TEJRAJ G. JAIN (HUF), MUMBAI V. ITO WD 25(1)(5), MUMBAI

ITA 3558/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9286 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 15-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Keywords: Unexplained cash credit; Accommodation entries
• Section: 68

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 3558 /MUM/ 2017 (ASSESSMENT YEAR 20 07 - 08 ) TEJRAJ G. J AIN (HUF) 12, MATRUCHAYA BUILDING DAUD BAUG, J.P. ROAD ANDHERI WEST MUMBAI - 400 058 PAN AABHT7822E VS. ITO WARD 25(1)(5) AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI DINKLE HARIYA DEPARTMENT BY SHRI RAM TIWARI DATE OF HEARING 20 .9. 201 7 DATE OF PRONOUNCEMENT 20 . 9 . 201 7 O R D E R THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 09 - 02 - 2017 PASSED BY LD CIT(A) - 39, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2007 - 08. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ASSESSMENT OF RS.19,954/ - AS UNEXPLAINED CA SH CREDIT AS AGAINST THE CLAIM OF THE ASSESSEE FOR ASSESSING THE SAME AS SHORT TERM CAPITAL GAINS. 2. I HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE HAS PURCHASED AND SOLD CERTAIN SHARES THROUGH A BROKER NAMED M/S ALLIANCE INTERMEDIATRIES AN D NETWORK P LTD, WHICH WAS BELONGING TO MUKESH CHOKSI GROUP. IN THE SEARCH UNDERTAKEN IN THE CASE OF MUKESH CHOKSI GROUP, SHRI MUKESH CHOKSI ADMITTED THAT HE AND HIS GROUP OF COMPANIES ARE INDULGING IN PROVIDING ACCOMMODATION ENTRIES TO GENERATE CAPITAL G AINS. IT WAS NOTICED THAT THE ASSESSEE HAS DECLARED CAPITAL GAINS BY DEALING WITH THE ABOVE SAID GROUP AND HENCE THE AO REOPENED THE ASSESSMENT OF THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAD PURCHASED SHARES OF DR. REDDY LABORATORIES, IFCI, CRAZY INFO TECH AND KAMANWALA HOUSING DURING THE YEAR UNDER CONSIDERATION. HOWEVER IT HAS SOLD THE SHARES OF DR. REDDY LABORATORIES ONLY DURING THE YEAR UNDER TEJRAJ G. JAIN (HUF) 2 CONSIDERATION AND EARNED A PROFIT OF RS.19,954/ - . THE ASSESSING OFFICER ASSESSED THE PROFIT OF RS.19,954/ - AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. THE PURCHASES OF SHARES OF OTHER THREE COMPANIES WERE TREATED AS ACCOMMODATION ENTRIES BY THE AO. THE LD CIT(A) ALSO CONFIRMED THE SAME. 3. I NOTICE THAT THE ASSESSEE HAS PURCHASED AND SOLD SHARES OF DR. REDDY LABORATORIES ON THE SAME DAY, I.E., IT WAS AN INTRADAY TRANSACTION. HENCE THERE WAS NO NECESSITY FOR THE ASSESSEE TO MAKE ANY PAYMENT. I ALSO NOTICE THAT THE ABOVE SAID SCRIP IS THAT OF A REPUTED COMPANY, I.E., THE GAINS WERE NOT GENERATED THROUGH THE SHARES OF COMPANIES GENERALLY OPERATED BY MUKESH CHOKSI GROUP. FURTHER THE ASSESSEE HAS ALSO FURNISHED DETAILS OF BROKER NOTES TO SUBSTANTIATE THE PURCHASE AND SALES. IT WAS OBSERVED BY THE TAX AUTHORITIES THAT THE REGISTRATION OF M/S ALLIANCE INTERM EDIATRIES HAS BEEN CANCELLED, BUT THE SAID FACT, IN MY VIEW, CANNOT MAKE THE IMPUGNED TRANSACTION AS BOGUS IN VIEW OF THE OTHER EVIDENCES AVAILABLE ON RECORD. HENCE I AM OF THE VIEW THAT THE PROFIT OF RS.19,954/ - NEED NOT BE TREATED AS UNEXPLAINED CASH CR EDIT, SINCE THE ASSESSEE HAS GIVEN SUPPORTING TO PROVE THE CREDIT. ACCORDINGLY I SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND DIRECT THE AO TO ASSESS THE ABOVE SAID GAIN AS SHORT TERM CAPITAL GAIN IN THE HANDS OF THE ASSESSEE. 4. THE ASS ESSEE HAS ALSO RAISED SOME OTHER LEGAL ISSUES. SINCE THE APPEAL OF THE ASSESSEE IS ALLOWED ON MERITS, I DO NOT FIND IT NECESSARY TO ADJUDICATE THEM. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 20 . 9 . 201 7. SD/ - (B.R.BASKARAN) ACCOUNTANT MEMBER MUMBAI ; DATED : 20 / 9 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT TEJRAJ G. JAIN (HUF) 3 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI