ACIT 21(1), MUMBAI V. JAGRUTI VIJAY GORWADIA, MUMBAI

ITA 3933/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5587 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 09-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POOJA SWAROOP
• Assessee Lawyers: KUNAL GORWADIA SO
• Keywords: Reopening of assessment; Transactions in derivatives; Accommodation entries
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'H' BENCH, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 3933/MUM/2016 (ASSESSMENT YEAR: 2008-09) A C I T - 2(1) ROOM NO. 116, 1ST FLOOR PIRAMAL CHAMBERS PAREL, MUMBAI 400012 VS. SMT. JAGRUTI VIJAY GORWADIA 14, 1ST FLOOR, RAMKUNK R.K. VAIDYA ROAD, DADAR (W) MUMBAI 400028 PAN AFIPG7437E APPELLANT RESPONDENT APPELLANT BY: MS. POOJA SWAROOP RESPONDENT BY: SHRI KUNAL GORWADIA (S/O ASSESSEE) DATE OF HEARING: 10.07.2018 DATE OF PRONOUNCEMENT: 31.07.2018 O R D E R PER PAWAN SINGH, JM THIS APPEAL FILED BY REVENUE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-33, MUMBAI DATED 14.03.2016 AND IT RELATES T O A.Y. 2008-09. 2. REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - (I) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER LD. CIT(A) WAS CORRECT IN DELETING THE ADDI TION OF RS.1,06,11,129/- WITHOUT APPRECIATING THE ACTION OF THE A.O. (II) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER LD. CIT(A) WAS CORRECT IN DELETING THE ADDI TION BY NOT TREATING THE SAME AS THE INCOME FROM OTHER SOURCES BY NOT APPRECIATING THE ACTION OF THE A.O. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME FOR A.Y. 2008-09 ON 26.09.2008 DECLARING NIL INCOME . THE ASSESSMENT WAS REOPENED ON THE BASIS OF INFORMATION RECEIVED FROM THE DG, INVESTIGATION WING, MUMBAI WHICH HAD CONDUCTED SURVEY IN THE CASE OF MAHASAGAR GROUP OF CASES MANAGED BY ONE SHRI MUKESH CHOKSI WH O WAS ENGAGED IN FRAUDULENT BILLING ACTIVITY AND PROVIDING BOGUS SPE CULATION PROFIT/LOSS ON ITA NO. 3933/MUM/2016 SMT. JAGRUTI VIJAY GORWADIA 2 COMMODITY TRADING AND DIFFERENT KINDS OF ACCOMMODAT ION ENTRIES. FROM THE COMPUTER SEIZED FROM THE PREMISES OF SHRI MUKESH CH OKSI A LIST OF BENEFICIARIES WAS EXTRACTED/TAKEN. IN THE LIST NAME OF THE ASSESSEE WAS SHOWN AS A BENEFICIARY. ON THE BASIS OF THE INFORMA TION THE AO MADE BELIEF FOR REOPENING OF ASSESSMENT. A NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 (HEREINAFTER 'THE ACT') DATED 26.03.2013 WAS SERVED UPON THE ASSESSEE. IN RESPONSE TO THE NOTICE ASSESSEE FURNIS HED HER REPLY DATED 13 TH JANUARY, 2014 CONTENDING THAT THE RETURN FILED ON 2 6.09.2008 MAY BE TREATED AS RETURN IN RESPONSE TO THE SAID NOTICE. T HE ASSESSEE WAS COMPLETED BY THE AO UNDER SECTION 147 R.W.S. 143(3) OF THE AC T. THE AO, ON THE BASIS OF THE INFORMATION RECEIVED FROM THE INVESTIGATION WING MADE ADDITION OF ` 1,06,11,129/- ON ACCOUNT OF INCOME FROM OTHER SOURC ES. ON APPEAL BEFORE THE CIT(A) THE ENTIRE ADDITION WAS DELETED. THEREFO RE, AGGRIEVED BY THE ORDER OF THE CIT(A) REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEAD THE LEARNED D.R. FOR THE REVENUE AND T HE SON OF THE ASSESSEE WHO WAS PRESENT BEFORE US. THE LEARNED D.R . SUPPORTED THE ORDER OF THE AO. THE LEARNED A.R. SUBMITS THAT THE ASSESS MENT WAS REOPENED ON THE BASIS OF INFORMATION THAT ASSESSEE AVAILED ACCO MMODATION ENTRY OF `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` 1,06,11,138/- UNDER THE HEAD INCOME FROM OTHER SOURCES. THE LEARNED CIT(A) SUS TAINED THE VALIDITY OF REOPENING OF ASSESSMENT. HOWEVER, ON ADDITION THE L EARNED CIT(A) OBSERVED THAT DESPITE FILING SUFFICIENT DOCUMENTARY EVIDENCE S BY ASSESSEE THAT NO TRANSACTION OF SHARE AND F&O WITH M/S. ALLIANCE INT ERMEDIARIES & NETWORK PVT. LTD. HAVE BEEN MADE BY THE ASSESSEE IN FINANCI AL YEAR 2007-08 AND BEFORE OR THEREAFTER, THE AO HAS NOT TAKEN COGNIZAN CE OF THE AFFIDAVIT FILED BY THE ASSESSEE. THE AO ONLY RELIED UPON THE LIST O F BENEFICIARIES SUPPLIED TO HIM AND THE STATEMENT OF SHRI MUKESH CHOKSI. THE ADDITION MADE BY THE AO IS WITHOUT INDEPENDENT INVESTIGATION AND THE CONCLUSION ARRIVED BY THE AO IS NOT BASED ON APPRECIATION OF FACTS AND IS DIFFICULT TO ACCEPT. THE LEARNED CIT(A) DELETED THE ENTIRE ADDITION. 6. BEFORE US THE LEARNED D.R. FAILED TO BRING ANY CONT RARY EVIDENCE OR CASE LAW TO TAKE ANY CONTRARY VIEW. THEREFORE, WE D O NOT FIND ANY MERIT IN THE GROUND RAISED BY THE REVENUE. THE CASE LAW RELI ED BY THE LEARNED D.R. IN JANSAMPARK ADVERTISING & MARKETING (P) LTD. (SUP RA) IS NOT APPLICABLE ITA NO. 3933/MUM/2016 SMT. JAGRUTI VIJAY GORWADIA 4 ON THE FACTS OF THE CASE. I THE PRESENT CASE THE AS SESSEE HAS DISCHARGED IS ONUS BY FILING SUFFICIENT DOCUMENTARY EVIDENCES IN HER POWER AND POSSESSION AND DISCHARGED THE ONUS. HOWEVER, IN THE CASE OF JANSAMPARK ADVERTISING & MARKETING (P) LTD. (SUPRA) THE AO FAI LED TO CONDUCT ANY INVESTIGATION. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY, 2018. SD/ - SD/ - (G.S. PANNU) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 31 ST JULY, 2018 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -33, MUMBAI 4. THE PR. CIT - 21, MUMBAI 5. THE DR, H BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.