JAYDEEP SHAH, MUMBAI V. ITO 24(2)(3), MUMBAI

ITA 3378/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8884 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 18-07-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 08-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HEMALATHA
• Keywords: Accommodation entries
• Section: 133(6); 2

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ./ I.T.A. NO S . 3378 & 3379/MUM/2017 ( / ASSESSMENT YEAR S : 2008 - 09 & 2009 - 10 ) JAYDEEP C. SHAH FLAT NO. 204, J. K. TOWER, A - WING, GOREGAONKAR ROAD, GAUDEVI, MUMBAI - 400 007 / VS. ITO - 24(2)(3), AAYAKAR BHAVAN, ROOM NO. 603, C - 13, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI - 51 ./ ./ PAN/GIR NO. AAFPS 5372 L ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENT BY : MS. HEMALATHA / DATE OF HEARING : 31.08.2017 / DATE OF PRONOUNCEMENT : 01.11. 2017 / O R D E R PER SHAMIM YAHYA , A. M.: TH E S E A PPEAL S BY THE SAME ASSESSEE ARE DIRECTED AGAINST THE RESPECTIVE O RDER S OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 4 1 , MUMBAI (CIT(A) FOR SHORT) DATED 08 .02.2017 AND PERTAIN TO THE ASSESSMENT YEAR S (A.Y.) 20 08 - 09 AND 20 09 - 10 . 2. THE GROUNDS OF APPEAL READ AS UNDER: 2 ITA NO S . 3378& 3379/M /2017 (A.YS.2008 - 09 & 2009 - 10) JAYDEEP C. SHAH VS. ITO 1. THE HONBLE CIT(APPEALS) ERRED IN LAW AND ON FACTS IS NOT GIVING SUFFICIENT OPPORTUNITY OF BEING ERRED BEFORE DISPOSING OF APPEAL OF THE AP PELLANT. 2. THE APPELLANT PRAYS THAT HIS APPEAL MAY BE PLEASE RESORTED BACK TO THE HONBLE CIT(A) FOR GIVING THE SUFFICIENT HEARING AND RECONSIDERATION OF THE APPEAL BEFORE HONORABLE CIT(A). 3. SINCE THE GROUNDS ARE COMMON, THE SE APPEAL S ARE BEING DISPOSE D OF BY THIS COMMON ORDER. SINCE THE FACTS ARE SIMILAR, I AM REFERRING TO FACTS AND FIGURES FROM ASSESSMENT YEAR 2008 - 09. 4. BRIEFLY STATED THE FACTS OF THE CASE IS THAT THE ASSESSMENT WAS RE - OPENED BAS ED ON THE INFORMATION RECEIVED FROM INVESTIGATION WI NG OF INCOME - TAX D EPARTMENT CONSEQUENT TO THE SEARCH ACTION CONDUCTED IN THE MAHASAGAR GROUP OF CASES THAT THE ASSESSEE HAS TAKEN ENTRIES FROM ONE M/S. MAHASAGAR SECURITIES PVT . LTD AND ITS RELATED GROUP OF COMPANIES, ALL RUN BY SHRI MUKESH CHOKSI, WHO WAS ENGAGED IN FRAUDULENT BILLING ACTIVITIES AND GIVING ACCOMMODATION ENTRIES IN ORDER TO ENABLE THE CLIENT TO DECLARE SPECULATION PROFIT/LOSS, SHORT TERM CAPITAL GAIN/ LONG TERM CAPITAL GAIN, PROFIT AND LOSS ON ACCOUNT OF COMMODITY TRADING, INTRODUCTION OF S HARE APPLICATION MONEY , ETC . 4 .1 DURING THE SEARCH ACTION, STATEMENT ON OATH WAS RECORDED IN WHICH SHRI MUKESH CHOKSI HAD ADMITTED THAT HE AND HIS GROUP WAS ENGAGED IN FRAUDULENT BILLING ACTIVITIES AND GIVING ACCOMMODATION ENTRIES. 