SHEETAL PRITAM BHATIJA, MUMBAI V. ITO 19(1)(2), MUMBAI

ITA 69/MUM/2014

• Counselvise Citation: 6919914 RSA 2014
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: E
• Assessment Year: 2005-2006
• Appeal Filed On: 03-01-2014
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: PRAKASH JOTWANI
• Keywords: Search and seizure; Accommodation entries

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI . . , , BEFORE SHRI R.C.SHARMA , A M & MS. SUSHMA CHOWLA , J M ./ I TA NO. 69 / MUM/20 1 4 ( / ASSESSMENT YEAR : 200 5 - 2006 ) SHEETAL PRITAM BHATIJA, 902, OCEAN VIEW, 289B, UNION PARK,KHAR (W) , MUMBAI VS. ITO 19(1)(2), MUMBAI ./ ./ PAN/GIR NO. : A LRPB 1801 G ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI PRAKASH JOTWANI /REVENUE BY : SHRI NEIL PHILIP / DATE OF HEARING : 11 /0 6 / 2015 / DATE OF PRONOUNCEMENT 22/07 /2015 / O R D E R PER R.C.SHARMA (A.M) : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) FOR ASSESSMENT YEAR 1. A) THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN CONFIRMING A SUM OF RS. 5,20,2151 - AS INCOME FROM OTHER SOURCES IN - SPITE OF THE FACT THAT APPELLANT NEVER RECEIVED, EARNED OR ACCRUED ANY AMOUNT NOR DECLARED THE SAME IN ITS RETURN OF INCOME. B) THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN ACCEPTING THE FRAUDULENT CLAIM OF MAYUR CHOKSHI AND DISREGARDING THE ASSESSE E'S OWN BANK ACCOUNT WHERE THERE WAS NO CREDIT OF SUCH AMOUNTS AND ALSO NOT CONSIDERING THE AFFIDAVIT - CUM - DECLARATION FILED BY THE APPELLANT BEFORE THE LEARNED CIT(A). C) THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ALSO RELIED UPON THE FRAUDULENT ST ATEMENT BY THE DIRECTOR; BASED ON THE ITA NO. 69 /1 4 2 RELIANCE PLACED BY ASSESSING OFFICER WITHOUT GOING INTO THE DETAILS PERTAINING TO THE BANK ACCOUNT OF THE PAYER AS TO WHOM THE MONEY HAS BEEN GIVEN. D) THE LEARNED REPORT CALLED FOR BY THE THEN COMMISSIONER OF INCOME TAX (APPEAL) VIDE LETTER DATED 1710912012 HAS NOT BEEN REPLIED BY THE ASSESSING OFFICER FOR REASONS BEST KNOWN TO HIM. 2. THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR DELETE THE ABOVE GROUND OF APPEAL AT OR BEFORE THE HEARING OF THE ASSESSEE. PRAYER TH E APPELLANT PRAYS THAT THE SUITABLE DIRECTION TO THE LEARNED INCOME TAX OFFICER, 19 (1) (2) MUMBAI, BE GIVEN FOR PROPER RELIEF UNDER THE LAW. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE AO RECEIVED INFORMATION FRO M THE DDIT INV. UNIT - 1(4), MUMBAI THAT SUSPICIOUS TRANSACTIONS HAD TAKEN PLACE IN THE BANK ACCOUNTS OF M/S MAHASAGAR SECURITIES PVT. LTD. AND M/S GOD STAR FINVEST PVT. LTD. AND ITS RELATED COMPANIES, WHOSE DIRECTORS WERE S / SHRI MUKESH M. CHOKSI AND JAYE SH K. SAMPAT, A SEARCH AND SEIZURE ACTION U/ S.132 HAD BEEN CONDUCTED ON 25.11.09 ON THEIR PREMISES AND DURING THE COURSE OF SEARCH, IT WAS REVEALED THAT M/ S. MAHASAGAR SECURI TIES PVT. LTD. AND ITS RELATED GROUP OF 34 ODD COMPANIES (THE PROMINENT ONE BEING M/S. ALLIANCE INTERMEDIARIES & NETWORK PVT. LTD., M/S. MIHIR AGENCIES PVT. LTD., M/S. GOLDSTAR FINVEST PVT. 