ANITA ASHWIN NAGDA, MUMBAI V. CIT 10, MUMBAI

ITA 3318/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2143 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 08-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR P DANIAL
• Keywords: Bogus purchase; Accommodation entries; Reassessment proceedings
• Section: 147; 148; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI , BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI RAJESH KUMAR, AM ITA NO. 3318/MUM/2014 ( ASSESSMENT YEAR: 2004-05) SMT. ANITA ASHWIN NAGDA /APPELLANT E/25, KONARK INDRAPRASTH, 9TH FLOOR JAIN MANDIR ROAD, S.P. NAGAR MULUND (W), MUMBAI 400080 VS. COMMISSIONER OF INCOME TAX - 10 RESPONDENT ROOM NO. 574, AYAKAR BHAVAN M.K. ROAD, MUMBAI 400020 PAN - AAEPN8150G APPELLANT BY: DR. P. DANIAL / RESPONDENT BY: SHRI ANAND MOHAN DATE OF HEARING : 18.11.2015 /DATE OF PRONOUNCEMENT : 30.11.2015 O R D E R PER SHAILENDRA KUMAR YADAV, JM THIS APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF CIT(A) ON FOLLOWING GROUNDS: - THE LEARNED C.I.T. - 10 WAS NOT JUSTIFIED IN INVOK ING PROVISION OF SECTION 263 OF THE INCOME TAX ACT, 1961, BY CONS IDERING THE ORDER PASSED BY A.O FOR DROPING PROCEEDINGS U/S 147 OF THE I.T. ACT, 1961 AS ERRONEOUS AND PREJUDICIAL TO THE INTER EST OF THE REVENUE. 2 ITA NO. 3318/MUM/2014 SMT. ANITA ASHWIN NAGDA 2. RETURN OF INCOME WAS FILED ON 22.02.2005 DECLARIN G TOTAL INCOME AT ` 15,57,312/-. SUBSEQUENTLY NOTICE UNDER SECTION 148 WAS ISSUED ON 29.03.2011. REASSESSMENT PROCEEDINGS UNDE R SECTION 147 WAS DROPPED VIDE ORDER DATED 28.12.2011. AFTER GOIN G THROUGH THE ABOVE MENTIONED ASSESSMENT ORDER AND THE RECORD S OF THE ASSESSEE, IT WAS OBSERVED BY CIT(A) THAT PRIMA FACI E THE ASSESSMENT ORDER SUFFERED, INTER ALIA, FROM THE FOLLOWING ERRO RS: - A) THE ASSESSING OFFICER DID NOT VERIFY THE TRANSACTIO NS ENTERED BY THE ASSESSEE IN THE SHARES OF THE CONCER NS CONTROLLED BY SHRI MUKESH CHOKSI SUCH AS BUNIYAD CHEMICALS LTD AND N.E. ELECTRONICS LTD WHICH WERE O FF MARKET TRANSACTIONS, THOUGH THERE WAS EVIDENCE ON R ECORD AND THE ADMISSION OF BOGUS TRANSACTIONS BY WAY OF E NTRIES RELATING TO SALE AND PURCHASE OF SHARES BY SHRI MUK ESH CHOKSI. B) THE ASSESSING OFFICER DID NOT EXAMINE SHRI MUKESH C HOKSI BEFORE ACCEPTING THE TRANSACTIONS IN SHARES BY THE ASSESSEE MERELY ON THE BROKER NOTE AND THE BANK STATEMENTS I N SPITE OF THE FACT THAT THE BROKER M/S. GOLD STAR FINVEST PVT. LTD. IS ALSO ONE OF THE CONCERNS CONTROLLED BY SHRI MUKESH CHOKSI, WHICH IS INDULGING IN GIVING BOGUS ENTRIES OF SALE AND PURCHASE OF SHARES. C) BONAFIDES OF TRANSACTIONS HAS BEEN ACCEPTED WIT HOUT ANY INDEPENDENT ENQUIRY THOUGH SHRI MUKESH CHOKSI IN HI S STATEMENT U/S 132(4) HAS ADMITTED THAT, THESE TRANS ACTIONS WERE BOGUS/FABRICATED/SHAM AND THE SAME WAS AVAILAB LE WITH THE ASSESSING OFFICER. IN THE LIGHT OF THE ABOVE FACTS EMERGING FROM THE R ECORDS THAT THE ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS SO AS TO PREJUDICIAL TO THE INTEREST OF REVENUE. THEREFORE, SHOW CAUSE NOTICE 1 3 ITA NO. 3318/MUM/2014 SMT. ANITA ASHWIN NAGDA WAS ISSUED TO THE ASSESSEE. AFTER CONSIDERING THE R ESPONSE ON BEHALF OF ASSESSEE CIT SET ASIDE THE ORDER PASSED BY ASSES SING OFFICER BY INVOKING PROVISIONS OF SECTION 263 OF THE ACT. SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF ASSESSEE, INTER ALIA, SUBMIT TING THAT THE CIT WAS NOT JUSTIFIED IN INVOKING PROVISIONS OF SECTION 263 OF THE ACT BY CONSIDERING THE ORDER PASSED BY ASSESSING OFFICER F OR DROPPING PROCEEDINGS UNDER SECTION 147 OF THE ACT AS ERRONEO US AND PREJUDICIAL TO THE INTEREST OF REVENUE. 3. THE STAND OF THE ASSESSEE HAS BEEN THAT NOTICE UNDE R SECTION 148 WAS ISSUED ON THE BASIS OF INFORMATION RECEIVED FROM DDIT (INV.), MUMBAI IN REFERENCE TO BOGUS PURCHASE OF SH ARES, I.E. ACCOMMODATION ENTRIES OF LONG TERM CAPITAL GAIN. IN RESPONSE TO THE SAME ASSESSEE FILED ALL RELEVANT DETAILS FOR JUSTIF ICATION OF TRANSACTIONS AS GENUINE. THE DEPARTMENT HAS DOUBTED THE SALE BUT NOT PURCHASE, I.E. THE DEPARTMENT HAS ACCEPTED THE PURCHASE AS GE NUINE. ASSESSEE HAS REFLECTED THE PURCHASE IN HER BALANCE SHEET IN EARLIER YEAR AND THE DEPARTMENT HAD NEVER DOUBTED THE GENUINENESS OF THE BOOKS. IN THE AFORECITED CIRCUMSTANCES ONLY BECAUSE ASSESSEE BONAFIDELY ENTERED INTO SHARE TRANSACTION WITH SHARE BROKER WO ULD NOT LEAD TO THE INTERFERENCE THAT ALL TRANSACTIONS WERE BOGUS. MOREOVER, ASSESSING OFFICER, AFTER CONSIDERING ASSESSEES SUB MISSIONS ACCEPTED 4 ITA NO. 3318/MUM/2014 SMT. ANITA ASHWIN NAGDA THE PROCEEDINGS UNDER SECTION 263 OF THE ACT. HENCE THE SAME CANNOT BE SAID TO BE ERRONEOUS AND PREJUDICIAL TO THE INTE REST OF REVENUE. IT CANNOT BE SAID THAT ASSESSING OFFICER HAS NOT MADE ENQUIRY BEFORE REACHING THE CONCLUSION. 4. IN VIEW OF THE ABOVE, CIT WAS NOT JUSTIFIED IN SETT ING ASIDE THE ORDER OF ASSESSING OFFICER WHICH HAS BEEN MADE AFTE R PROPER ENQUIRIES INTO THE FACTS AND CIRCUMSTANCES OF THE C ASE. ACCORDINGLY THE ORDER OF CIT IS SET ASIDE AND THAT OF ASSESSING OFFICER IS RESTORED. THUS, THE GROUND OF APPEAL RAISED BY THE ASSESSEE I S ALLOWED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER, 2015. 30.11.2015 SD/ - SD/ - ( RAJESH KUMAR ) ( SHAILENDRA KUMAR YADAV ) /ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI, DATED 30 TH NOVEMBER, 2015 COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . / THE CIT - 10, MUMBAI 4. / DR, A BENCH ITAT, MUMBAI 5. GUARD FILE. / BY ORDER //TRUE COPY// /ASSTT. REGISTRAR) /ITAT, MUMBAI N.P.