ITO 32(3)(1), MUMBAI V. RAMCHAND M. RAIMALANI (HUF), MUMBAI

ITA 5325/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8956 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-06-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 30-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Assessee Lawyers: R S PARMAR
• Keywords: Accommodation entries

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 5325/ MUM/20 16 ( ASSESSMENT YEAR : 2007 - 08 ) ITO 32(3)(1) ROOM NO.107, 1 ST FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI 400 020 VS. SHRI RAMCHAND M. RAIMALANI (HUF) F LAT NO.1303, BUILDING NO.3, RAHEJA CLASSIQUE, NEW LINK ROAD, OSHIWARA ANDHERI (W) MUMBAI 400 053 PAN/GIR NO. AAKHR5279P APPELLANT ) .. RESPONDENT ) REVENUE BY SHRI RAM TIWARI ASSESSEE BY SHRI R.S. PARMAR DATE OF HEARING 25 / 09 /201 7 DATE OF PRONOUNCEME NT 26 / 10 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - 44, MUMBAI DATED 26/05/2016 FOR A.Y.2007 - 08 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 O F THE IT ACT. 2. IN THIS APPEAL, REVENUE IS AGGRIEVED FOR DELETING THE ADDITION OF RS.35,77,016/ - ON ACCOUNT OF SALE OF SHARES . 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 4. IN THE COURSE OF ASSESSMENT U/S.143(3) R.W.S. 147, AO MADE ADDITION ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCE AMOUNTING TO RS.34,06,682/ - . AO OBSERVED THAT AS PER THE INFORMATION RECEIVED THE ASSESSEE HAD PURCHASED SHARES AMOUNTING TO RS.2,80,786/ - AND SOLD ITA NO. 5325/MUM/2016 SHRI RAMCHAND M. RAIMALANI (HUF) 2 SHARE AMOUNTING TO RS.34,06,682/ - . DURING THE COURSE OF ASSESSM ENT PROCEEDINGS ASSESSEES REPRESENTATIVE WAS QUERIED WITH REGARD TO INFORMATION RECEIVED IN THE CASE OF THE ASSESSEE OF THE ACCOMMODATION ENTRIES. IN RESPONSE THE ASSESSEE S UBMITTED COPY OF PURCHASE BILLS AND OTHER DETAILS REQUIRED BY THE AO. HOWEVER NOT CONVINCED WITH. 5. BY THE IMPUGNED ORDER, CIT(A) DELETED THE ADDITION AFTER OBSERVING AS UNDER: - 3.6 I HAVE GONE THROUGH THE FACTS OF THE CASE AND ALSO THE CONTENTIONS OF THE APPELLANT ALONG WITH VARIOUS JUDICIAL DECISION EXISTING IN CASES RELATED WITH MUK ESH CHOKSI GROUP OF CASES. FROM A PERUSAL OF RECORD, IT IS SEEN THAT SIMILAR ADDITION WAS MADE BY THE AO IN A RELATED CASE NAMELY DEVIDAS M RAIMALANI FOR THE A.Y 2007 - 08. UPON APPEAL THE THEN CIT(A) VIDE HER ORDER DATED 23.07.2014 HAD DELETED THE ADDITION BY MAKING THE FOLLOWING COMMENTS. 'IT IS THE FACT THAT THE APPELLANT HAD MADE PURCHASES THROUGH THE BROKER ALLIANCE INTERMEDIATORS & NETWORK PVT LTD. BUT IT IS ALSO SEEN THAT THE ENTIRE TRANSACTIONS HAVE BEEN CARRIED OUT THROUGH BANK ACCOUNT AND PROPERLY D EMATED AND THE AO HAS NOT FOUND ANY IN FIRMITY IN THE BROKERS NOTE. AS ALREADY HELD IN THE CASE OF SHRI MUKESH R. MAROLIA BY THE HON. ITAT, MUMBAI, IT CANNOT BE HELD THAT TRANSACTIONS WERE SHAM. LOOKING INTO THE FACTS OF THE CASE THE CONTENTIONS OF THE APPE LLANT ARE ACCEPTED AND T HE APPEAL IS ALLOWED'. IT IS CLEAR FROM FACTS OF THE CASE THAT THE APPELLANT H AD SUBMITTED BEFORE THE AO PURCHASE & SALES BILLS, COPY OF LEDGER A/C WITH DEMAT A/C, AND BANK STATEMENT PAGE. THE SHARES PURCHASED AND ARE RECEIVED IN D EMAT A/C AND DELIVERY ISSUED OUT OF DEMAT A/C FOR SALE OF SHARES. THE PAYMENT FOR PURCHASES OF SHARES HAVE BEEN MADE BY CHEQUE AND HE HAD RECEIVED CHEQUE FOR SALE OF SHAR ES, WHICH CAN BE SEEN IN BANK ST ATEMENT. 3. 7 ON SIMILAR ISSUE AND FACTS, WHERE ADDITIO NS WERE MADE ON THE BASIS OF STATEMENTS MADE BY SHRI MUKESH CHOKSHI, DIFFERENT TRIBUNALS HAVE RULED IN FAVOUR OF ASSESSEE. REFERENCE IS MADE TO ORDER OF ITAT MUMBAI IN THE CASE OF JAFFARALI K. RATTANSOY (2012)53 SOT 220 (MUM), ORDER OF ITAT JAIPUR IN THE C ASE OF ITO V. SMT MEERA VAID (2015)154 ITD 128 (JAIPUR) AND ORDER OF ITAT PUNE IN THE CASE OF SMT SMITA PATIL V. ACIT (2014) 159 TTJ 182 (PUNE). AFTER CONSIDERING THE TOTALITY OF FACTS AND VARIOUS JUDICIAL DECISION AND ALSO AFTER CONSIDERING MY LD. PREDECE SSOR'S ORDER IN THE RELATED CASE I HAVE COME TO A CONCLUSION THAT ADDITION OF RS.34,06,682/ - AND ITA NO. 5325/MUM/2016 SHRI RAMCHAND M. RAIMALANI (HUF) 3 RS.1,70,334/ - IS UNCALLED FOR AND THE SAME ARE DELETED. GROUNDS OF APPEAL NOS. 1,2 & 3 ARE ALLOWED. 6. IT WAS ARGUED BY LEARNED DR THAT AO HAS DISCUSSED IN GR EAT DETAIL THE MODUS OPARANDI OF MUKESH CHOKSI GROUP AND ALSO INVITED OUR ATTENTION TO THE STATEMENT MADE BY HIM WHEREIN HE CONFESSED THAT HE IS ENGAGED IN PROVIDING ONLY ACCOMMODATION ENTRIES. 7. ON THE OTHER HA ND, LEARNED A R CONTENDED THAT DURING THE YEA R UNDER CONSIDERATION, ASSESSEE HAS MERELY SOLD SOME SHARES AND THE INCOME ARISING THERE FROM WAS OFFER ED UNDER THE HEAD SHORT TERMS CAPITAL GAIN AMOUNTING TO RS.5,70,964/ - . AS PER LEARNED A R ASSESSEE HAS NOT DEALT WITH ANY OTHER SHARES DURING THE YEAR UND ER CONSIDERATION. 8. I HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FIND FROM RECORD THAT AO HAS MADE ADDITION ON THE BASIS OF THE FINDINGS OF THE SCAM, WHICH WAS EXPOSED BY THE INVESTIGATION WIN G, MUMBAI, IN WHICH BOGUS TRANSACTIONS OF THE SHARES AND COMMODITIES WERE SHOWN AND THE ASSESSEE WAS ONE OF THE BENEFICIARY. SHRI MUKESH CHOKSHI WAS THE MENTOR AND THE MAIN PERSON IN THE SAID GROUP HAS ADMITTED THAT HE WAS ENGAGED INTO PROVIDING ACCOMMODAT ION BILLS THROUGH VARIOUS CONCERNS RUN BY HIM. ACCORDING TO THE STATEMENT GIVEN BY SHRI MUKESH C CHOKSI, THE GROUP CONTROLLER OF MAHASAGAR SECURITIES PVT. LTD, THE ASSESSEE HAS OBTAINED BOGUS ACCOMMODATION ENTRIES IN RESPECT OF PURCHASE OF RS, 2,80,786/ - A ND SALE OF SHARES OF RS. 34,06,682/ - THROUGH ALLIANCE INTERMEDIARIES 85 NETWORK ITA NO. 5325/MUM/2016 SHRI RAMCHAND M. RAIMALANI (HUF) 4 PVT. LTD. AS PER THE REPLY FURNISHED BY THE NATIONAL S TOCK EXCHANGE NO TRADE WAS DONE ON THE EXCHANGE DURING THE PERIOD UNDER CONSIDERATION. HOWEVER, THE CIT(A) WITHOUT CONTRO VERTING THE EVIDENCE RECORDED BY THE AO, DELETED THE ADDITION AFTER RELYING ON THE DECISION OF OTHER CIT(A) IN THE CASE OF DEVIDAS M RAIMALANI FOR THE A.Y 2007 - 08 . THE CIT(A) HAS ALSO RELIED ON SOME OF THE TRIBUNAL DECISION WITHOUT POINTING OUT AS TO HOW THE FACTS OF THAT CASE WERE SIMILAR TO THAT OF THE ASSESSEE. ACCORDINGLY, I SET ASIDE THE ORDER OF CIT(A) AND MATTER IS RESTORED BACK TO THE FILE OF THE AO FOR DECIDING AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. I DIRECT ACCORDINGLY. 9. IN THE RE SULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. OR DER PRONOUNCED IN THE OPEN COURT ON THIS 26 / 10 /2017 SD/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 26 / 10 /201 7 KARU NA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//