'LTD., ETC. - ALL RUN BY SHRI MUKESH CHOKSI), WERE ENGAGED IN FRAUDULENT BILLING ACTIVITIES AND WERE IN THE BUSINESS OF PROVIDING BOGUS SPECULATION PROFIT/LOSS, SHORT TERM/LONG TERM CAPITAL GAIN/LOSS, SHARE APPLICATION MONEY, COMMODITIES PROFIT/ LOSS ON COMMODITY TRADING (THROUGH MCX) AND HAD BEEN CONTINUING THIS BUSINESS ACTIVITY FOR MANY YEARS. FURTHER, ALONGWITH THE LETTER CONTAINING THE ABOVE ITA NO. 69 /1 4 3 INF ORMATION, THE DDIT (INV.) ANNEXED THE LIST OF CLIENTS FOUND FROM THE OFFICE PREMISES OF M/ S. MAHASAGAR SECURITIES PVT. LTD. THE NAME OF THE ASSESSEE ALSO APPEARS AS ONE OF THE BENEFICIARIES WHO HAD ENTERED INTO SECURITY TRANSACTIONS WORTH RS.5,20,215/ - A ND HAD TAKEN BOGUS CAPITAL GAIN/SPECULATIVE PROFIT/BOGUS CAPITAL LOSS ACCOMMODATION ENTRIES/BILLS IN THE F.Y. 2004 - 05. THE AO, THEREFORE FOUND THAT THE ASSESSEES INCOME AMOUNTING TO RS.5,20,215/ - CHARGEABLE TO TAX IN A.Y. 2005 - 06 HAD ESCAPED ASSESSMENT. THE AO DID NOT CONVINCE WITH THE EXPLANATION OF THE ASSESSEE AND CAME TO THE CONCLUSIO N THAT IT IS VERY CLEAR THAT M/ S. TELENT INFOWAY LTD. IS A BOGUS COMPANY, FLOATED TO CONDUCT BOGUS SHARE TRANSACTIONS, AND THE LTCG ARISING OUT OF TRANSACTIONS CARRIED OU T WITH THE SAID COMPANY CANNOT BE GENUINE. HE ALSO RELIED ON SHRI MUKESH CHOKSHI'S ANSWER TO QUESTION NO.4 AND 32, WHERE HE EXPLAINED IN DETAIL THE MODUS OPERANDI FOR ISSUE OF BILLS FOR BOGUS SECURITY TRANSACTIONS. THE AO, THEREFORE, CAME TO A FINDING THA T THE AFFIRMATION RELATING TO BUSINESS BY SHRI MUKESH CHOKSHI IS AN EVIDENCE THAT CANNOT BE IGNORED, AS THE SAME HAS BEEN RECORDED IS U/ S.131 OF THE ACT DURING THE COURSE OF SEARCH, WHICH CLEARLY SHOWS THAT ASSESSEE HAD RECEIVED CASH EQUIVALENT TO THE VALU E OF CAPITAL GAINS FROM THE ASSESSEE . THE AO , THUS, TREATED THE LTCG OF RS.5,20,215/ - RECEIVED FROM THE ASSESSEE AS PAYMENTS MADE OUT OF HER UNDISCLOSED INCOME AND BROUGHT THE SAID AMOUNT TO TAX UNDER THE HEAD 'INCOME FROM OTHER SOURCES. 3. IN APPEAL THE C IT(A) CONFIRMED THE ACTION OF THE AO. ITA NO. 69 /1 4 4 4. LD. AR BEFORE US CONTENDED THAT THE ASSESSEE HAS ALREADY SUBMITTED HER AFFIDAVIT - CUM - SUBMISSION BEFORE THE AO IN WHICH IT HAS BEEN STATED THAT ASSESSEE HAS NOT ENTERED INTO ANY TRANSACTION, NOR RECEIVED ANY AMOUNT O N CAPITAL GAINS FROM ANY PERSON OR DIRECTOR OF THE COMPANY, INCLUDING SHRI MAYUR M. CHOSKSI OR M/S. MAHASAGAR SECURITIES PVT. LTD. OR GOLD STAR FINVEST SECURITIES PVT. LTD.. 5. WE HAVE CONSIDERED RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF AUT HORITIES BELOW AND FOUND FROM THE RECORD THAT ASSESSEE HAS NEITHER RECEIVED ANY ACCOMMODATION ENTRY IN THE FORM OF LTCG NOR OFFERED ANY INCOME UNDER SUCH HEAD. EVEN IN THE BANK STATEMENT THE AO DID NOT FIND ANY CREDIT ENTRY OF RS. 5,20,215/ - TO SUPPORT THE CONTENTION THAT ASSESSEE WAS IN RECEIPT OF CHEQUE OF RS. 5,20,215/ - ON ACCOUNT OF BOGUS LTCG. EVEN BEFORE THE LOWER AUTHORITIES ASSESSEE HAS FILED AFFIDAVIT WHICH READS AS UNDER : - ' THAT THE ASSESSEE HAS FILED ALL THE DETAILS AND/ OR EXPLANATION CALLED FOR IN THE COURSE OF HEARING AND THAT WE HAVE TO STATE THAT AT NO POINT OF THE TIME THE ASSESSEE MISS SHEETAL PRITAM BATHIJA, HAS RECEIVED ANY INCOME BY WAY OF LONG TERM CAPITAL GAIN FROM MAHASAGAR SECURITIES PVT. LTD., OR ANY OF THE GROUP COMPANIES OF MR. MA YUR M. CHOKSI AMOUNTING TO RS.5,20,215/ - (RUPEES FIVE LACS TWENTY THOUSAND TWO HUNDRED AND FIFTEEN ONLY), WHICH IS ALSO EVIDENT FROM THE COPY OF THE ONLY SAVINGS BANK ACCOUNT HELD BY THE ASSESSEE IN SYNDICATE BANK BEING SB ACCOUNT NO.20575 AT THEIR KHAR ( W) BRANCH, MUMBAI AND THE SAID MAHASAGAR SECURITIES PVT. LTD. HAS FRAUDULENTLY SHOWN RS.5.20,215/ - HAS BEEN PAID TO THE ASSESSEE. SIR, ASSESSEE HAS ALSO EXECUTED THE AFFIDAVIT - CUM - DECLARATION ON THE ABOVE LINES AND IT IS FURTHER REQUESTED TO KINDLY GET THE ACCOUNT VERIFIED BY THE LEARNED 11'.0 AS TO THE CREDIT OF THE SUM OF RS.5,20,215/ - WHICH HAS BEEN CREDITED IN THE RELEVANT ACCOUNT AS THE SAID LEARNED ITO WITHOUT VERIFYING THE SAME HAS PROCEEDED TO ADD TO THE INCOME WITHOUT ANY FACT FINDING.' ITA NO. 69 /1 4 5 6. IT IS CLEAR FROM THE ABOVE, THAT ASSESSEE WAS NOT IN RECEIPT OF ANY ACCOMMODATION ENTRY EITHER FROM M/S MAHASAGAR SECURITIES PVT. LTD. OR FROM MR. MAYUR M. CHOKSI , NOR ANY CORROBORATIVE EVIDENCE WAS PLACED ON RECORD BY TH E AO TO SUBSTANTIATE ITS CONTENTION T HAT M/S MAHASAGAR SECURITIES PVT. LTD HAS GIVEN CHEQUE OF RS. 5,20,215/ - AS AN ACCOMMODATION ENTRY. WE HAD ALSO VERIFIED THE BALANCE SHEET OF THE ASSESSEE FILED BEFORE THE LOWER AUTHORITIES AS WELL AS BANK STATEMENT PLACED ON RECORD, WHEREIN THERE IS NO CRE DIT ENTRY OF RS. 5,20,215/ - . THE ASSESSEE HAS ALSO CONFIRMED THAT SHE HAS ONLY ONE BANK ACCOUNT. MERELY ON THE PLEA THAT COMPUTER OF M/S MAHASAGAR SECURITIES PVT. LTD. INDICATED ISSUE OF ACCOMMODATION ENTRY IN THE NAME OF ASSESSEE, THE AMOUNT CANNOT BE ADDE D IN THE HANDS OF THE ASSESSEE UNLESS AO BRINGS ON THE RECORD COGENT EVIDENCE TO SHOW THAT AMOUNT WAS ACTUALLY RECEIVED BY ASSESSEE OR CREDITED IN HER BANK ACCOUNT. IT IS ALSO NOT THE CASE OF AO THAT BANK ACCOUNT OF MAHASAGAR SECURITIES PVT. LTD. INDICATES ANY ISSUE OF CHEQUE IN THE NAME OF ASSESSEE. MERELY ENTRY IN COMPUTER FOUND AT THE PREMISES OF MAHASAGAR SECURITIES PVT. LTD. COULD NOT BE MADE THE BASIS OF ADDITION IN THE HANDS OF ASSESSEE UNLESS SOME CORROBORATIVE EVIDENCE IS BROUGHT ON RECORD BY AO T O SUBSTANTIATE THE STAND THAT ASSESSEE WAS IN RECEIPT OF SUCH BOGUS ENTRY . UNDER THESE CIRCUMSTANCES, IN THE ABSENCE OF ANY EVIDENCE ON RECORD, WE DO NOT FIND ANY MERIT IN THE ACTION OF THE AO FOR ADDING A SUM OF RS. 5,20,215/ - AS BOGUS LTCG IN THE HANDS OF THE ASSESSEE. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO. 69 /1 4 6 O RDER PRONOUNCED IN THE OPEN COURT ON THIS 22/07 / 201 5 . SD/ - SD/ - ( ) ( SUSHMA CHOWLA ) ( . . ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 22/07 /201 5 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RES PONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY/