SUNIL PRAKASH, MUMBAI V. ACIT 15(2), MUMBAI

ITA 6494/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8129 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2005-2006
• Appeal Filed On: 22-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VISHWAS MUNDHEDR
• Assessee Lawyers: ADITYA AJGAONKARAR
• Keywords: Unexplained cash credit; Unexplained investment; Business income; Search and seizure; Opportunity of cross examination; Source of fund; Tangible material; Accommodation entries
• Section: 131; 68; 69; 148; 132

Judgement Text

, , , , INCOME-TAX APPELLATE TRIBUNAL EBENCH M UMBAI , , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & PAWAN SINGH, JUDICIAL MEMBER ./I.T.A./6494/MUM/2014 , /ASSESSMENT YEAR: 2005-06 SHRI SUNIL PRAKASH 703-A, LAKSHCHANDI APARTMENT KRISHNA VATIKA MARG, GOKULDHAM GOREGAON(E), MUMBAI-400 063 PAN:AKIPP 6393 F VS. ACIT -15(2) MUMBAI. ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: SHRI VISHWAS MUNDHE-DR ASSESSEE BY: SHRI ADITYA AJGAONKAR-AR / DATE OF HEARING: 02.01.2017 / DATE OF PRONOUNCEMENT: 08.03.2017 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DT.27.08.2014, OF THE CIT(A)- 26, MUMBAI THE ASSESSEE HAS FILED THE PRESENT APPEAL.ASSESSEE,AN INDIVIDUAL,FILED HIS RET URN OF INCOME ON 29.10.2005,DECLARING TOTAL INCOME OF RS.18.10 LAKHS.ON 25.3.2011,AFTER R ECODING THE REASONS FOR RE-OPENING THE AO ISSUED A NOTICE U/S.148 OF THE ACT.HE COMPLETED THE ASSESSMENT U/S.143(3) R.W.S.148 OF THE ACT ON 22.12.2011,DETERMINING HIS INCOME AT RS. 18,10,960/-. BRIEF FACTS : EFFECTIVE GROUND OF APPEAL IS ABOUT TREATING THE IN COME FROM SHORT TERM CAPITAL GAIN (STCG)OF RS.6.05 LAKHS,AS UNDISCLOSED INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES AND THE ENHANCEMENT OF THE ADDITION. A SEARCH AND SEIZURE ACTION U/S.132 OF THE ACT WAS CARRIED OUT IN CASE OF M/S. MAHASAGAR SECURITIES PVT.LTD.(MSPL).MUKESH M. CHOKSHI.(MMC) A ND JAYESH K. SAMPAT(JKS)WERE THE DIRECTORS OF THE MAHASAGAR GROUP, ONE OF THE MAIN C OMPANIES OF THE GROUP WAS M/S. ALLIANCE INTERMEDIARIES AND NETWORK PVT. LTD. (ALLI ANCE).IT WAS OBSERVED BY THE AO THAT MMC AND GROUP CONCERNS WERE ENGAGED IN THE BUSINESS OF ISSUING FRAUDULENT BILLS AND PROVIDING BOGUS SPECULATION PROFIT/LOSSES,THAT HE HAD ENTERED INTO TRANSACTION WITH ALLIANCE TO THE TUNE OF RS.26.31 LAKHS,THAT IT HAD PURCHASED SHARES OF KARUNA CABLE LTD. (KCL) THROUGH ALLIANCE.THE AO ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE ON 07.12.2011 IN THAT REGARD.IN ITS REPLY,THE ASSESSEE SAID THAT THE SHAR ES WERE TRANSFERRED THROUGH D-MAT ACCOUNT, 6494/M/14-SUNIL PRAKASH(05-06) 2 THAT HE HAD SOLD SHARES THROUGH STOCK EXCHANGE,THAT SHARE TRANSACTIONS ENTERED INTO WERE GENUINE,THAT HE HAD PAID MONEY/RECEIVED MONEY THROU GH BANKING CHANNELS. THE AO OBSERVED THAT THE ASSESSEE HAD TAKEN DELIVERY OF SH ARES THROUGH OFF MARKET AND