CHOKSHI AND FURTHER ON THE BASIS OF STATEMENT OF SHRI MUKESH CHOKSHI. THE FACTS BEING IDENTICAL TO THAT OF THE CASE OF SMT. JYOTI D. SHAH (SUPRA) THIS ISSUE IS ACCORDINGLY DECIDED AGAINST T HE ASSESSEE. 9. SO FAR AS THE VALIDITY OF THE ADDITIONS ON MERI TS ARE CONCERNED, WE FIND THAT IN SERIES OF TRIBUNAL DECISIONS IN VARIOUS CAS ES WHEREIN ON SIMILAR STATEMENT OF SHRI MUKESH CHOKSHI, THE CASES WERE RE OPENED AND ADDITIONS WERE MADE. IN ALL THOSE CASES, THE TRIBUNAL HAS DECIDED THE ISSUE OF LONG TERM CAPITAL ITA NO.2672/M/2012 M/S. YAMUNA ESTATE PVT. LTD. 10 GAIN IN FAVOUR OF THE ASSESSEE HOLDING THAT THE SAI D STATEMENT OF SHRI MUKESH CHOKSHI WAS A GENERAL STATEMENT AND COULD NOT BE CO RROBORATED BY ANY MATERIAL EVIDENCE. SOME OF THE DECISIONS IN THIS RESPECT ARE AS FOLLOWING : 1. KATARIA KETAN ISHWARLAL VS. ITO ITA NO.4304/M/20 07 DECIDED ON 30.04.2010. 2. ACIT VS. SHRI RAVINDRAKUMAR TOSHNIWAL ITA NO .5302/M/2008 DECIDED ON 24.02.2010 3. ITO VS. TRUPTIC SHAH ITA NO.1442/M/2010 DECIDE D ON 29.04.2011 4. SMT. MANJULABEN L. SHAH VS. ITO ITA NO.3112/M/ 2014 DECIDED ON 31.10.2014 5. M/S SDB ESTATE PRIVATE LTD. VS. ITO ITA NO. 584/M/20 15 DECIDED ON 15.04.2015 10. WE FIND THAT THE FACTS OF THE ABOVE STATED CASE S WERE ALL MOST IDENTICAL TO THAT OF THE ASSESSEE. IN THE CASE OF KATARIA KETA N ISHWARLAL VS. ITO (SUPRA), THE TRANSACTIONS WERE CARRIED OUT THROUGH THE SAME BROKER I.E. M/S GOLD STAR FINVEST PVT. LTD. THE TRIBUNAL ALLOWED THE APPEAL O F THE ASSESSEE OBSERVING AS UNDER: 6.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. FROM THE COPY OF THE SHARE CERTIFICATE, DEMAT ACCOUNT, SHARE TRANSFER FORM FILED IN THE PAPER BOOK, WE FIN D THE ASSESSEE HAS PURCHASED 9500 SHARES OF KUSHAL SOFTWARE LTD. FROM M/S. HANDF UL INVESTORS PVT. LTD. WE FIND THE ASSESSING OFFICER TREATED THE SALE OF SUCH SHAR ES BY THE ASSESSEE THROUGH M/S. GOLD STAR FINVEST PVT. LTD. AS BOGUS ON THE GROUND THAT MR. CHOKSI AND HIS BROKING COMPANY WERE ENGAGED IN GIVING FALSE SHARE TRANSACT ION BILLS. HOWEVER, FROM THE COPY OF THE STATEMENT OF MR. CHOKSI, A COPY OF WHIC H IS FILED IN THE PAPER BOOK, WE FIND MR. CHOKSI HAS NOT SPECIFICALLY MENTIONED THE NAME OF THE ASSESSEE FOR OBTAINING BENEFIT ON SALE OF SUCH BOGUS SHARES. THE LEARNED DR ALSO COULD NOT POINT OUT FROM THE STATEMENT OF SHRI CHOKSI THAT HE HAS T AKEN THE NAME OF THE ASSESSEE FOR OBTAINING ANY BENEFIT ON ISSUE OF SUCH BOGUS BI LLS. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND CONSIDERING THE FACT THAT THE ASSESSEE HAD PURCHASED THE SHARES WHICH WERE DULY TRANSFERRED TO THE DEMAT ACC OUNT, AND, IN ABSENCE OF ANY ALLEGATION AGAINST THE ASSESSEE BY MR. CHOKSI IT CA NNOT BE SAID THAT THE SALE OF THE SHARES IS BOGUS. IN THIS VIEW OF THE MATTER, WE HOL D THAT THE SALE TRANSACTION ENTERED INTO BY THE ASSESSEE IS GENUINE TRANSACTION . SINCE THE ASSESSING OFFICER HAS NOT DISPUTED REGARDING THE PURCHASE OF HOUSE PROPER TY AND SINCE THE ASSESSEE FULFILS THE CONDITIONS FOR TREATING THE PROFIT ON S ALE OF SUCH SHARES AS LONG TERM CAPITAL GAIN AND FULFILLED THE CONDITIONS FOR ALLOW ABILITY OF DEDUCTION U/S. 54F, ITA NO.2672/M/2012 M/S. YAMUNA ESTATE PVT. LTD. 11 THEREFORE, WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE. THIS GROUND BY THE ASSESSEE IS ACCORDINGLY ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 11. FURTHER IN THE CASE OF ACIT VS. SHRI RAVINDRAK UMAR TOSHNIWAL (SUPRA), THE SHARE PROFIT WAS EARNED FROM THE SALE OF SHARES. THE TRIBUNAL HAS ALLOWED THE CLAIM OF THE ASSESSEE OBSERVING AS UNDE R: 11. HAVING HEARD BOTH THE PARTIES AND HAVING CONSI DERED THEIR RIVAL CONTENTIONS, WE FIND THAT THE AO HAS TREATED THE SAID TRANSACTIO NS AS BOGUS TRANSACTIONS ON THE GROUND THAT- A) THE SALE TRANSACTIONS WERE NOT ON THE FLOOR OF THE ASEL BUT WERE OFF MARKET TRANSACTIONS; B) THE ADDRESS OF THE M/S BUNIYAD CHEMICAL LTD. AND M/ S TALENT INFOWAY LTD. WAS THE SAME AND THE CONTACT PERSON FOR M/S BU NIYAD CHEMICAL LTD. ON THE FLOOR OF ASEL WAS SHRI MUKESH CHOKSHI. C) MR. MUKESH CHOKSHI HAD STATED THAT THE SALE PROCEED S HAVE BEEN PAID TO THE ASSESSEE THROUGH THE FUNDS PROVIDED BY THE A SSESSEE. 12. AS REGARDS POINT (A) ABOVE, WE FIND THAT THE IS SUE IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF MUKESH R. MAROLIA WH EREIN IT HAS BEEN HELD THAT OFF MARKET TRANSACTION IS NOT A UNLAWFUL ACTIVITY AND T HERE IS NO RELEVANCE IN SEEKING DETAILS OF SHARE TRANSACTION FROM STOCK EXCHANGE WH EN THE SALE WAS NOT ON STOCK EXCHANGE AND RELYING UPON IT FOR MAKING ADDITION. 13. AS REGARDS POINTS (B) & (C) ABOVE, WE FIND THAT THE ASSESSEE HAS FILED RELEVANT DOCUMENTARY EVIDENCE BEFORE THE AO BUT THE AO HAS FAILED TO CONSIDER THE SAME. THE CIT[A] IN HIS ORDER HAS CONS IDERED THE SAID EVIDENCE AND HAS COME TO THE CONCLUSION THAT THE SHARE TRANSACTIONS ARE GENUINE. HOWEVER, AS HELD BY THE TRIBUNAL IN THE CASE OF RAJINIDEVI A. CHOWDH ARY [CITED SUPRA], WHICH IS ON SIMILAR SET OF FACTS, THE AO COULD HAVE VERIFIED FR OM THE REGISTRAR OF COMPANIES AS TO WHETHER THE SHARES HAVE BEEN TRANSFERRED AND THE NAMES OF THE SHAREHOLDERS IN WHOSE NAMES SHARES HAVE BEEN TRANSF ERRED. THE DECISION OF THE TRIBUNAL IN THE CASE OF RAJINIDEVI A. CHOWDHARY HAS ALSO BEEN UPHELD BY THE JURISDICTIONAL HIGH COURT AS TAKEN NOTE OF BY THIS TRIBUNAL IN THE CASE OF SHRI PINAKIN L. SHAH [CITED SUPRA], TO WHICH ONE OF US I.E. THE JUDICIAL MEMBER, IS A PARTY. IN THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT[A] AND THE SAME IS UPHELD. 14 IN THE RESULT, REVENUE'S APPEAL IS DISMISSED. 12. IN THE CASE OF THE ASSESSEE BEFORE US, THE AO H AS NOT POINTED OUT ABOUT ANY DIRECT OR MATERIAL EVIDENCE AGAINST THE ASSESSE E TO HOLD THAT THE SHARE ITA NO.2672/M/2012 M/S. YAMUNA ESTATE PVT. LTD. 12 TRANSACTIONS WERE NOT GENUINE. THE ASSESSEE HAD FUR NISHED BEFORE THE AO ALL THE NECESSARY DETAILS AND EVIDENCES RELATING TO THE SHA RE TRANSACTIONS IN QUESTION. THE AO DID NOT RAISE ANY QUERY OR DOUBT ABOUT THE G ENUINENESS OF THE DETAILS AND EVIDENCES SUBMITTED BY THE ASSESSEE. THE AO HAS MADE ADDITIONS ON THE BASIS OF GENERAL STATEMENT OF MR. CHOKSHI MADE BEFO RE THE INVESTIGATION WING. THE NAME OF THE ASSESSEE DID NOT APPEAR SPECIFICALL Y IN ANY OF THE STATEMENTS OF MR. CHOKSHI. THE ASSESSEE WAS NOT PROVIDED OPPORTUN ITY TO CONFRONT MR. CHOKSHI IN RELATION TO TRANSACTIONS RELATED TO THE ASSESSEE. THE ASSESSEE BEFORE THE CIT(A) HAS ALSO SUBMITTED THE CONFIRMATION OF S H. MUKESH CHOKSHI ABOUT THE SHARE TRANSACTIONS DONE THROUGH HIS SHARE BROKI NG COMPANY. THE AO IN THE REMAND PROCEEDINGS, HOWEVER, INSISTED TO PRODUCE SA ID MR. CHOKSHI FOR EXAMINATION AS A WITNESS BEFORE HIM. THE ASSESSEE T HOUGH COULD REQUEST MR. CHOKSHI TO APPEAR BEFORE THE AO, HOWEVER HAD NO AUT HORITY OR POWER TO FORCE MR. CHOKSHI TO APPEAR BEFORE THE AO. ON THE OTHER H AND, THE AO U/S 131 OF THE ACT HAS BEEN GIVEN POWERS AS ARE VESTED IN A CIVIL COURT TO SUMMON AND ENFORCE THE ATTENDANCE OF WITNESSES OR TO COMPEL THE PRODUC TION OF RECORDS BEFORE HIM. HENCE UNDER SUCH CIRCUMSTANCES, MERELY BECAUSE THE ASSESSEE COULD NOT PRODUCE MR. CHOKSHI BEFORE THE AO, THAT ITSELF IS N OT A SUFFICIENT GROUND FOR THE CONFIRMATION OF THE ADDITIONS. IF THE AO REQUIRED T HE PRESENCE OF MR. CHOKSHI BEFORE HIM, HE COULD HAVE EXERCISED HIS POWERS UNDE R THE ACT TO SECURE THE PRESENCE OF MR. CHOKSHI BEFORE HIM. EVEN THE LD. AO , IN HIS REMAND REPORT, HAS NOT CONTROVERTED THE EVIDENCES FILED BY THE ASS ESSEE. IN VIEW OF THE ABOVE DISCUSSION OF THE MATTER AND A LSO RESPECTFULLY FOLLOWING THE ABOVE NOTED DECISIONS OF THE CO-ORDIN ATE BENCHES OF THE TRIBUNAL, WE HOLD THAT ADDITIONS MADE BY THE AO U/S 68 ARE NO T WARRANTED IN THIS CASE AND ARE ACCORDINGLY ORDERED TO BE DELETED. THE ISSUE RAISED VIDE GROUND NO.3 RELATING TO DISAL LOWANCE OF SET OFF OF BUSINESS LOSS BEING CONSEQUENTIAL TO THE ADDITION M ADE U/S 68 OF THE PROFITS ITA NO.2672/M/2012 M/S. YAMUNA ESTATE PVT. LTD. 13 FROM SALE OF SHARES IS ACCORDINGLY DECIDED IN FAVOU R OF THE ASSESSEE. 13. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 09.09.2015. SD/- SD/- (R.C. SHARMA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 09.09.2015. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.