Shri Pratish S. Shah, Ahmedabad V. The Income Tax Officer, Ward-7(4), Ahmedabad

ITA 359/AHD/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9346 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 23-02-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 05-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANTOSH KARNAMI
• Assessee Lawyers: MANISH M RAJVAIDYA
• Keywords: Search and seizure; Accommodation entries
• Section: 133A; 133(6)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER ./ ITA.NO.359/AHD/2014 / ASSTT. YEAR: 2005-2006 SHRI PRATISH S. SHAH 45, KAMESHWAR TWINS NR. MENYUG SOCIETY NR. SHYAMAL CORSS ROAD AHMEDABAD 380 015. PAN : AXKPS 8511 R VS ITO, WARD-7(4) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI MANISH M. RAJVAIDYA, CA REVENUE BY : SHRI SANTOSH KARNAMI, SR.DR / DATE OF HEARING : 23/02/2016 / DATE OF PRONOUNCEMENT: 23/02/2016 $%/ O R D E R THIS APPEAL OF THE ASSESSEE AROSE FROM ORDER OF THE LD.CIT(A)-XXI, AHMEDABAD DATED 28.11.2013 FOR THE ASSTT.YEAR 2005- 2006. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT (A) HAS ERRED IN LAW AND ON FA CTS IN CONFIRMING THE ADDITION OF RS. 1,57,598/- WHILE MAKING AN OBSERVAT ION THAT THE APPELLANT IS NOT JUSTIFIED TO COME IN APPEAL AGAINS T THE ACCEPTED ADDITION DURING THE ASSESSMENT PROCEEDINGS, HENCE I AM OF THE VIEW THAT THE A.O. HAS NOT MADE THE BEST POSSIBLE EFFORT S TO FIND OUT THE GENUINENESS OF THE ALLEGED LONG TERM CAPITAL GAIN W ERE NOT GENUINE AND THE CIT (A) HAD ACCEPTED THE SAME FOR ADDITION. ITA NO.359/AHD/2014 2 2. THE LD. CIT (A) HAS ERRED IN LAW AND ON FA CTS IN FAILING TO CONSIDER THE FACT THAT DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, THE LD. A.O. COULD ALLOW THE ASSESSEE TO CROSS EXAMINE MR. MUKESH CHOKSI TO KNOW THE FACT OF TRANSACTION. 3. THE LD. CIT (A) AS WELL AS THE A.O. GROSSLY ERRE D IN LAW AND ON FACTS IN FAILING TO CONSIDER THE FACT THAT DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD SHOWN IN HIS STATEMEN T OF INCOME LONG TERM CAPITAL GAIN OF RS. 1,57,598/-. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D DECLARED 1800 SHARES OF TALENT INFOWAYS LTD. AT RS.2,715/- ON 9.10.2003 AND SALE AT RS.1,60,313/- ON 29.3.2005 DECLARING LONG TERM CAPITAL GAIN OF RS.1, 57,598/-. THE ASSESSEE CLAIMED CAPITAL GAIN EXEMPT AND HAS NOT PAID ANY TA X ON IT. THE AOS OBSERVATIONS WERE THAT SEARCH AND SEIZURE ACTION U/ S.132 OF THE ACT WAS CARRIED OUT IN THE CASE OF M/S.MAHASAGAR SECURITIES PVT. LTD. (NOW ALAG SECURITIES PVT.LTD., BY DDIT, MUMBAI) ON 25.11.2009 AND ITS RELATED COMPANIES WERE ENGAGED IN PROVIDING BOGUS BILLS OF TRANSACTIONS IN SHARES AND SECURITIES. THE DIRECTORS OF THESE COMPANIES WERE ENGAGED IN FRAUDULENT BILLING ACTIVITIES AND IN THE BUSINESS OF PROVIDING SPECULATION PROFIT/LOSS, SHORT TERM/LONG TERM CAPITAL GAIN/LOSS FOR TRADING IN SHA RES AND SECURITIES AND IN COMMODITIES. IT WAS REPORTED BY THE DDIT, MUMBAI THAT THE TRANSACTIONS ENTERED INTO BY THE BENEFICIARIES WITH THE ABOVE CO MPANIES WERE BOGUS AND THESE REPRESENTED THE UNDISCLOSED INCOME OF THE BEN EFICIARIES AND THE ASSESSEE IN THE PRESENT CASE IS ALSO ONE OF THE BENEFICIARIE S. 4. DURING THE SEARCH OPERATIONS, THE DIRECTOR OF MA HASAGAR SECURITIES PVT. LTD., HIMSELF HAS GIVEN A STATEMENT ON OATH THAT HI S GROUP WAS ENGAGED ONLY IN FRAUDULENT BILLING ACTIVITIES AND IN THE BUSINESS O F PROVIDING BOGUS SPECULATION PROFIT/LOSS, SHORT TERM/LONG TERM CAPITAL GAIN/LOSS ETC THE AO HAS ISSUED NOTICE UNDER SECTION 133(6) TO VARIOUS MAIN STOCK E XCHANGES FOR CALLING FOR THE DETAILS OF THE SAID TRANSACTIONS AND ALL THESE STOCK EXCHANGES DENIED FOR ITA NO.359/AHD/2014 3 SUCH TRANSACTIONS, AND TO CLARIFY THE MATTER, ALL T HE DETAILS WERE PROVIDED TO THE ASSESSEE AND SHOW CAUSE NOTICE WAS ALSO SERVED ON T HE ASSESSEE. THE EXPLANATION OF THE ASSESSEE WAS NOT FOUND TO BE SAT ISFACTORY, AND ACCORDINGLY, THE SAID AMOUNT OF RS.1,57,598/- WAS ADDED TO THE I NCOME OF THE ASSESSEE. THE LD.CIT(A) CONFIRMED THE ACTION OF THE AO. 5. I HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE F ACTS OF THE CASE. THE UNDISPUTED FACTS OF PRESENT CASE ARE THAT THE ASSES SEE HAS DECLARED LONG TERM CAPITAL GAIN OF RS.1,57,598/- AND HAS CLAIMED THE S AME AS EXEMPT UNDER SECTION 10(38) OF THE INCOME TAX ACT. IT WAS OBSER VED BY THE AO THAT THE ASSESSEE HAS TAKEN BOGUS BILL FOR ALLEGED PURCHASE AND SALE SHARES OF TALENT INFOWAYS THROUGH COMPANY, OF WHICH SHRI MUKESH CHOK SHI IS A DIRECTOR ENGAGED IN PROVIDING ACCOMMODATION ENTRIES, AS STAT ED BY HIM DURING THE SEARCH OPERATION BEFORE THE INCOME TAX DEPARTMENT. THE ITAT, MUMBAI BENCH IN CASE OF MUKESH CHOKSHI (SUPRA) HAS GIVEN A FINDING WHICH ARE REPRODUCED IN THE CIT(A)S ORDER, AND READS AS UNDE R: '2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THERE WAS A SEARCH CONDUCTED IN CASE OF ONE SHRI HITESH M.BAGTHARIYA O N 28.6.2006 DURING THE COURSE OF WHICH IN HIS STATEMENT RECORDE D UNDER SECTION 132(4) HE HAD STATED THAT HE WAS AN ENTRY OPERATOR AND HE USED TO ARRANGE CHEQUES OF M/S.MAHASAGAR SECURITIES PVT. LT D. AND M/S.GOLDSTAR FINVEST PVT. LTD, IT WAS ALSO STATED B Y HIM THAT MR. MUKESH CHOWKSHI, THE ASSESSEE IN THIS APPEAL, HAD F LOATED VARIOUS COMPANIES INCLUDING HIS PERSONAL CAPACITY FOR PROVI DING ACCOMMODATION ENTRIES TO THE ENTRY SEEKERS. A SURVE Y UNDER SECTION 133A WAS ALSO CARRIED OUT ON THE SAME DAY AT THE BU SINESS PREMISES OF MR. MUKESH CHOWKSHI AND HIS CONCERN M/S. MAHASAGAR SECURITIES PVT. LTD. SHRI CHOWKSHI AT THE TIME OF SURVEY ADMITTED T HAT THE FOLLOWING COMPANIES HAD BEEN OPERATING AT THE ADDRESS AND THEY WERE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES: I) M/S.GOLDSTAR FINVEST (P) LTD. II) M/S.RICHMOND SECURITIES (P) LTD. III) M/S. ALLIANCE INTERMEDIATERIES (P) LTD. ITA NO.359/AHD/2014 4 IV) M/S.MAHASAGAR SECURITIES (P) LTD. (FORM ERLY KNOWN AS RICHMOND SECURITIES (P) LTD. V) M/S.ALPHA CHEMIE TRADE AGENCY (P) LTD. VI) M/S.MIHIR AGENCIES (P) LTD. VII) M/S.TALENT INFOWAY (P) LTD. VIII) M/S. BUNIYAD CHEMICALS LTD. IX) MUKESH CHOWKSHI, INDIVIDUAL 3. THE AO NOTED THAT THE MODUS OPERAND! ADOPTED BY THE ASSESSEE WAS THAT HE FIRST RECEIVED CASH FROM ENTRY SEEKERS WHIC H WERE DEPOSITED IN THE BANK ACCOUNT OF ONE OF THE GROUP COMPANIES AND AFTER DEPOSITING THE CASH IN THE BANK ACCOUNTS, A CHEQUE WAS ISSUED AND THE EQUAL AMOUNT IN FAVOUR OF ENTRY SEEKERS. THE ASSESSEE THU S RETURNED THE CASH OF THE ENTRY SEEKERS IN THE GUISE OF CHEQUE AFTER R ETAINING COMMISSION.' 6. THE ASSESSEE HAS RELIED UPON VARIOUS DECISIONS O F COURT LAW, BUT THE SAME ARE NOT OF ANY HELP TO THE ASSESSEE IN THE CIR CUMSTANCES AND FACTS OF THE CASE. THE ASSESSEE HAS TAKEN ENTRIES FROM THE COMP ANIES, WHO ARE INVOLVED IN PROVIDING ACCOMMODATION ENTRIES AND THE ASSESSEE HA S SHOWN CAPITAL GAIN AS ASSESSEES OWN MONEY FROM UNDISCLOSED SOURCES. THE ASSESSEE HAS NOT BROUGHT ANYTHING ON RECORD TO CONTROVERT THE FINDIN G OF THE AO OR THE LD.CIT(A). THE JUDGMENTS RELIED UPON BY THE LD.COU NSEL FOR THE ASSESSEE, THEREFORE, DO NOT HELP THE ASSESSEE, WHICH I HAVE G ONE THROUGH CAREFULLY. ACCORDINGLY, I FIND NO INFIRMITY ON THE ORDER OF TH E AO, AND THE CIT(A) HAS RIGHTLY CONFIRMED THE SAME. THUS, ALL THE GROUNDS OF THE ASSESSEE ARE DISMISSED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT ON 23 RD FEBRUARY, 2016 AT AHMEDABAD. SD/- ( B.P. JAIN ) ACCOUNTANT MEMBER AHMEDABAD; DATED 23 /02/2016