SHANTIDEVI P. MEHTA, MUMBAI V. ITO 16(2)(2), MUMBAI

ITA 2800/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3536 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Next Hearing Date: 09-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 11-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Income from undisclosed sources; Search and seizure
• Section: 132

Judgement Text

1 , , IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI . . , , ! ' #$, % , & BEFORE SHRI R.C.SHARMA, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.2800/M/15 ( %' !( / ASSESSMENT YEAR: 2009-10) SMT. SHANTIDEVI P. MEHTA PROP. KORE STEEL (INDIA) 450, PATTHE BAPURAO MARG, LOTWALA BUILDING, NEAR SINDHI GALLY, MUMBAI - 400004 ' / VS. INCOME TAX OFFICER 16(2)(2) MUMBAI ./ ./ PAN/GIR NO. : AAHPM0722A ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 13.05.2016 !' /DATE OF PRONOUNCEMENT: 25.05.2016 #$ / O R D E R PER AMARJIT SINGH, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 27.02.2015 PASSED BY THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS) 30, MUMBAI [HEREINAFTER REFERRED TO AS TH E LEARNED CIT(A)] RELEVANT TO THE A.Y.2009-10. ASSESSEE BY: SHRI RAHUL SARDA DEPARTMENT BY: SHRI VISHWAS JADHAV ITA NO.2800/MUM/15 A.Y.2009-10 2 2. THE APPELLANT IS AN INDIVIDUAL WHO FILED THE RET URN OF INCOME FOR THE A.Y.2009-10 ON 20.07.2009 DECLARING TOTAL I NCOME OF RS.2,37,570/- WHICH WAS ACCEPTED U/S.143(1) R.W.S 1 47 OF THE INCOME TAX ACT, 1961( IN SHORT THE ACT).SUBSEQUENTLY ASS ESSMENT WAS COMPLETED U/S 143(2) R.W.S 147 OF THE ACT BY THE A SSESSING OFFICER ON 23.01.2014 DETERMINING TOTAL INCOME TO THE TUNE OF RS.14,04,465/-. 3. A SEARCH AND SEIZURE ACTION U/S. 132 OF THE ACT WAS CARRIED OUT IN THE CASE OF M/S. MAHASAGAR SECURITIES PVT. LTD. AND ITS RELATED GROUP OF 34 ODD COMPANIES (THE PROMINENT ONES BEING M/S. ALLIANCE INTERMEDIARIES & NETWORK PVT. LTD., M/S. MIHIR AGEN CIES PVT. LTD., M/S. GOLDSTAR FINVEST PVT. LTD. ETC. ALL RUN BY ONE MUKESH CHOKSHI AND HIS ASSOCIATES) BY DDIT, UNIT I(4), MUMBAI BASE D ON WHICH IT WAS STATED THAT M/S. ALLIANCE INTERMEDIARIES AND NE TWORK PVT. LTD. WAS ENGAGED IN PROVIDING BOGUS BILLS OF TRANSACTION S IN SHARES AND SECURITIES. THE DETAILED VERIFICATION AND THE ASS ESSING OFFICER CONCLUDED THAT IT WAS EVIDENT THAT TRANSACTION SHOW N BY THE APPELLANT WAS NOTHING BUT A COLOURABLE DEVICE USING FORGED AN D FABRICATED BILLS FOR THE PURPOSE OF EVASION OF TAX AND LAUNDERING OF HER UNACCOUNTED INCOME AND HENCE, SHE TREATED THE SUM OF RS.11,44,0 16/- BEING THE SALE PRICE OF 2500 SHARES OF M/S. SELAN EXPLORATION LTD., 6000 SHARES OF M/S. RICHA KNITS LTD. AND 550 SHARES OF M/S. ESS AR OIL LTD., AS UNEXPLAINED INCOME EARNED OUT OF UNDISCLOSED SOURCE S. THE APPELLANT HAD ALSO SHOWN HIS INCOME TO THE TUNE OF RS.11,44, 016/- AS BEING ITA NO.2800/MUM/15 A.Y.2009-10 3 DERIVED FROM SPECULATION BUSINESS. THE ASSESSEE CO NTENDED THAT THIS INCOME WAS SHOWN WRONGLY UNDER THE HEAD INCOME FRO M OTHER SOURCES INSTEAD OF INCOME FROM BUSINESS. THE E XPLANATION WAS REJECTED AND THE ASSESSING OFFICER OBSERVED THE SA ID INCOME IS INCOME FROM OTHER SOURCES ALONG WITH ADDITION TO TH E TUNE OF RS.22,880/- BEING 2% COMMISSION ON RS.11,44,016/-. 4. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECOR D CAREFULLY. THE LEARNED REPRESENTATIVE OF THE ASSESSEE ARGUED THAT THE ASSESSING OFFICER HAS ACCEPTED THE PURCHASE U/S.143(1) R.W.S 147 OF THE ACT IN THE EARLIER YEAR OF 2008-09, THEREFORE, IN THE SAI D CIRCUMSTANCES THE SALE IS NOT REQUIRED TO BE DOUBTED. IT IS ALSO ARG UED THAT THE OPPORTUNITY TO CROSS EXAMINE THE MUKESH CHOKSHI HAS BEEN GRANTED TO THE ASSESSEE BY THE ASSESSING OFFICER. THEREFOR E, ADDITION IS NOT REQUIRED TO BE MADE IN THE INTEREST OF JUSTICE. SP ECIFICALLY IN VIEW OF THE LAW SETTLED IN KISHANCHAND CHELLARAM VS. COMMIS SIONER OF INCOME TAX [1980] 125 ITR 713 (SC). IT IS ALSO ARG UED THAT THE PURCHASE WAS AN OFF MARKET TRANSACTION, THEREFORE , THE CONFIRMATION TAKEN FROM THE NATIONAL STOCK EXCHANGE IS NOT LIABL E TO BE RELIED UPON HENCE THE ADDITION IS WRONG AGAINST LAW AND FACTS. IT IS ALSO SPECIFICALLY ARGUED THAT THE ASSESSEE FILED ALL THE EVIDENCE SUCH AS CONTRACT NOTES, BANK STATEMENT, LEDGER ACCOUNT & DE MAT STATEMENT, THEREFORE THE SAID TRANSACTION IS NOT REQUIRED TO B E DOUBTED. ITA NO.2800/MUM/15 A.Y.2009-10 4 5. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPR ESENTATIVE HAS STRONGLY RELIED UPON THE FINDING OF THE LEARNED CIT (A). IN VIEW OF THE ARGUMENT ADVANCED BY THE LEARNED REPRESENTATIVE OF THE PARTIES AND PERUSING THE RECORD,IT IS NOT DISPUTED THAT ASSES SING OFFICER HAS ACCEPTED THE PURCHASE U/S.143(1) R.W.S 147 OF THE A CT RELATING TO THE A.Y.2008-09. THEREFORE, IN THE SAID CIRCUMSTANCES THE SALE IS NOT REQUIRED TO BE DOUBTED IN VIEW OF THE OBSERVATIONS MADE IN CASE OF DALPAT SINGH CHAUDHARY VS. ASST. COMMISSIONER OF IN COME TAX [2012] 25 TAXMANN.COM 153 (JODH.)(TRIB.). ON APPRA ISAL OF ORDER OF THE ASSESSING OFFICER AS WELL AS LEARNED CIT(A) NOT HING CAME IN TO NOTICE THAT AN OPPORTUNITY TO CROSS EXAMINATION THE MUKESH CHOWKSI WAS GIVEN TO THE ASSESSEE WHOSE STATEMENT WAS RELIE D UPON FOR ADDING THE ALLEGED AMOUNT IN QUESTION. THE CONTENTION OF THE ASSESSEE IS THAT THE TRANSACTION OF THE SHARES WAS OFFLINE WHICH CAN NOT BE DOUBTED IN VIEW OF THE LAW SETTLED IN MUKESH R. MAROLIA VS. AC IT (2006) 6 SOT 247, MUMBAI TRIBUNAL. NO DOUBT THAT WHEN IT IS SPE CIFICALLY TREATED BY THE ASSESSEE THEN THE TRANSACTION IS ALSO REQUIR ED TO BE VIEWED ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD IN CO NNECTION WITH THE OFF MARKET TRANSACTIONS. NO DOUBT ASSESSEE HAS ALSO FI LED THE CONTRACT NOTES, BANK STATEMENT, LEDGER ACCOUNT & DEMAT STATE MENT ETC. AS EVIDENCE BEFORE US WHICH IS ALSO LIABLE TO BE CONSI DERED BEFORE THE ADDITION OF THE INCOME UNDER CHALLENGE. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES WE ARE OF THE VIEW THAT THE EVIDE NCE ADDUCED BY THE ASSESSEE IS REQUIRED TO BE CONSIDERED BEFORE PA SSING THE ORDER ITA NO.2800/MUM/15 A.Y.2009-10 5 THEREFORE THE ORDER PASSED BY THE LEARNED CIT(A) ON THIS POINT DOES NOT SEEM JUSTIFIABLE AND HEREBY ORDERED TO BE SET ASIDE AND THIS ISSUE IS HEREBY ORDERED TO BE RESTORED TO THE FILE OF AS SESSING OFFICER TO DECIDE THE MATTER AFRESH BY CONSIDERING THE EVIDENC E ADDUCED BEFORE US AS WELL AS BY GIVING AN OPPORTUNITY OF BEING HE ARD TO THE ASSESSEE IN ACCORDANCE WITH LAW. ACCORDINGLY, THE FINDING OF THE ORDER OF LEARNED CIT(A) IS SET ASIDE AND FILE IS HEREBY REST ORED BEFORE THE ASSESSING OFFICER TO DECIDE THE MATTER AFRESH. IN VIEW OF THE ABOVE DIRECTION THE ISSUE NO.4 IS CONSEQUENTIAL. HENCE, ISSUE NO.4 IS ALSO HEREBY ORDERED TO BE SET ASIDE AND WOULD FOLLOW THE FINDING OF ADJUDICATION ON THE POINT ISSUE NO.1 TO 3 DECIDED A BOVE. 6. ACCORDINGLY THE APPEAL FILED BY THE ASSESSEE IS HEREBY ALLOWED IN PART . ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH MAY , 2016. SD/- SD/- (R.C.SHARMA) (AMARJIT SINGH) # / ACCOUNTANT MEMBER %& # /JUDICIAL MEMBER ' ( MUMBAI; )# DATED : 25 TH MAY, 2016 MP MP MP MP ITA NO.2800/MUM/15 A.Y.2009-10 6 * +%'#, -,(' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. * ( ) / THE CIT(A)- 4. * / CIT 5. -./ &&01 , 01' , ' ( / DR, ITAT, MUMBAI 6. /34 5 / GUARD FILE. ' / BY ORDER, - & //TRUE COPY// ./$ /(DY./ASSTT. REGISTRAR) , ' ( / ITAT, MUMBAI