SOLD THE SHARES THROUGH MARKET,THAT HE COULD MANAGE THE TRANSACTION THROUGH TOUCH AND GO TECHNIQUE. HE ASKED THE ASSESSEE AS TO WHY STCG SHOULD NOT BE TRE ATED AS UNDISCLOSED INCOME OF THE ASSESSEE U/S.68 OF THE ACT. IN ITS REPLY THE ASSES SEE ARGUED THAT IN THE STATEMENTS OF MMC HIS NAME WAS NOT APPEARING.HE ASKED FOR CROSS EXAMINATI ON OF MMC. AS PER THE AO THE DDIT (INV.)HAD SENT A LIST OF PERSONS WHO HAD PURCHASED BOGUS BILLS OR HAD CLAIMED BOGUS PROFIT/ LOSS,THAT IN THAT LIST NAME OF THE ASSESSEE WAS AP PEARING. THE AO ISSUED SUMMONS U/S. 131 OF THE ACT TO MMC.BUT HE DID NOT APPEAR.CONSIDERING TH E CIRCUMSTANTIAL EVIDENCES AND HUMAN PROBABILITY,THE AO HELD THAT THE TRANSACTIO NS ENTERED IN BY THE ASSESSEE WERE NOT 100%GENUINE.ACCORDINGLY,HE HELD THAT STCG OF RS.6.0 5 LAKHS SHOWN IN THE BOOKS OF ACCOUNT WAS TO BE TREATED AS UNDISCLOSED CREDIT/INC OME OF THE ASSESSEE U/S.68 OF THE ACT. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PR EFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).BEFORE HIM,THE ASSESSEE C HALLENGED THE RE-OPENING STATING THAT THERE WAS NO TANGIBLE MATERIAL TO ISSUE NOTICE U/S. 148 OF THE ACT,THAT THE ASSESSEE WAS NOT ALLOWED CROSS EXAMINATION OF MMC. AFTER CONSIDERING THE ASSESSMENT ORDER AND SUBMISSI ON OF THE ASSESSEE, THE FAA HELD THAT THE ASSESSEE HAD NOT PRODUCED ANY EVIDENCE TO ESTABLISH THAT CROSS EXAMINATION OF MMC WAS REQUESTED FOR,THAT NO PREJUDICE WAS CAUSED TO THE A SSESSEE IF OPPORTUNITY OF CROSS EXAMINATION WAS NOT GIVEN, THAT MUKESH CHOKSHI HAD PROVIDED ACC OMMODATION ENTRIES TO LARGE NUMBER OF PEOPLE,THAT THE ASSESSEE WAS NOT JUSTIFIED IN SEEK ING THE OPPORTUNITY FOR CROSS EXAMINING MMC.REFERRING TO THE CASE OF KANWAR NATWAR SINGH O F HON'BLE SUPREME COURT AND OTHER CASES HE HELD THAT THE ARGUMENT OF CROSS EXAMINATIO N WAS RAISED WITH THE SOLE OBJECT OF OBSTRUCTING THE PROCESS OF LAW,THAT THE EVIDENCE AV AILABLE ON RECORD WAS SUFFICIENT TO SUPPORT THE STAND TAKEN BY THE AO.WITH REGARD TO THE STCG, THE FAA OBSERVED THAT THE ASSESSEE HAD FURNISHED COPIES OF DMAT STATEMENT IN SUPPORT OF PU RCHASE & SALE OF SHARES, THAT HE HAD RELIED UPON THE CASES OF PRASHANT JOSHI (324ITR154) ; BAIJNATH AGARWAL (40SOT475); JAFFER ALI K RATTONSEY (53SOT220).HE HELD THAT MMC AND THE ASSOCIATE GROUP CONCERNS WERE PROVIDING BOGUS ACCOMMODATION ENTRIES.HE REFERRED T O STATEMENTS RECORDED BY THE OFFICERS OF INVESTIGATION WING DURING SEARCH PROCEEDINGS.HE OBSERVED THAT SALE AND TRANSFER OF SHARES WERE SHOWN BUT PURCHASES WERE NOT SUBSTANTIATED,THA T THE SOURCES OF FUNDS FOR PURCHASES REMAINED UNDISCLOSED,THAT THE ASSESSEE HAD NOT MAD E ANY GENUINE PURCHASES OF SHARES OF 6494/M/14-SUNIL PRAKASH(05-06) 3 KCL,THAT THE PURCHASE OF SHARES OF KCL WAS THROUGH ALLIANCE,THAT ASSESSEE HAD SOLD THE SHARES THROUGH OTHER BROKER, THAT HE COULD NOT HAVE PURCHASED THE SHARES FROM ALLIANCE, THAT THE SALES OF SHARES WAS BEYOND DOUBT,THAT THE GENUI NENESS OF THE TRANSACTION WAS NOT PROVED, THAT THE D-MAT STATEMENT PRODUCED BY ASSESSEE SHOW ED THAT SHARES HAD BEEN TRANSFERRED FROM ALLIANCE, THAT IT WAS AN ACCOMMODATION ENTRY.THE FA A ISSUED NOTICE FOR ENHANCING THE INCOME AND TO TREAT IT AS UNEXPLAINED CASH CREDIT.F INALLY, HE HELD THAT SALE PROCEEDS OF SHARES SOLD BY THE ASSESSEE AMOUNTING TO RS.32.34 LAKHS,WA S TO BE TREATED AS UNEXPLAINED CASH CREDIT AND THAT SAME WAS TO BE ASSESSED IN HIS HANDS UNDER THE HEAD INCOME FROM OTHER SOURCES. 5. BEFORE US,IT WAS ARGUED THAT THE SHARES WERE PURCHA SED AND SOLD THROUGH DMAT ACCOUNT, THAT PAYMENTS MADE FOR PURCHASE WAS THROUGH BANKIN G CHANNELS, THAT THE FAA HIMSELF HAD NOT DOUBTED THE SALE OF SHARES, THAT HE HAD ADDED T HE ENTIRE SALE PROCEEDS TO THE INCOME OF THE ASSESSEE,THAT THE ASSESSEE HAD ASKED FOR CROSS EXAM INATION OF MMC.HE REFERRED TO THE CASE OF SMT. ANANYA SINGH (ITA/6493/MUM/2014-AY 2005-06 DT. 11.03.15) AND STATED THAT FACTS OF BOTH THE CASES ARE IDENTICAL,THAT IN THAT MATTER AL SO THE ASSESSEE HAD PURCHASED SHARES OF KCL, THAT THE FAA ENHANCED THE ADDITION TO RS.12.27 LAKH S AS AGAINST ADDITION OF RS.2.08 LAKHS MADE BY THE AO.THE DEPARTMENTAL REPRESENTATIVE(DR)S UPPORTED THE ORDER OF THE FAA. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE ASSESSEE HAD PURCHASED 1.74 LAKHS SHARES OF KCL FOR RS.26.29 LAKHS THROUGH ALLIANCE,THAT HE SOLD THOSE SHARES FOR RS.32.34 LAKHS -THROUGH ANOTH ER BROKER,THAT HE HAD SHOWN PROFIT OF RS.6.05 LAKHS UNDER THE HEAD CAPITAL GAINS,THAT TRA NSACTION WAS THROUGH D MAT ACCOUNT,THAT PAYMENT FOR PURCHASING THE SHARES AND THE SALES PRO CEEDS WERE MADE THROUGH BANKING CHANNELS, THAT THE AO HAD TREATED THE TRANSACTION A S BUSINESS INCOME AS AGAINST STCG, CLAIMED BY THE ASSESSEE,THAT DURING THE APPELLATE P ROCEEDINGS,THE FAA MADE ENHANCED THE INCOME OF THE ASSESSEE,.WE FIND THAT NOTICE U/S. 14 8,IN THE MATTER WAS ISSUED AFTER FOUR YEAR AND IN THE REASONS RECORDED THE AO HAS NOT MENTIONE D AS TO HOW THE FAILURE ON PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY THE MATERIAL F ACTS LED TO UNDER ASSESSMENT AND RESULTANT ESCAPEMENT OF INCOME.ONLY ON THIS GROUND THE APPEAL FILED BY THE ASSESSEE CAN BE ALLOWED. BUT,WE WOULD LIKE TO DISCUSS THE MERITS OF THE CASE ALSO.THE AO HAD RELIED UPON THE STATEMENT OF MMC TO MAKE THE ADDITION.THUS,WE HAD W ITNESS OF THE AO.IT WAS HIS DUTY TO PROVIDE THE COPY OF THE STATEMENT OF MMC TO THE ASS ESSEE AND TO AFFORD THE OPPORTUNITY TO CROSS EXAMINE HIM.THE AO ON REQUEST OF THE ASSESSEE HAD ISSUED A SUMMON TO MMC,BUT HE DID NOT APPEAR.THEREFORE,WE DO NOT UNDERSTAND HOW T HE FAA HAS OBSERVED THAT THE ASSESSEE 6494/M/14-SUNIL PRAKASH(05-06) 4 DID NOT MAKE ANY SPECIFIC REQUEST FOR CROSS EXAMINA TION OF MMC.IT IS ALSO VERY STRANGE THAT THE FAA,BEING A JUDICIAL AUTHORITY,HAS HELD THAT NO N PROVIDING OPPORTUNITY OF CROSS EXAMINATION WOULD NOT VITIATE THE ASSESSMENT PROCEE DINGS.IF THE AO/ASSESSEE WANTS TO RELY UPON THE STATEMENTS OF SOMEONE IT IS THEIR DUTY TO PROVE THE TRUTHFULNESS OF SUCH STATEMENTS. FILING OF AFFIDAVITS/CROSS EXAMINATION OF THE PERSO N MAKING ASSERTION CAN BE MEANS OF VERIFYING THE GENUINENESS OF THE STATEMENTS.THERE C AN BE OTHER MEANS ALSO.BUT,THE BASIC PRINCIPLES REMAIN THE SAME-PERSON RELYING UPON STAT EMENT OF SOMEONE HAS TO PROVE IT AND ESPECIALLY WHEN IT IS CHALLENGED BY ANOTHER PARTY.W E HAVE NOT COME ACROSS THE STATEMENT OF MMC WHERE HE HAS INCLUDED THE NAME OF THE ASSESSEE TO WHOM HE OR THE GROUP CONCERNS HAD ISSUE FICTITIOUS BILLS OR BILLS FOR CLAIMING NON-GE NUINE PROFIT/ LOSS.MMC HAS GIVEN A GENERAL STATEMENT DISCLOSING BROADER OUTLINE OF THE TRANSAC TIONS ENTERED INTO BY HIM AND THE GROUP ENTITIES.HE HAD NEVER STATED THAT ALL THE TRANSACTI ONS ENTERED INTO BY GROUP WERE NON GENUINE. HIS STATEMENT WAS A GOOD LEAD TO TAKE THE INVESTIGA TION FURTHER AND MAKE SPECIFIC QUERIES. BUT IT WAS NOT DONE.NOW,WE ARE LEFT WITH THE GENERAL ST ATEMENT OF MMC ON SIDE AND ON THE OTHER SIDE ARE THE FACTS LIKE PAYMENT/RECEIPT OF SHARE T RANSACTION VALUE THROUGH BANKING CHANNELS, TRANSFER OF SHARES IN AND FROM THE D-MAT ACCOUNT,FA AS FINDING THAT THE SALE WAS NOT IN DOUBT,NON OBSERVATION OF PRINCIPLE OF NATURAL JUSTI CE BY NOT PROVIDING CROSS EXAMINATION OF MMC.IF ALL THESE FACTS AND CIRCUMSTANCES ARE WEIGHE D IN THE SCALE OF REASONING,IT WOULD TILT IN FAVOUR OF THE ASSESSEE.WE ARE OF THE OPINION THA T THERE WAS NO JUSTIFICATION ON PART OF THE FAA TO DIRECT THE AO TO TAX THE ENTIRE SALE PROCEED OF SHARES IN THE HANDS OF THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION.SIMILARLY,THE A O WAS NOT JUSTIFIED TO HOLD THE STCG AS BUSINESS TRANSACTION.THE ASSESSEE WAS NOT DEALING I N THE SHARES AND SECURITIES AND THE SHARES OF KCL WERE HELD BY HIM AS INVESTMENT AND NOT AS ST OCK IN TRADE.HERE,WE WOULD LIKE TO REFER TO THE CASE OF SMT. ANANYA SINGH (SUPRA).WE FIND T HAT THE FACTS OF THAT CASE ARE IDENTICAL TO THE FACTS OF THE CASE UNDER CONSIDERATION.THE ORDER OF ANANYA SINGH (SUPRA), READS AS UNDER : 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND PERUSED M ATERIAL ON RECORD. THE FATS IN BRIEF ARE THAT A SEARCH AND SEIZURE ACTION U/S.132 OF THE I.T . ACT 1961 WAS CONDUCTED BY THE INVESTIGATION WING OF THE INCOME TAX DEPARTMENT, IN THE CASE OF M /S. MAHASAGAR SECURITIES PVT. LTD. ON 25.11.2009. SHRI MUKESH M. CHOKSI AND SHRI JAYESH K . SAMPAT WERE THE DIRECTOR OF M/S. MAHASAGAR SECURITIES PVT. LTD AND ITS RELATED GROUP OF 34 ODD COMPANIES OUT OF WHICH THE PROMINENT ARE BEING M/S. ALLIANCE INTERMEDIARIES AN D NET WORK PVT. LTD, M/S. MIHIR AGENCIES PVT. LTD, M/S. GOLD STAR FINVEST PVT. LTD, M/S. RIC HMOND SECURITIES PVT. LTD. ETC ALL RUN BY SHRI. MUKESH M CHOKSHI, WERE FOUND TO BE ENGAGED IN BOGUS BILLING ACTIVITIES AND IN THE BUSINESS OF PROVIDING BOGUS SPECULATION PROFIT/LOSS, COMMODITIE S, PROFIT/LOSS ON COMMODITY TRADING (THROUGH MCX) AND HAD BEEN CONTINUING THIS BUSINESS FOR MANY YEARS. THE LIST OF CLIENTS WHO HAVE TAKEN ENTRIES FROM THESE COMPANIES WAS EXTRACT ED FROM THE COMPUTER DATA SEIZED FROM M/S. MAHASAGAR SECURITIES PVT. LTD OFFICE AND HAS B EEN FOUND TO CONSIST OF MANY BENEFICIARIES 6494/M/14-SUNIL PRAKASH(05-06) 5 HAVE TAKEN BOGUS CAPITAL GAIN/ SPECULATIVE PROFIT/ BOGUS CAPITAL LOSS ACCOMMODATION ENTRIES/BILLS IN F.Y. 2003- 04 AND 2004-05. THE AO OBSERVED THAT AFTER GOING THROUGH THE INFORMATION, IT WAS FOUND THAT ASSESSEE SMT. ANANYA SINGH HAS ENTERED INTO TRANSACTIONS TO THE EXTENT OF RS.10,16,166/- WITH M/S. ALLIANCE INTERME DIARIES AND NET WORK PVT. LTD DURING THE F.Y.2004-05 RELEVANT TO A.Y. 2005-06. THE ASSESSEE HAD PURCHASED SHARES OF KARUNA CABLE LTD. 3. SEARCH ACTION U/S 132 OF THE INCOME-TAX, 1961 WA S ALSO CARRIED ON MUKESH CHOKHI, DIRECTOR OF M/S ALLIACNE INTERMEDIATARY PVT. LTD, WHEREIN HE HAS ACCEPTED THAT HE WAS INDULGED IN PROFITING BOGUS BILLING AND BOGUS GAIN AND LOSS THR OUGH STOCK EXCHANGE AND COMMODITY EXCHANGE. IN THE LEDGER ACCOUNT OF M/S. ALLIANCE IN TERMEDIATARY PVT. LTD, ASSESSEES NAME WAS REFLECTED, THIS WAS ALSO INFORMED TO THE ASSESSEE I N THE REASONS OF RE-OPENING. THE ASSESSEE HAS SUBMITTED THAT ASSESSEE HAD PAID/RECEIVED MONEY THR OUGH BANK ACCOUNT, THE SHARES WERE TRANSFERRED THROUGH DE-MATE ACCOUNT AND ASSESSEE HA D SOLD THE SHARES THROUGH STOCK EXCHANGE THE TRANSITIONS ENTERED BY ASSESSEE WAS GENUINE. 4. IN VIEW OF THE ABOVE DISCUSSION THE AO BROUGHT T O TAX THE SHORT TERM CAPITAL GAIN OF RS.2,08,693/- EARNED BY THE ASSESSEE AND WHICH HAD BEEN BROUGHT IN THE BOOKS OF THE ASSESSEE. ACCORDINGLY THE AO MADE AN ADDITION OF RS.2,08,693/ - U/S.68 OF THE I.T. ACT. 5. BY THE IMPUGNED ORDER, THE LD. CIT(A) HELD THAT THE SALE PROCEEDS OF SHARES RECEIVED BY THE ASSESSEE AMOUNTING TO RS.12,27,623/- WAS UNEXPLAINE D CASH CREDIT. THE CIT(A), THEREFORE, DIRECTED THE AO TO ASSESS RS.12,27,623/- AS INCOME FROM OTHER SOURCES FROM THE BOGUS SHARES TRANSACTION. THE INCOME ASSESSED BY AO WAS ACCORDIN GLY ENHANCED. 6. AGAINST ABOVE ORDER OF LD. CIT(A), ASSESSEE IS I N FURTHER APPEAL BEFORE US. 7. THE LD. AR SUBMITTED THAT ASSESSEE GENUINELY PUR CHASE THE SHARES, OUR ATTENTION WAS INVITED TO THE COPIES OF PURCHASE BILLS AND CONTRACT NOTES OF KARUNA CABLES LTD. PLACES AT PAGES 8-17 OF THE PAPER BOOK. OUR ATTENTION WAS ALSO INVITED TO T HE COPY OF LEDGER ACCOUNT FOR THE PERIOD FROM 1/4/2004 TO 31/3/2005 AND 1/4/2005 TO 31/3/2006 IN THE BOOKS OF THE ASSESSEE AND CONFIRMATION OF BROKER ALLIANCE INTERMEDIARIES AND NETWORK PVT. LTLD., AS PLACED AT PAGES 18-20 OF THE PAPER BOOK. THE LD. AR ALSO HIGHLIGHTED COPY OF DEMAT STA TEMENT OF ICICI BANK AND COPIES OF SALE BILLS AND CONTRACT NOTES FOR SALE OF SHARES OF KARU NA CABLES LTD. TO SUBSTANTIATE ITS CLAIM FOR GENUINE PURCHASE AND SALE. ASSESSEE INVITED OUR ATT ENTION TO THE LEDGER ACCOUNT COPY OF THE BROKER RAMJIDAS NAGARMAL CONS. P. LTD. IN THE BOOKS OF THE ASSESSEE FOR THE PERIOD FROM 1/4/2004 TO 31/3/2005. COPY OF THE BANK STATEMENT O F ICICI BANK SHOWING PAYMENT AND RECEIPT IN RESPECT OF PURCHASE AND SALE OF SHARES. 8. IN VIEW OF THE ABOVE DOCUMENTARY EVIDENCES, IT W AS CONTENDED BY LD. AR THAT THE ASSESSEE PURCHASED 67,200 SHARES OF KARUNA CABLES LIMITED FR OM M/S. ALLIANCE INTERMEDIARIES & NETWORK LTD. (ALLIANCE) FOR RS.10,15,405/-. THE SAI D SHARES WERE SOLD THROUGH STOCK EXCHANGE PLATFORM WHERE BY TRANSACTION WAS SUBJECTED TO STT AND THE ASSESSEE EARNED A PROFIT OF RS.2,08,693/- FROM THESE TRANSACTIONS. THE ASSESSEE CLAIMED SUCH PROFIT AS SHORT TERM CAPITAL GAIN (STCG) TAXABLE @10% U/S.11A OF THE INCOME TAX ACT,1961. 9. AS PER THE LD. AR THERE IS NOT EVEN SINGLE EVID ENCE WITH THE AO WHICH POINTS OUT THAT TRANSACTION IN QUESTION IS NOT GENUINE. THE LD. AO MADE ITS OWN PRESUMPTION AND HELD THAT TRANSACTION APPARENT IS NOT REAL WITHOUT ANY BASIS. 10. ON THE OTHER HAND, LD. DR RELIED ON THE FACTS R ECORDED BY THE LOWER AUTHORITIES IN THEIR RESPECTIVE ORDER. 11. WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFU LLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND ALSO PERUSED THE DETAILS OF PURCHASE AND SALES FILED BY THE ASSESSEE WITH REGARD SHARES OF KARUNA CABLES LTD.. WE FOUND THAT DURING THE YEAR ASSESSEE HAS PURCHASED 67.200 SHARES OF KARUNA CABLES LTD. FROM ALLIANCE AT MARKE T RATE FOR RS.10,15,405/-. COPIES OF 6494/M/14-SUNIL PRAKASH(05-06) 6 CONTRACT NOTES AND BILLS ISSUED BY ALLIANCE TOWARDS PURCHASE OF SHARES WERE PLACED ON PAGE 12- 17 OF COMPILATION. COPY OF LEDGER ACCOUNT FOR THE B ROKER M/S. ALLIANCE INTERMEDIARIES & NETWORK LTD. IN THE BOOKS OF THE APPELLANT FOR THE PERIOD FROM 01.04.2004 TO 31.03.2005 AND 01.04.2005 TO 31.03.2006 ALONGWITH ITS CONFIRMATION OF ACCOUNTS WAS ALSO PLACED AT PAGES 18- 20 OF COMPILATION. BANK STATEMENT OF THE ASSESSEE W HEREBY THE PAYMENTS MADE TO THE BROKER HAVE DULY BEEN REFLECTED, WERE ALSO ENCLOSED IN THE PAPER BOOK. 12. WE ALSO FOUND THAT THE ABOVE SHARE WERE CREDITE D IN THE DEMAT ACCOUNT OF THE ASSESSEE HELD WITH ICICI BANK, COPY OF DEMAT STATEMENT WAS PLACED ON PAGE 21-22 OF COMPILATION. A REFERENCE TO THE SAME WOULD SHOW THAT THE SHARES OF KARUNA CABLES WERE RECEIVED IN THE DEMAT ACCOUNT OF THE ASSESSEE ON PURCHASE AND THEN TRANSF ERRED TO THE DP ACCOUNT OF THE ASSESSEE MAINTAINED WITH THE BROKER RAJIDAS NAGARMAL CONSULT ANTS PVT. LTD. THROUGH WHOM SALES HAVE BEEN EFFECTED ON THE STOCK EXCHANGE PLATFORM. WE AL SO FOUND THAT IN THE INSTANT CASE, ONLY PURCHASE HAS BEEN EFFECTED FROM ALLIANCE, WHEREAS S ALE HAS BEEN EFFECTED THROUGH ANOTHER BROKER I.E. M/S. RAMJIDAS NAGARMAL CONSULTANTS PVT. LTD. WHO HAS NO CONNECTION WITH MR. MUKESH CHOKSHI AND THERE IS NOTHING ON RECORD WHICH SUGGESTS THAT M/S. RAMJIDAS NAGARMAL CONSULTANTS PVT. LTD. HAS ISSUED BOGUS BILLS TO THE ASSESSEE OR ABOVE SALE TRANSACTION IS NOT GENUINE. WITH REGARD TO THE STATEMENT OF MR. MUKESH CHOKSHI RECORDED, IT WAS CONTENDED BY LD. AR THAT IN THE STATEMENT OF MR. MUKESH CHOKSHI, THE ASSESSEE WAS NOT NAMED. FURTHER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE HAD REQUESTED THE LD. AO TO ALLOW AN OPPORTUNITY TO CROSS EXAMINE MR. MUKESH CHOKSHI. HO WEVER THE LD. AO COULD NOT MAKE AVAILABLE MR. MUKESH CHOKSHI FOR CROSS EXAMINATION. 13. LD. AR BROUGHT OUR ATTENTION TO THE DECISION OF COORDINATE BENCH OF THE TRIBUNAL IN THE CASES OF MRS.RASILA N. GADA & ORS. DECIDED IN ITA N O.1773/MUM/2010 & OTHER CONNECTED APPEALS, VIDE CONSOLIDATED ORDER DATED 8-8-2012, WH EREIN IN ALMOST IDENTICAL FACTS AND IN RELATION TO THE ADDITIONS MADE ON THE BASIS OF THE STATEMENT OF SAID MR. MUKESH CHOKSI, THE TRIBUNAL HAS THE ACTION OF THE CIT(A) IN DELETING T HE ADDITIONS BY OBSERVING AS UNDER :- '5.1. AFTER PERUSING THE MATERIAL AVAILABLE WE ARE OF THE OPINION THAT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE FAA DOES NOT SUFFER FROM ANY LEGAL INFIRMITY. HON'BLE BOMBAY HIGH COURT IN THE CASE OF SHARADA CREDIT AND MUKESH R MAROLIA HAS UPHELD THE ORDERS OF THE ITAT, MUMBAI. IN THOSE CASES IT HAS BEEN HELD THAT SHARES PURCHASED/SOLD IN THE OFF MARKET CANNOT BE CONSIDER ED ILLEGAL TRANSACTIONS. WE FIND THAT THE AO HAD NOT AFFORDED OPPORTUNITY OF CROSS-EXAMINATI ON OF SHRI MUKESH CHOKSI TO THE ASSESSEE. IT IS NOTEWORTHY THAT SH. CHOKSI HAD NOT NAMED THE ASSESSEE IN HIS STATEMENTS AS THE BENEFICIARY WHO HAD AVAILED BOGUS ENTRIES. WE H AVE NOTICED THAT THE ASSESSEE HAD SHOWN THE INVESTMENT IN SHARES IN THE BALANCESHEET OF THE EARLIER ASSESSMENT YEAR AND HER RETURN OF INCOME WAS ACCEPTED BY THE DEPARTMENT. WE ARE. OF T HE OPINION THAT ONCE SALES/PURCHASE OF SHARES IS ACCOMPANIED BY THIS KIND OF EVIDENCES THE GENUINENESS OF THE SAID TRANSACTIONS CANNOT BE DOUBTED. NONPAYMENT OF SIT CANNOT BE AND SHOULD NOT BE BASIS FOR MAKING ADDITION OF THE SECTION 68 OF THE ACT. FAA HAS CATE GORICALLY HELD THAT ALL THE NECESSARY DETAILS ABOUT PURCHASE AND SALE OF SHARES WERE MADE AVAILABLE TO THE AO DURING ASSESSMENT PROCEEDINGS. WE HAVE PERUSED THE CASE LAWS RELIED U PON BY THE AR. IN THE CASE OF MUKESH R MAROLIA (SUPRA) HON'BLE JURISDICTIONAL HIGH COURT H AS HELD AS UNDER: ' .... ON FURTHER APPEAL, THE ITAT BY THE IMPUGNED ORDER ALLOWED THE CLAIM OF THE ASSESSEE BY RECORDING THAT THE PURCHASE OF SHARES D URING THE YEAR 1999-2000 AND 2000- 2001 WERE DULY RECORDED IN THE BOOKS MAINTAINED BY THE ASSESSEE. THE ITAT HAS RECORDED A FINDING THAT THE SOURCE OF FUNDS FOR ACQ UISITION OF THE SHARES WAS THE AGRICULTURAL INCOME WHICH WAS DULY OFFERED AND ASSE SSED TO TAX IN THOSE ASSESSMENT YEARS. THE ASSESSEE HAS PRODUCED CERTIFICATES FROM THE AFORESAID FOUR COMPANIES TO THE 6494/M/14-SUNIL PRAKASH(05-06) 7 EFFECT THAT THE SHARES WERE IN-FACT TRANSFERRED TO THE NAME OF THE ASSESSEE. IN THESE CIRCUMSTANCES, THE DECISION OF THE ITAT IN HOLDING THAT THE ASSESSEE HAD PURCHASED SHARES OUT OF THE FUNDS DULY DISCLOSED BY THE ASSES SEE CANNOT BE FAULTED. SIMILARLY, THE SALE OF THE SAID SHARES FOR RS.1,41, 08,484/- THROUGH TWO BROKERS NAMELY, M/S RICHMOND SECURITIES PVT. LTD. AND M/S. SCORPIO MANA GEMENT CONSULTANTS PVT. LTD. CANNOT BE DISPUTED, BECAUSE THE FACT THAT THE ASSESSEE HAS RECEIVED THE SAID AMOUNT IS NOT IN DISPUTE. IT IS NEITHER THE CASE OF THE REVENUE THAT THE SHARES IN QUESTION ARE STILL LYING WITH THE ASSESSEE NOR IT IS THE CASE OF THE REVENUE THAT THE AMOUNTS RECEIVED BY THE ASSESSEE ON SALE OF THE SHARES IS MORE THAN WHAT IS DECLARED BY THE ASSESSEE. THOUGH THERE IS SOME DISCREPANCY IN THE STATEMENT OF THE DIRECTOR OF M/S . RICHMAND SECURITIES PVT. LTD. REGARDING THE SALE TRANSACTION, THE TRIBUNAL RELYING ON THE S TATEMENT OF THE EMPLOYEE OF M/S. RICHMAND SECURITIES PVT. LTD. HELD THAT THE SALE TRANSACTION WAS GENUINE. IN THESE CIRCUMSTANCES, THE DECISION OF THE ITAT IN HOLDING THAT THE PURCHASE A ND SALE OF SHARES ARE GENUINE AND THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN HOLDING THAT THE AMOUNT OF RS. 1, 41, 08, 484/-REPRESENTED UNEXPLAINED INVESTMENT UNDER SECTI ON 69 OF THE INCOME TAX ACT, 1961 CANNOT BE FAULTED.' WE ARE OF THE OPINION THAT THE FACTS OF THE CASE OF MUKESH R MAROLIA ARE SIMILAR TO THE FACTS OF THE CASES UNDER CONSIDERATION. RESPECTFULLY FOLLOWI NG THE ORDERS OF THE HON'BLE HIGH COURT AND THE COORDINATING BENCHES OF THE TRIBUNAL WE HOLD TH AT PURCHASE AND SALE OF SHARES BY THE ASSESSEE WAS A GENUINE TRANSACTION, AND HENCE, ADDI TION MADE BY THE AO CANNOT BE ENDORSED. UPHOLDING THE ORDERS OF THE FAA , WE DISMISS THE AP PEALS FILED BY THE AO. ' FACTS OF THE PRESENT CASE ARE BEING IDENTICAL TO TH E ABOVE CASE AND ALSO IN VIEW OF OUR OBSERVATIONS MADE ABOVE, THE IMPUGNED ADDITIONS IN THIS CASE ARE NOT CALLED FOR AND THE SAME ARE ACCORDINGLY ORDERED TO BE DELETED. CONSIDERING THE ABOVE AND REVERSING THE ORDER OF TH E FAA,WE DECIDE THE EFFECTIVE GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE,AS HIS ORDER CANNO T BE ENDORSED LEGALLY OR FACTUALLY. AS A RESULT,APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH MARCH, 2017. 8 , 2017 SD/- SD/- ( ( ( ( /PAWAN SINGH) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; /DATED : 08.03.2017. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENCH, ITAT, MUMBAI / , , . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.