MAYUR M SHAH (HUF), MUMBAI v. ITO 25(3)(1), MUMBAI

ITA 2390/MUM/2013 | 2003-2004
Pronouncement Date: 10-07-2013 | Result: Partly Allowed

Appeal Details

RSA Number 239019914 RSA 2013
Assessee PAN AADHM7852B
Bench Mumbai
Appeal Number ITA 2390/MUM/2013
Duration Of Justice 3 month(s) 15 day(s)
Appellant MAYUR M SHAH (HUF), MUMBAI
Respondent ITO 25(3)(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 10-07-2013
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 10-07-2013
Assessment Year 2003-2004
Appeal Filed On 26-03-2013
Judgment Text
. IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH MUMBAI BEFORE SHRI R. K. GUPTA JM ITA NO. 2 390 / MUM/ 20 1 3 ( ASSESSMENT Y EAR : 200 3 - 20 0 4 ) MAYUR M. SHAH (HUF) 35/36 MANGALAM MATHURADAS ROAD KANDIVALI (W) MUMBAI - 400 067 VS. ITO 2 5 ( 3 )( 1 ) MUMBAI - 51 PAN/GIR NO. : A ADH M 7852 B ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : SHRI AJAY SINGH & SHRI R.V.SHAH /REVENUE BY : SHRI O.P.SINGH DATE OF HEARING : 1 ST JULY 201 3 DATE OF PRONOUNCEMENT : 10 TH JULY 2013 O R D E R T H IS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 15 - 1 - 2013 OF CIT(A) - 1 1 MUMBAI RELA TING TO THE ASSESSMENT YEAR 200 3 - 0 4 . 2 . GROUNDS NO. 1 & 2 ARE NOT PRESSED THEREFORE THEY ARE DISMISSED AS NOT PRESSED. 3. GROUNDS NO. 3 TO 5 RELATE T O UPHOLDING THE ORDER OF THE AO TREATING THE LONG TERM CAPITAL GAIN DISCLOSED ON THE SALE OF SHARES OF BUNIYAD CHEMICALS LTD. AS UNEXPLAINED INCOME AND SUSTAINING THE ADDITION OF RS. 3 09 310/ - AND CONFIRMING THE ADDITION OF RS. 15 466/ - BEING ALLEGED COMMIS SION PAID TO SHRI MUKESH CHOKSI FOR PROVIDING LONG TERM CAPITAL GAIN. ITA NO. 2390 /20 1 3 2 4 . DURING THE ASSESSMENT PROCEEDING THE AO NOTICED THAT THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAINS ON SALE OF SHARES OF M/S BUNIYAD CHEMICALS LTD.. THE SHARES WERE SAID TO BE PURC HASED ON 19 - 4 - 2001 FOR RS. 3 600/ - AND ALLEGEDLY SOLD ON 17 - 7 - 2002 FOR RS. 3 09 310/ - . BOTH PURCHASE AND SALE TRANSACTIONS WERE SAID TO BE CARRIED OUT THROUGH M/S GO L D STAR FINVEST. THE AO NOTED THAT M/S GOLD FINVEST PVT. LTD. IS A COMPANY BELONGING TO SHRI MUKESH CHOKSHI & HIS ASSOCIATES INCLUDING M/S GOLD STAR FINVEST PVT. LTD. WHICH WERE FOUND TO BE ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES IN SHARE TRANSACTIONS. ENTRIES SO PROVIDED INCLUDED SPECULATION PROFIT OR LOSS SHOT TERM CAPITAL GAIN OR LOSS LONG TERM CAPITAL GAIN OR LOSS ETC. SHRI MUKESH CHOKSHI HAS PROVIDED ACCOMMODATION IN ISSUING BOGUS BILLS IN THE NAME OF VARIOUS ENTITIES INCLUDING M/S GOLD STAR FINVEST PVT. LTD. FOR COMMISSION. THE MODUS OPERANDI ADOPTED BY SHRI MUKESH CHOKSHI IS ALSO EXPLAINED IN THE ORDER OF THE AO. AFTER CONSIDERING THE MODUS OPERANDI AND VARIOUS OTHER DETAILS AND INFORMATION THE AO TREATED THE LONG TERM CAPITAL GAIN AS BOGUS AND TREATING THE PROFIT OF RS. 3 09 310/ - AS UNEXPLAINED INCOME AND WAS ADDED TO THE IN COME OF THE ASSESSEE. A FURTHER ADDITION OF RS. 15 466/ - WAS ALSO MADE ON ACCOUNT OF COMMISSION PAID TO MR. CHOKSHI. 5 . IN APPEAL CIT(A) HAS CONFIRMED THE ACTION OF THE AO BY PASSING A VERY DETAILED ORDER COMPRISING OF 41 PAGES. NOW THE ASSESSEE IS IN AP PEAL HERE BEFORE THE TRIBUNAL. 6 . LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY VARIOUS DECISION OF THE TRIBUNAL I.E. IN THE CASE OF ITA NO. 2390 /20 1 3 3 CHANDRAKANT BABULAL SHAH DECIDED IN ITA NO. 6108/M/2009 VIDE ORDER DATED 15 - 12 - 2010 AND IN THE CASE OF SHRI RAVINDRAKUMAR TOSHWNIWAL DECIDED IN ITA NO.5302/M/2008 VIDE ORDER DATED 24 - 2 - 2010 . IT WAS FURTHER STATED THAT THE DECISION OF THE TRIBUNAL HAS ALSO BEEN CONFIRMED BY THE HONBLE HIGH COURT. COPY OF THE ORDER HAS ALSO BEEN PLACED IN TH E COMPILATION ALSO. IT WAS FURTHER EXPLAINED THAT IN THIS CASE ALSO THE SHARES WERE PURCHASED OF M/S BUNIYAD CHEMICALS LTD. THROUGH MR. MUKESH CHOKSH I . AFTER ANALYZING THE CASES IN DETAIL THE TRIBUNAL HAS HELD THAT THE TRANSACTIONS WERE GENUINE. AS STAGE D ABOVE THE DECISION OF THE TRIBUNAL HAS BEEN CONFIRMED BY THE HON BLE HIGH COURT. COPIES OF THESE DECISION ARE PLACED ON RECORD. 7 . ON THE OTHER HAND LEARNED DR STRONGLY PLACED RELIANCE ON THE ORDER OF LEARNED CIT(A) . ATTENTION OF THE BENCH WAS ALSO D RAWN ON THE ORDER OF CIT(A) AT PAGES 7 & 8 WHERE INFORMATION RECEIVED FROM MR. MUKESH CHOKSHI AND FROM OTHER SOURCES ARE DISCUSSED BY THE LEARNED CIT(A). 8 . IN REPLY LEARNED COUNSEL FOR THE ASSESSEE STATED THAT THE STATEMENT OF MR. MUKESH CHOKSIH WAS REC ORDED SOMETIME IN THE YEAR OF 2009 - 2010 AND THIS CASE RELATES TO THE ASSESSMENT YEAR 2003 - 04 THEREFORE THE STATEMENT OF MR. CHOKSHI CAN NOT BE USED AGAINST THE ASSESSEE . 9 . I HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED THEM CAREFULLY. AF TER CONSID ERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD I FOUND THAT IN CASE OF SHRI RAVINDRAKUMAR TOSHWNIWAL (SUPRA) AND IN CASE OF MUKESH R. MAROLIA DECIDED IN ITA NO. 456/2007 VIDE ORDER DATED 7 - 9 - 2011 THE SHARES FOR MAROLIA WERE PURCHASED THROUGH M /S GOLD STAR ITA NO. 2390 /20 1 3 4 FINVEST LTD. AND AFTER CONSIDERING THE STATEMENT OF MR. CHOKSHI THE BENCHES HELD THAT THE TRANSACTIONS DONE BY THE ASSESSEE WERE GENUINE AND NOTHING WAS FOUND AGAINST THESE ASSESSEES. THE DECISIONS OF THE TRIBUNAL HAVE BEEN CONFIRMED BY THE HON BLE JURISDICTIONAL HIGH COURT IN BOTH OF THESE CASES. COPIES OF THESE ORDERS ARE PLACED ON RECORD AT PAGES 18 & 41 RESPECTIVELY. IN THE CASE OF ASSESSEE FACTS ARE SIMILAR AND NOTHING WAS FOUND AGAINST THE ASSESSEE. THE STATEMENT OF MR.MUKESH CHOKSHI WAS RECORDED SOMETIME IN THE YEAR OF 2009 WHEREAS TRANSACTION OF PURCHASE AND SALES WERE HELD IN ASSESSMENT YEAR 2002 - 03 & 2003 - 04. TAKING INTO CONSIDERATION ALL THESE ASPECTS AND TAKING INTO CONSIDERATION THE VARIOUS DECISION OF THE TRIBUNAL WHICH HAVE BEEN CONFIRMED BY THE HON BLE JURISDICTIONAL HIGH COURT I HOLD THAT THE TRANSACTION FOR PURCHASE AND SALE OF SHARES IN THE PRESENT CASE ALSO CANNOT BE HELD AS BOGUS AS NO MATERIAL WAS FOUND AGAINST THE ASSESSEE DIRECTLY. 10 . IN VIEW OF THE ABOVE FACTS AN D CIRCUMSTANCES OF THE CASE I DELETE BOTH THESE ADDITIONS I.E. RS. 3 09 310/ - AND RS. 15 466/ - RESPECTIVELY. 11 . IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED IN PART . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF JU LY .2013 SD/ - ( ) ( R.K.GUPTA ) / JUDICIAL MEMBER MUMBAI; DATED : 10/07 / 2013 /PKM PS ITA NO. 2390 /20 1 3 5 COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / TH E RESPONDENT. 3. / THE CIT(A) MUMBAI. 4. / CIT 5. / DR ITAT MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER ( ASSTT. REGISTRAR) / ITAT MUMBAI