4 .2 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO) OBSERVED THAT THE ASSESSEE HAD OFFERED SHORT TERM CAPITAL GAINS OF RS. 1 , 82 , 363/ - AND 3 ITA NO S . 3378& 3379/M /2017 (A.YS.2008 - 09 & 2009 - 10) JAYDEEP C. SHAH VS. ITO INVESTMENT IN 18000 SHARES OF RICHA KNITS FOR RS.3,41,500/ - AND 4000 SHARES OF ESSAR OIL FOR RS. 2,06,8257 - THROUGH M /S. ALLIANCE INTERMEDIARIES & M/S. NETWORK P. LTD., A CONCERN OPERATED BY SHRI MUKESH CHOKSI. 4 .3 THE ASSESSEE WAS SHOW CAUSED TO EXPLAIN AS TO WHY THE ABOVE TRANSACTIONS MADE THROUGH M/S. ALLIANCE INTERMEDIARIES & M/S. NETWORK P. LTD. SHOULD NOT BE TREAT ED AS BOGUS SHORT TERM CAPITAL GAINS AND BOGUS INVESTMENT. HOWEVER, THE ASSESSEE FAILED TO SUBMIT ANY EXPLANATION. 4 .4 INFORMATION WAS RECEIVED UNDER SECTION 133(6) FROM NATIONAL STOCK EXCHANGE OF INDIA WHEREIN IT WAS SUBMITTED THAT M/S. ALLIANCE INTERMED IARIES & M/S. NETWORK P. LTD. WAS DEBARRED BY THE NATIONAL STOCK EXCHANGE WITH EFFECT FROM 19.02.2004 TO PERFORM AS A REGISTERED BROKERS. 4 .5 THE AO CONCLUDED THAT THE SHORT TERM CAPITAL GAINS OFFERED AMOUNTING TO RS.1,82,363/ - AND INVESTMENT IN SHARES OF RICHA KNITS FOR RS.3,41,500/ - AND ESSAR OIL FOR RS.2,06,825/ - THROUGH M/S. ALLIANCE INTERMEDIARIES & M/S. NETWORK P. LTD. WERE BOGUS AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 5 . AGAINST THE ABOVE ORDER, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A). THE LD. CIT(A) NOTED THAT SEVERAL NOTICES WERE GIVEN TO THE ASSESSEE, HOWEVER, THERE WAS NEITHER ANY COMPLIANCE NOR ANY ADJOURNMENT PETITION FILED. ACCORDINGLY, THE LD. CIT(A) DECIDED THE ISSUE. HE HELD THAT AFTER GOING THROUGH THE ASSESSMENT ORDER , IT 4 ITA NO S . 3378& 3379/M /2017 (A.YS.2008 - 09 & 2009 - 10) JAYDEEP C. SHAH VS. ITO WAS EVIDENT THAT THE ADDITIONS/DISALLOWANCES WERE MADE BY THE ASSESSING OFFICER BASED ON THE INVESTIGATION CONDUCTED IN CASE OF SHRI MUKESH CHOKSI GROUP AND FURTHER CONFIRMATION FROM STOCK EXCHANGE DESPITE REQUEST FROM THE ASSESSING OFFICER, THE ASSES SEE HAS NOT FILED ANY SUBMISSIONS OR FACTUAL EVIDENCE IN SUPPORT OF THE CLAIM. HENCE, THE LD. CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER. 6 . AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. IT IS NOTED THAT DESPITE SERVICE OF NO TICE FOR HEARING ON MORE THAN ONE OCCASION NOBODY APPEARED ON BEHALF OF THE ASSESSEE. HENCE , THIS APPEAL IS BEING DISPOSED OF BY HEARING THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSING THE RECORDS. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE AS SESSEE W AS ALREADY ENGAGED INTO MONEY LAUNDERING ACTIVITIES AND THE ASSESSEE SHOULD BE HELD A CCOUNTABLE IN THIS RESPECT. 7 . UPON CAREFUL CONSIDERATION I FIND THAT THESE APPEALS RELATE TO FRAUDULENT BOGUS ENTRIES TAKEN FROM SHRI MUKESH CHOKSI GROUP OF COMP ANIES. SHRI MUKESH CHOKSI HAS CLEARLY ADMITTED THAT HE AND HIS GROUP COMPANIES WERE ENGAGED IN PROVIDING BOGUS ACCOMMODATION ENTRIES OF VARIOUS TYPES . INFORMATION WAS ALSO RECEIVED U/S. 133(6) FROM NATIONAL STOCK EXCHANGE WHEREIN IT WAS SUBMITTED THAT M/S. ALLIANCE INTERMEDIARIES & NETWORK PRIVATE LIMITED WAS DEBARRED BY NATIONAL STOCK EXCHANGE W.E.F. 19.02.2004 TO PERFORM AS REGISTERED BROKERS. IN THIS FACTUAL SCENARIO, THE ASSESSING OFFICER HAS CONCLUDED THAT SHORT TERM CAPITAL GAIN OFFERED AMOUNTING TO R S.1,82,263/ - AN D INVESTMENT IN SHARES OF M/S. RICHM OND SECURITIES PRIVATE LIMITED 5 ITA NO S . 3378& 3379/M /2017 (A.YS.2008 - 09 & 2009 - 10) JAYDEEP C. SHAH VS. ITO F OR RS.3,41,500/ - AND M/S. ESSAR OIL FOR RS.2,06,825/ - T HROUGH THESE BROKERS , OPERATED BY SHRI MUKESH CHOKSI, WERE BOGUS . HENCE, THE IMPUGNED AMOUNTS WERE ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSEE HAD NOT SUBMITTED ANY RESPONSE TO THE ASSESSING OFFICERS NOTICE IN THIS REGARD, N OR ANY SUBMISSIONS WERE MADE BEFORE THE LD. CIT(A) OR ITAT . I FURTHER NOTE THAT A SIMILAR CASE IN ITAT MUMBAI BENCH IN ITA NO. 6398/MUM/ 2012 FOR A.Y. 2003 - 04 IN THE CASE OF DISHA N. LALWANI VS. ITO VIDE ORDER DATED 22.03.2017, HAS ELABORATELY CONSIDERED THE ISSUE OF BOGUS ENTERING FROM SHRI MUKESH CHOKSI GROUP, WHEREIN T HE TRIBUNAL HAD CONCLUDED AS UNDER: IN THE AFORESAID ORDER AN ELABORA TE DISCUSSION HAS BEEN MADE BY HONBLE DELHI HIGH COURT. LIKEWISE, THE INDORE BENCH OF THE TRIBUNAL IN THE CASE OF AGARWAL COAL CORPORATION HAS CONSIDERED VARIOUS DECISIONS AND FINALLY DECIDED IN FAVOUR OF THE REVENUE. IF THE FACTS OF THE PRESENT APPEAL AR E ANALYZED ON THE TOUCH SCALE OF AFORESAID DECISIONS, ONE FACT IS CLEARLY OOZING OUT THAT MERELY A PAPER WORK WAS CAMOUFLAGED BY THE ASSESSEE WITH THE HELP OF SHRI MUKESH CHOKSI AND ITS ASSOCIATES FIRMS. IT IS ALOS UNDISPUTED FACTS THAT THE STATEMENT TENDE RED BY SHRI MUKESH CHOKSI WAS NEITHER CONTRADICTED NOR PROVED TO FALSE, THEREFORE, WE FIND NO INFIRMITY IN THE CONCLUSION OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL), THUS, ON MERIT ALSO, THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL) IS AFFIR MED. FINALLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. 8 . THE ABOVE DISCUSSION AND THE PRECEDENT CLEARLY MAKE IT CLEAR THAT BOGUS ACCOMMODATION ENTRIES WERE OBTAINED BY THE ASSESSEE AND WERE CAMOUFLAGED BY PAPER WORK PREPARED WITH THE HELP OF SHRI MUKESH CHOKSI AND HIS ASSOCIATE FIRMS. ACCORDINGLY, I DO NOT FIND INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND HENCE I CONFIRM THE SAME. 6 ITA NO S . 3378& 3379/M /2017 (A.YS.2008 - 09 & 2009 - 10) JAYDEEP C. SHAH VS. ITO 9 . IN THE RESULT, THE SE APPEALS BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01.11.2017 SD/ - (S HAMIM YAHYA ) / A CCOUNTANT MEMBER MUMBAI ; DATED : 01.11.2017 . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI