LEELA JEEVAN DHOKA, MUMBAI V. I.T.O. WD. 23(2)(4), MUMBAI

ITA 8374/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1665 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-04-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 09-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C P PATNAIK
• Assessee Lawyers: M SUBRAMANIAM
• Keywords: Share purchase agreement
• Section: 143(3); 147; 148

Judgement Text

. , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI , BEFORE SHRI R. K. GUPTA , JM ITA NO. 8374 / MUM/ 20 1 1 ( ASSESSME NT YEAR : 200 2 - 20 0 3 ) LEELA JEEVAN DHOKA, 2 ND FLOOR, NEW MATAJI BLDG., N.S.ROAD, MULUND (W) VS. ITO WARD 23(2)(4) , MUMBAI PAN/GIR NO. : A ECPD 1871 N ( APPELLANT ) .. ( RESPONDENT ) /ASS ESSEE BY : MR. M. SUBRAMANIAM /REVENUE BY : MR. K.C.P.PATNAIK DATE OF HEARING : 2 ND JAN . , 201 3 DATE OF PRONOUNCEMENT : 4 TH JAN . , 201 3 O R D E R THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 12 - 10 - 2011 OF LEANED CIT(A) - 33 , MUMBAI RELA TING TO THE ASSESSMENT YEAR 200 2 - 0 3 . 2 . THE ASSESSEE IS OBJECTING THE CONFIRMATION OF ADDITION OF RS. 1,20,238/ - MADE BY THE AO IN ASSESSMENT ORDER COMPLETED UNDER SECTION 1 47 READ WITH SECTION 143(3) OF THE ACT. ITA NO. 8374 /20 1 1 2 3 . BRIEF FACTS OF THE CASE ARE THAT ON INFORMATION FROM INVESTIGATING WING, NOTICE UNDER SECTION 148 WAS ISSUED TO THE ASSESSEE TO FILE RETURN. THEREAFTER IN ASSESSMENT PROCEEDING, THE ASSESSEE WAS ASKED TO PROVE TH E GENUINENESS OF THE SALE OF SHARES OF RS. 1,20,250/ - . THE ASSESSEE FILED NECESSARY DETAILS TO VERIFY THE TRUTHNESS OF THE FACTS. THE AO CALLED MR. MUKESH CHOKSI, DIRECTOR OF GOLDSTAR FINVEST PVT. LTD., THROUGH WHOM THE SHARES WERE SOLD. IN THE STATEMENT OF SHRI CHOKSI, HE ADMITTED THAT IN FACT THERE WAS NO GENUINE AS HE HAD ISSUED ACCOMMODATION BILLS AFTER CHARGING % OF THE COMMISSION. ACCORDINGLY, THE AO MADE ADDITION OF RS. 1,20,782/ - 4 . BEFORE THE LEARNED CIT(A), IT WAS SUBMITTED THAT IF AN OPPORTUNITY FOR CROSS EXAMINATION WAS GIVEN BEFORE MAKING ITS ADDITION AND, HENCE, THE ORDER PASSED BY THE AO NULL AND VOID . FURTHER DETAIL WRITTEN SUBMISSIONS WERE FILED ALONG WITH COPY OF THE PURCHASE BILLS, SALE BILLS OF SHARES, SHARE TRANSFERRED CONFIRMATION LETTE R FROM COMPANY IN THE NAME OF ASSESSEES CLIENT AFTER PURCHASING THE SAID SHARES. RELIANCE WAS PLACED AT A DECISION IN THE CASE OF SH.BHERULAL P. DHOKA (HUF), PASSED IN ITA NOS.3220&3221/MUM/2008, VIDE ORDER DATED 19 - 5 - 2009 . LEARNED CIT(A) SENT THE DETAILE D SUBMISSION WITH ALL THE DETAILS TO THE AO FOR HIS REMAND REPORT AND FOR ALLOWING CROSS - EXAMINATION. THEREAFTER THE CROSS - EXAMINATION WAS ALLOWED AND A QUESTION WAS PUT AS TO WHETHER HE HAS ISSUED ACCOMMODATION BILLS OR HAS ISSUED GENUINE CHEQUE. IN REPLY , MR. CHOKSI, SUBMITTED THAT HE HAS ISSUED ITA NO. 8374 /20 1 1 3 GENUINE CHEQUES AGAINST SALE OF SHARES. HOWEVER, THE AO AGAINST WAS NOT SATISFIED AS HE SUBMITTED HIS REPORT THAT THOUGH AT THE TIME OF CROSS EXAMINATION MR. MUKESH CHOKSI RETRACTED FROM HIS EARLIER STAND, HOWEVER , THE SHARE CERTIFICATES WERE NOT ISSUED AS ONLY ON THE BASIS OF PURCHASE BILL, THE SALE WAS AFFECTED AND, THEREFORE, IT CANNOT BE TREATED AS GENUINE SHARES. DETAILED REPLY AGAIN WAS FILED ON BEHALF OF THE ASSESSEE STATING THAT THE ASSESSEE HAS PURCHASED T HE SHARES AND HAD SOLD SHARES THROUGH GOLDSTAR FINVEST PVT. LTD. AND THEREAFTER HAS RECEIVED ACCOUNT PAYEE CHEQUE FOR SALE CONSIDERATION AND THE SAME IS CONFIRMED AND ESTABLISHED BY MR. MUKESH CHOKSI DURING CROSSEXAMINATION. THEREFORE, THE ADDITION MADE BY THE AO IS LIABLE TO BE DELETED. AFTER CONSIDERING THE SUBMISSION AND REMAND REPORT, LEARNED CIT(A) FOUND THAT SINCE MR MUKESH CHOKSI HAS RETRACTED FROM HIS STAND, THEREFORE, THE STAND OF MR. CHOKSI WAS DISCARDED . HOWEVER, SINCE, THERE WAS NO DELIVERY OF S HARES AND THE ACCOUNT PAYEE CHEQUE WAS ISSUED BY M/S GOLDSTAR FINVEST PVT. LTD. AFTER ACCEPTING THE CASH FROM THE ASSESSEE, THEREFORE, HE WAS OF THE VIEW THAT ADDITION MADE BY THE AO WAS JUSTIFIED. ACCORDINGLY, HE CONFIRMED THE ADDITION MADE BY THE AO. NOW , THE ASSESSEE IS IN APPEAL HERE BEFORE THE TRIBUNAL. 5 . LEARNED AR REITERATED THE CONTENTION WHICH WERE RAISED BEFORE THE LEARNED CIT(A) . ON THE OTHER HAND, LEARNED DR STRONGLY PLACED RELIANCE ON THE ORDER OF LEARNED CIT(A) . ITA NO. 8374 /20 1 1 4 6 . AFTER CONSIDERING THE S UBMISSION AND PERUSING THE MATERIAL ON RECORD, I FOUND THAT THE ASSESSEE DESERVES TO SUCCEED IN THIS CASE. IN EARLIER STATEMENT OF MR. MUKESH CHOKSI, HE STATED THAT HE HAS ISSUED ACCOMMODATION BILLS. HOWEVER, DURING REMAND PROCEEDING, WHEN CROSS - EXAMINATIO N WAS ALLOWED, MR. CHOKSI HAS STATED THAT HE HAS ISSUED GENUINE CHEQUES AGAINST SALE OF SHARES. THEREFORE, LEARNED CIT(A) DISCARDED THE STATEMENT OF MR. MUKESH CHOKSI . IN MY CONSIDERED VIEW, LEARNED CIT(A) HAS RIGHTLY DISCARDED THE STATEMENT OF MR. CHOKSI. HOWEVER, LEARNED CIT(A) HAS CONFIRMED THE ADDITION FOR THE REASON THAT M/S GOLDSTAR FINVEST PVT. LTD. HAS ISSUED CHEQUES AFTER ACCEPTING CASH FROM THE ASSESSEE AS STATED BY THE AO IN HIS REMAND REPORT. THERE WAS NO MATERIAL BEFORE THE AO IN STATING SO THA T M/S GOLDSTAR FINVEST PVT. LTD. ISSUED CHEQUES AFTER ACCEPTING CASH FROM THE ASSESSEE . THE STATEMENT OF MR. CHOKSI HAS BEEN DISCARDED BY LEARNED CIT(A) AND, IN MY VIEW, IT WAS RIGHTLY DISCARDED. THEREFORE, NO WEIGHTAGE OF EARLIER STATEMENT OF MR. CHOKSI C AN BE GIVEN. THERE WAS NO OTHER MATERIAL EITHER BEFORE THE AO OR BEFORE THE LEARNED CIT(A) TO HOLD THAT CHEQUE ISSUED BY M/S GOLDSTAR FINVEST PVT. LTD. WAS ISSUED AFTER ACCEPTING CASH FROM THE ASSESSEE. THE ASSESSEE PRODUCED PURCHASE BILLS, SALE BILLS AN D SHARE TRANSPORT CERTIFICATE. FROM ALL THESE EVIDENCE, IT IS AMPLY PROVED THAT TRANSACTION ARE GENUINE AND ADDITION MADE ON PRESUMPTION BASIS IS NOT JUSTIFIED. ACCORDINGLY, I HOLD THAT ADDITION MADE AND CONFIRMED BY THE LEARNED CIT(A) WAS NOT JUSTIFIED. THEREFORE, THE SAME IS DELETED. ITA NO. 8374 /20 1 1 5 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF JAN . 201 3 . JAN. 201 3 SD/ - ( ) ( R.K.GUPTA ) / JUDICIAL MEMBER MUMBAI ; DATED : 04 / 01 / 201 3 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI