ITO 28(3)(2), MUMBAI V. SHRADDHA DOSHI, MUMBAI

ITA 7155/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1053 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 20-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI LD
• Assessee Lawyers: DR P DANIEL LD
• Keywords: Unexplained investment; Income from undisclosed sources; Tax effect; Capital Gains
• Section: 143(3)

Judgement Text

ITA NO.7155/MUM/2019 SHRADDHA DOSHI ASSESSMENT YEAR: 2007-08 1 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , , BEFORE HONBLE SHRI AMARJIT SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.7155/MUM/2019 ( / ASSESSMENT YEAR: 2007-08) INCOME T AX OFFICER - 28(3)(2) ROOM NO.318, 3 RD FLOOR 6 TH TOWER VASHI RAILWAY STATION COMPLEX VASHI-400 703 / VS. SHRADDHA DOSHI 3/11, DHAVALGIRI HOUSING SOCIETY SECTOR-2, OPP. HOTEL ABBOT VASHI, NAVI MUMBAI-400703 '# ./ ./PAN/GIR NO. AHVPD-1376-Q ( !#% /APPELLANT ) : ( &'#% / RESPONDENT ) ASSESSEE BY : DR. P. DANIEL-LD. AR REVENUE BY : SHRI SANJAY J. SETHI-LD. DR / DATE OF HEARING : 07/07/2021 / DATE OF PRONOUNCEMENT : 12/07/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR AY 2007-08 CONTE ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-2 6, VASHI, NAVI MUMBAI [CIT(A)] ORDER DATED 25/09/2019 ON FOLL OWING GROUNDS OF APPEAL. (1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.11,15,541/- ON ACCOUNT OF UNDISCLOSED INCOME BEING AN ACCOMMODATION ENTRY IN THE FORM OF BOGUS LTCG TAKEN FROM MAHASAGAR GROUP, WITHOUT APPRECIATI NG THE FACT THAT PARTIES ITA NO.7155/MUM/2019 SHRADDHA DOSHI ASSESSMENT YEAR: 2007-08 2 FROM WHOM THESE BOGUS LTCG WERE TAKEN WERE PROVEN A CCOMMODATION ENTRY PROVIDERS. (2) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT(A) IS CORRECT IN STATING THE ADDITION M ADE BY THE AO WAS ONLY BASED ON STATEMENT OF MUKESH CHOKSHI AND THAT TOO F OR THE A.Y. 2006-07 WITHOUT APPRECIATING THE FACT THAT THE A.O. MADE IN DEPENDENT ENQUIRIES AND REACHED THE CONCLUSION THAT ASSESSEE HAD TAKEN ACCO MMODATION BILLS FOR LTCG AND THEREFORE TREATED THE ALLEGED LTCG OF RS.1 1,15,541/- AS UNDISCLOSED INCOME FROM UNDISCLOSED SOURCES. (3) THE APPELLANT PRAYS THAT THE ORDER OF LD.CIT(A) ON THE ABOVE GROUNDS BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTO RED. AS EVIDENT, THE REVENUE IS AGGRIEVED BY DELETION OF ADDITION OF RS.11.15 LACS AS MADE BY LD. ASSESSING OFFICER (AO) WHILE FRAMING THE ASSESSMENT. 2. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD INCLUDING DOCUMENTS PLA CED IN THE PAPER-BOOK. OUR ADJUDICATION TO THE SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 3. THE MATERIAL FACTS ARE THAT THE ASSESSEE BEING R ESIDENT INDIVIDUAL WAS ASSESSED U/S. 143(3) R.W.S. 147 ON 3 0/01/2015.THE ORIGINAL RETURN FILED BY THE ASSESSEE WAS PROCESSED U/S 143(1). HOWEVER, PURSUANT TO SEARCH ACTION BY THE DEPARTMEN T ON ACCOMMODATION ENTRY PROVIDER SHRI MUKESH CHOKSHI GR OUP, IT TRANSPIRED THAT ASSESSEE MADE CERTAIN INVESTMENT IN THE SHARES OF AN ENTITY NAMELY M/S PACE ELECTRONICS. THE INVESTME NT WAS MADE DURING AY 2006-07 THROUGH STOCK BROKING FIRM M/S AL LIANCE INTERMEDIATERIES & NETWORK PVT. LTD. IN THIS YEAR, THE INVESTMENTS WERE SOLD AND THE LONG-TERM CAPITAL GAINS ARISING T HERE-FROM WERE CLAIMED AS EXEMPT FROM TAX. THE CASE FOR AY 2006-07 WAS REOPENED AND THE INVESTMENTS MADE BY THE ASSESSEE W AS ADDED AS UNEXPLAINED INVESTMENTS WHICH WAS ACCEPTED BY TH E ASSESSEE. ITA NO.7155/MUM/2019 SHRADDHA DOSHI ASSESSMENT YEAR: 2007-08 3 ACCORDINGLY, THE CASE WAS REOPENED FOR THIS YEAR AL SO AS PER DUE PROCESS OF LAW AND THE ASSESSEE WAS DIRECTED TO SUB STANTIATE THE SALE TRANSACTIONS. THE ASSESSEE SUBMITTED THAT ADDI TIONS WERE ACCEPTED IN AY 2006-07 SINCE THE TAX EFFECT WAS SMA LL. HOWEVER, GOING BY THE STATEMENT OF SHRI MUKESH CHOKSHI AS MA DE DURING SEARCH PROCEEDINGS, THE GAINS SO EARNED WERE ADDED TO THE INCOME OF THE ASSESSEE AS INCOME FROM UNDISCLOSED SOURCES. 4. DURING APPELLATE PROCEEDINGS, THE ASSESSEE DREW ATTENTION TO THE FACT THAT SALE OF SHARES HAS TAKEN PLACE ON STO CK EXCHANGE THROUGH INDEPENDENT SHARE BROKING FIRM NAMELY M/S S USHIL FINANCE CONSULTANTS LTD. THE SHARES WERE DELIVERED THROUGH DEMAT ACCOUNT AND THE PROCEEDS WERE RECEIVED THROUGH BANKING CHAN NELS. THEREFORE, THE PRESUMPTIONS OF LD. AO WERE WITHOUT ANY BASIS. RELIANCE WAS PLACED ON VARIOUS FAVORABLE DECISION O F TRIBUNAL RENDERED ON SIMILAR FACTUAL MATRIX. 5. THE LD. CIT(A) CONCURRED WITH ASSESSEES SUBMISS IONS THAT THE SALE WERE DULY SUPPORTED BY CONTRACT NOTES, BIL LS, DEMAT STATEMENTS AND BANK PASSBOOK. THE LD. AO DID NOT CA RRY OUT ANY INVESTIGATION TO PROVE THAT THE DETAILS IN THE CONT RACT NOTES / DELIVERY BILLS WERE INCORRECT. THE ADDITIONS WERE MADE SOLEL Y ON THE BASIS OF STATEMENT OF SHRI MUKESH CHOKSHI. THEREFORE, THE AD DITIONS WERE NOT SUSTAINABLE IN LAW. AGGRIEVED, THE REVENUE IS I N FURTHER APPEAL BEFORE US. 6. AFTER GOING THROUGH ASSESSMENT ORDER AS WELL AS APPELLATE ORDER, WE FIND THAT THE SALE TRANSACTIONS ARE DULY SUPPORTED BY CONTRACT NOTES, BILLS, DEMAT STATEMENTS AND BANK PA SSBOOK. THE SHARES HAVE BEEN DELIVERED FROM DEMAT ACCOUNT AND T HE ITA NO.7155/MUM/2019 SHRADDHA DOSHI ASSESSMENT YEAR: 2007-08 4 CONSIDERATION HAVE BEEN RECEIVED THROUGH BANKING CH ANNELS. THE SALE HAS TAKEN PLACE ON STOCK EXCHANGE THROUGH INDE PENDENT BROKING FIRM. ALL THE EVIDENCES HAVE NOT BEEN CONTR OVERTED BY LD. AO. THE WHOLE BASIS OF ADDITION IS THE STATEMENT OF SHRI MUKESH CHOKSHI COUPLED WITH THE FACT THAT INVESTMENT MADE BY THE ASSESSEE WAS ACCEPTED AS UNEXPLAINED INVESTMENT IN EARLIER YEARS. HOWEVER, NO ADDITION IS SUSTAINABLE MERELY ON THE B ASIS OF PRESUMPTIONS. IT WAS INCUMBENT ON LD. AO TO DISLODG E ASSESSEES DOCUMENTARY EVIDENCES. THE FAILURE TO DO SO WOULD R ESULT INTO THE DELETION OF ADDITION WHICH HAS RIGHTLY BEEN DONE BY LD. CIT(A) IN THE IMPUGNED ORDER. CONCURRING WITH THE FINDINGS OF LD. CIT(A), WE DISMISS THE APPEAL. 7. RESULTANTLY, THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED ON 12 TH JULY, 2021 SD/- SD/- (AMARJIT SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 12/07/2021 SR.PS, JAISY VARGHESE !'#' / COPY OF THE ORDER FORWARDED TO : 1. !#% / THE APPELLANT 2. &'#% / THE RESPONDENT 3. - ( ! ) / THE CIT(A) 4. - / CIT CONCERNED 5. ./&0 , !0 , / DR, ITAT, MUMBAI 6. /123 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.