DEEPAK V, DOSHI, MUMBAI v. ITO WD 20(2)(1), MUMBAI

ITA 3553/MUM/2015 | 2006-2007
Pronouncement Date: 27-10-2016 | Result: Allowed

Appeal Details

RSA Number 355319914 RSA 2015
Assessee PAN AAEPD5070D
Bench Mumbai
Appeal Number ITA 3553/MUM/2015
Duration Of Justice 1 year(s) 4 month(s) 16 day(s)
Appellant DEEPAK V, DOSHI, MUMBAI
Respondent ITO WD 20(2)(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 27-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted Not Allotted
Tribunal Order Date 27-10-2016
Date Of Final Hearing 27-10-2015
Next Hearing Date 27-10-2015
Assessment Year 2006-2007
Appeal Filed On 10-06-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY JM AND SHRI RAJESH KUMAR AM ./ I.T.A. NO. 3553 /MUM/2 0 1 5 ( / ASSESSMENT YEAR S : 20 0 6 - 07 ) SHRI DEEPAK V DOSHI 602/603 AMARTARU APARTMENTS 5 NEW NAGARDAS CROSS ROAD ANDHERI (E) MUMBAI - 69 / VS. INCOME TAX OFFICER 2 0 ( 2)( 1) MUMBAI. ./ PAN : AAEPD5070D ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI ASHWIN S CHHAG / RESPONDENT BY : SHRI B S BIST / DATE OF HEARING : 2.5.2016 / DATE OF PRONOUNCEMENT : 27. 10.20 16 / O R D E R PER RAJESH KUMAR AM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 31.3.2015 PASSED BY THE LD.CIT(A) - 3 6 MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 20 06 - 07 . 2 . THE ASSESSEE HAS CHALLENGED IN THE GROUNDS OF APPEAL THAT THE REOPENING OF THE ASSESSMENT U/S 147 R.W.S 148 OF THE INCOME TAX ACT 1961 ( HEREINAFTER CALLED AS THE ACT) FOR THE ASSESSMENT YEAR 2006 - 07 IS ABINITIO NULL AND VOID AND ALSO CHALLENGED THE FINDING OF THE LOWER ITA NO. 3553/M/2015 2 AUTHORITIES ON MERITS FOR MAKING THE ADDITIO N BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT TREATING THEREBY THE SHORT TERM CAPITAL GAINS FROM AS UNDISCLOSED INCOME FROM OTHER SOURCES. 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS ORIGINAL RETURN OF INCOME ON 22.9.2006 DECLARING THE TOTAL INCOME OF RS.12 86 780/ - WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. THE CASE OF THE ASSESSEE WAS REOPENED UNDER SECTION 147 OF THE ACT AND THE NOTICE U/S 148 OF THE ACT DATED 13.1.2012 WAS ISSUED. ON RECEIPT OF INFORMATIO N FROM DDIT INVESTING WING 1(4) MUMBAI THE AO FOUND THAT THE ASSESSEE WAS ONE OF THE BENEFICIARIES WHO HAD AVAILED BOGUS BILLS/ACCOMMODATION ENTRIES THROUGH M/S ALLIANCE INTERMEDIATERIES AND NETWORK PVT LTD. WHICH WAS A GROUP CONCERN RUN BY SHRI MUK ESH CHOKSHI . THE AO ON THE BASIS OF SAID INFORMATION BY DDIT INT.U 1(4) MUMBAI REOPENED THE CASE OF THE ASSESSEE AFTER TAKING THE APPROVAL FROM THE ADDL.CIT. DURING THE YEAR THE ASSESSEE HAS SHOWN STCG ON SALE OF RS.10000 EQUITY SHARES OF M/S APTECH LTD WHICH WAS SOLD THROUGH R R NABAR AND CO. SHARES BROKERS PVT LTD ON 2.3.2006 FOR A TOTAL CONSIDERATION OF RS.11 97 600/ - . THE SAID SHARES WERE CLAIMED TO BE PURCHASED ON 19.5.2005 THROUGH M/S ALLIANCE INTERMEDIATERIES AND NETWORK PVT LTD FOR A CONSIDERATION OF RS.3 31 573/ - AND ACCORDINGLY THE ASSESSEE DISCLOSED STCG OF RS.8 66 100/ - . THE ASSESSEE WAS FOUND TO ITA NO. 3553/M/2015 3 BE BENEFICIARY OF THE SAID BOGUS TRANSACTIONS DURING THE COURSE OF SEARCH OPERATION ON MR.MUKESH CHOKSHI AND HIS GROUP COMPANIES WH EN THE SEARCH TEAM EXTRACTED THE LIST OF BENEFICIARIES FROM THE COMPUTER OF MR. MUKESH CHOKSHI AND THE ASSESSEE WAS ONE OF THE 3000 BENEFICIARIES. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS REQUIRED THE ASSESSEE TO FILE THE NECESSARY PROOF AND E VIDENCE AS REGARDS TO PURCHASE AND SALE OF SHARES. IT WAS SUBMITTED BEFORE THE AO THAT THE ASSESSEE HAS PURCHASED 10000 SHARES ON 19.5.2005 FOR A TOTAL CONSIDERATION OF RS.3 31 573/ - WHICH PAID BY ACCOUNT PAYEE CHEQUE BEARING NO.564901 DATED 20.2.2006 DRAWN ON BANK OF BARODA APPROXIMATELY 9 MONTHS AFTER THE DATE OF PURCHASE OF SHARES. THE AO RECORDED THE STATEMENT OF T HE AS S ES SEE UNDER SECTION 131 OF THE ACT ON 26.11.2012 IN WHICH THE ASSESSEE IN R EPLY TO QUESTION NO.5(A) SUBMITTED THAT YES I HAVE PURCHASED THE SHARES OF APTECH LTD THE DATE OF PURCHASE IS 19.5.2005. THE TOTAL NO. OF SHARES PURCHASED WERE 1 0 000 AND IN RESPONSE TO THE QUERY FROM THE AO REGARDING THE CREDIT OF SHARES IN TO DEMAT ACCOUNT THE ASSESSEE SUBMITTED THAT THESE WERE CREDITED IN HE MONTH OF FEBRUARY 2006 AND ACCORDINGLY PAYMENT WAS ALSO MADE TO BROKER M/S ALLIANCE INTERMEDIATERIES AND NETWORK PVT LTD . THE ASSESSEE ALSO SUBMITTED THE DETAILED DEMAT ACCOUNT THAT TRANSACTIONS ENTERED THROUGH THE ABOVE BROKER BESI DES THE SUBMITTED THE BANK STATEMENT CORROBORATING THE PAYMENT. THE DELAY FOR CREDITING THE SHARES IN THE DEMAT ACCOUNT BY 9 ITA NO. 3553/M/2015 4 MONTHS WAS EXPLAINED BY THE ASSESSEE BY SUBMITTING THAT INITIALLY 2000 SHARES WERE PURCHASES BUT BROKER HAS PURCHASED 10000 SH ARES IN HIS NAME WHICH COULD NOT BE PAID TO THE SHARE BROKER DUE TO NON AVAILABILITY OF FUNDS WITH THE PURCHASER AND AS A RESULT THE SHARE S PURCHASED BY THE BROKER ON BEHALF OF THE ASSESSEE WERE KEPT BY THE BROKER IN PULL ACCOUNT WITH THE ASSURANCE THA T MONEY WILL BE PAID AS AND WHEN THE ASSESSEE MAY ARRANGE THE FUNDS. THE PAYMENT WAS ULTIMATELY PAID MADE IN THE ENSUING MONTH OF FEB. 2006 AND THE BROKER ALLOW ED THE CREDIT FACILITY TO THE ASSESSEE. HOWEVER THE AO REJECTED THE CONTENTION OF THE LD.AR AND CAME TO THE CONCLUSION THAT TRANSACTIONS SHOWN BY THE ASSESSEE TH ROUGH M/S ALLIANCE INTERMEDIATERIES AND NETWORK PVT LTD. WERE COLOURABLE DEVICE FOR THE PURPOSE OF EVADING THE TA X BY SHOWING GAIN AS GAIN AS STCG AND PAYING TAX AT THE RATE OF 10%. THE AO FINALLY PASSED AN ORDER U/S 143(3) R.W.S.147 OF THE ACT VIDE ORDER DATED 31.12.2012 ASSESSING THE TOTAL INCOME AT RS.12 86 780 / - BY TREATING THE STCG AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. BEING AGGRIEVED BY THE ORDER OF AO TH E ASSESSEE PREFERRED AN APPEAL BE F OR E THE FIRST APPELLANT AUTHORITY WHO ALSO DISMISSED THE APPEAL OF THE ASSESSEE AND ENHANCED THE ADDITION FROM RS.8 66 100/ - TO RS.11 85 586/ - BY OBSERVING AND HOLDING AS UNDER : 5. I HAVE CAREFULLY CONSIDERED THE FACT S RELATING TO THE GROUNDS RAISED IN APPEAL AS THEY EMANATE FROM THE IMPUGNED ORDER AND THE SUBMISSIONS MADE DURING THESE PROCEEDINGS. ITA NO. 3553/M/2015 5 5.1 GROUND NO. 1 IS GENERAL IN NATURE AND REQUIRES NO SPECIFIC ADJUDICATION. ACCORDINGLY THE SAME IS TREATED AS DISMISS ED FOR STATISTICAL PURPOSES. 5.2 IN GROUNDS NO. 2 3 AND 4 THE APPELLANT HAS CHALLENGED THE ADDITION OF RS. 8 66 100/ - AS UNEXPLAINED CASH CREDIT U/S 68. DURING THE COURSE OF REASSESSMENT PROCEEDINGS THE AO NOTED THAT THE APPELLANT HAD SHOWN CAPITAL GAIN ON SALE OF 10 000 SHARES OF MLS APTECH LTD. ON 02/03/2006. THE AO FURTHER NOTED THAT THESE SHARES HAD BEEN SHOWN AS PURCHASED FROM M/S ALLIANCE INTERRNEDIAR IES AND NETWORK PRIVATE LTD. FOR AN AMOUNT OF RS.3 31 573/ - . THE AO OBSERVED THA T THOUGH THE SHARES WERE STATED TO HAVE BEEN PURCHASED ON 19/05/2005 THE PAYMENT FOR THESE SHARES WAS ONLY MADE ON 20/02/2006. THE AO ALSO RECORDED TH E STATEMENT OF THE APPELLANT U/S 131 AND NOTED THAT THE REGULAR BROKER OF THE APPELLANT M/S R.R.NABAR & CO. DID NOT EXTEND C REDIT WITH REGARD TO PAYMENT FO R PURCHASE OF SHARES AS WAS ALLEGED TO HAVE BEEN EXTENDED BY M/S ALLL IANCE INTERMEDIARIES AND NETWORK PRIVATE LTD. THE AO FURTHER NOTED THAT EVEN THOUGH THE AP PELLANT STATED THAT THE DELAYED PAYMENT WAS MADE ON ACCOUNT OF DIS PUT E BETWEEN THE APPELLANT AND M/S ALLIANCE INTERMEDIARIES AND NETWORK PRIVATE LTD THE APPELLANT FURNISHED ANY EVIDENCE TO SUPPORT THIS ARGUMENT. THE AO CONSIDERED THE FACTS OF THE CASE IN THE LIGHT OF THE EVIDENCE UNEARTHED BY THE SEARCH AND SEIZURE OPERATION IS CARRIED ON BY THE DEPARTMENT ON THE MUKESH CHOKSI HIS ASSOCIATE AND THE VARIOUS CONCERNS RUN BY HIM ALL OF WHICH HAD BEEN FOUND TO BE ENGAGED IN THE PROCESS OF PROVIDING ACCOMMODATION ENTRIES/BOGUS BILLS TO INTERESTED PARTIES AND HELD THE C APITAL GAIN OF RS. 8 66 100/ - AS INCOME FROM UNDISCLOSED SOURCES. 5.3 IN APPEAL IT HAS BEEN SUBMITTED THAT THE ORDER FOR THE SHARES OF APTECH LTD. WAS INITIALLY PLACED ON PHONE AND FOR 2000 SHARES BUT THAT THE BROKER M/S ALLIANCE INTERMEDIARIES AND NETWO RK PRIVATE LTD. ERRONEOUSLY BOUGHT 10 000 SHARES OF THE SAID COMPANY. IT WAS FURTHER SUBMITTED THAT DURING THAT PERIOD THE APPELLANT HAD NO MONEY TO PAY UP THE PURCHASE CONSIDERATION OF 10 000 SHARES AND ACCORDINGLY REQUESTED THE BROKER TO RETAIN THE SHARE S FOR PAYMENT AS AND WHEN POSSIBLE. IT WAS SUBMITTED THAT THE BROKER ACCEPTED THE REQUEST OF THE APPELLANT AND RETAINED THE SHARES IN THEIR PULL ACCOUNT TRANSFERRING IT TO THE DEMAT ACCOUNT OF THE APPELLANT WHEN FULL PAYMENT OF RS. 3 31 573/ - WAS MADE. TH E APPELLANT FURTHER SUBMITTED THAT HE COULD ONLY PAY THIS AMOUNT BY CHEQUE NO. 564901 DATED 20/02/2006 DRAWN ON THE BANK OF BARODA AND THAT THE SHARES ITA NO. 3553/M/2015 6 WERE SUBSEQUENTLY TRANSFERRED TO THE APPELLANT'S DEMAT ACCOUNT WITH M/S ACTION FINANCIAL SERVICES (INDIA) LTD. ON 28/02/2006. IT WAS FURTHER STATED THAT THESE SHARES WERE SOLD THROUGH M/S R.R.NABAR & CO. SHARE BROKERS ON 28/02/2006 AND THAT AFTER THIS INITIAL UNHAPPY EXPERIENCE WITH M/S ALLIANCE INTERMEDIARIES AND NETWORK PRIVATE LTD. THE APPELLANT HAD STOP PED DOING TRADE WITH THAT BROKER. 5.4 I HAVE CONSIDERED THE FACTS IN THE INSTANT CASE AND THE SUBMISSIONS OF THE APPELLANT. FROM THE SAME IT IS CLEAR THAT THE MAIN EVIDENCE RELIED BY THE APPELLANT IN SUPPORT OF THE CONTENTION THAT THE TRANSACTIONS IN QUE STION ARE GENUINE COMPRISES BROKERS NOTES/BILLS ISSUED BY M/S ALLIANCE INTERMEDIARIES & NETWORK PVT. LTD. (AKA MAHASAGAR SECURITIES LTD.) AND THE FACT THAT THE SALE PROCEEDS WERE RECEIVED THROUGH CHEQUES. IN THE FOLLOWING CASES OF SHRI MUKESH CHOKSI AND HIS ASSOCIATES THE ITAT HAS HELD THAT SHRI MUKESH CHOKSI AND ALL HIS ASSOCIATES ARE ENGAGED ONLY IN PROVIDING BOGUS ACCOMMODATION ENTRIES OF SHARES TRANSACTI ONS ETC . ( A ) ORDER DATED 28.03.2008 IN ITA NOS.4625/MUM/2005 AND 5000/MUM/2005 FOR AY 2002 - 03 IN CAS E OF M/S. GOLD STAR FINVEST P. LTD. ( B ) ORDER DATED 29.08.2008 IN THE CASES OF (I) RICHMOND SECURITIES P. LTD (SUBSEQUENTLY KNOWN AS MAHASAGAR SECURITIES P. LTD. AND NOW KNOWS AS ALAG SECURITIES) IN ITA NO.4624/MUM/2005 FOR THE A .Y.2002 - 03 AND M/S. ALPHA CHE MIE TRADE AGENCIES PVT. LTD. IN ITA N O . 4999/MUM/2005 FOR THE A.Y.2002 - 03. C) ORDER DATED 30.05.2008 IN ITA NO . 4912/MUM/2005 IN THE CASE OF M/S. MIHIR AGENCIES PVT. LTD. 5.5 I N LIGHT OF THE ABOVE FACTS THE A.R. OF THE APPELLANT VIDE ORDER SHEET NOTIN G DA T ED 19/03/2015 WAS ASKED WHY THE ENTIRE AMOUNT OF SALES PROCEEDS OF R S. 11 85 576/ - SHOULD NOT BE CONSIDERED AS INCOME FROM UNDISCLOSED SOURCES AND ASSESSED INCOME BE ENHANCED BY THE DIFFERENCE OF RS. 3 19 476/ - U/S 251(1). VI DE REPLY DATED 30/03/2015 THE APPELLANT SUBMITTED THAT HE HAD ENGAGED IN GENUINE PURCHASE OF THE SAID SHARES AND THAT HE WAS UNAWARE OF THE MALA - FIDE ACTIVITIES OF THE BROKER CONCERNED AS HE HAD NEVER COME ACROSS SUCH BEHAVIOUR BEFORE. IT W AS SUBMITTED THAT THE APPELLANT SHOULD NO T BE MADE TO SUFFER FOR THE ACTS OF THE UNSCRUPULOUS BROKER AND THEREFORE HE SHOULD NOT BE TAXED FURTHER. ITA NO. 3553/M/2015 7 5.6 IN THE PRESENT CASE IT IS SEEN THAT THE TRANSACTION FOR PURCHASE OF SHARES OF M/S APTECH L.TD. WAS STATED TO HAVE BEEN MADE BY THE APPELLANT T HROUGH M /S ALLIANCE INTERMEDIARIES AND NETWORK PRIVATE LTD. EVEN THOUGH THE APPELLANT WAS HAVING A REGULAR BROKER M/S R.R. NABAR & CO. THE APPELLANT HAS NOT BEEN ABLE TO CLARIFY WHY THE SAID TRANSACTION WAS DONE THROUGH M/S ALLIANCE INTERMEDIARIES AND NET WORK PRIVATE LTD. AND NOT THROUGH HIS REGULAR BROKER. OTHER THAN THE PURCHASE OF APTECH SHARES NO OTHER TRANSACTIONS WERE DONE BY THE APPELLANT WITH M/S ALLIANCE INTERMEDIARIES AND NETWORK PRIVATE LTD. THE APPELLANT HAS ALSO STATED THAT HE HAD A DISPUTE W ITH THE BROKER M/S ALIIANCE INTERMEDIARIES AND NETWORK PRIVATE LTD. WHO HAD ERRONEOUSLY PURCHASED 10 000 SHARES OF M/S APTECH LTD. AND THAT THE SAID BROKER HAD WILLINGLY KEPT THESE SHARES IN ITS PULL ACCOUNT IN THE NAME O F THE APPELLANT FOR A LONG PERIOD O F 9 MONTHS TILL THE APPELLANT WAS IN A POSITION TO MAKE THE PAYMENT OF RS. 3 31 573/ - . AS RIGHTLY OBSERVED BY THE AO THE SEQUENCE OF EVENTS DRAWN UP BY THE APPELLANT IS NOT BELIEVABLE AS THE APPELLANT DID NOT PRODUCE ANY EVIDENCE TO SHOW THAT THERE WAS A CTUALLY ANY DISPUTE BETWEEN HIM AND M /S ALLI ANCE INTERMEDIARIES AND NETWORK PRIVATE LTD. FURTHER THE APPELLANT WAS UNABLE TO EXPLAIN HOW HE MANAGED TO GET AN UNUSUALLY LONG CREDIT WINDOW OF 9 MONTHS WITHOUT ANY SECURITY FROM THE SAID BROKER IN THIS SOL E TRANSACTION WHEREAS HIS REGULAR BROKER ALSO DID NOT ALLOW HIM SUCH CREDIT FACILITY AS BROUGHT TO LIGHT BY THE STATEMENT OF THE APPELLANT RECORDED BY THE AO. THOUGH SUBSEQUENT SALE AND TRANSFER OF SHARES AFTER SALE FROM THE APPELLANT ARE SHOWN BUT THE P URCHASES ARE NOT SUBSTANTIATED . IN LIGHT OF THE FACTS UNEARTHED BY THE INVESTIGATIONS CARRIED OUT BY THE DEPARTMENT THE PAYMENT SHOWN TO OR FROM M / S ALLIANCE INTERMEDIARIES & N ETWORK PVT. LTD. CANNOT BE HELD TO BE GENUINE AS THESE ARE ONLY ACCOMMODATION ENTRIES. THEREFORE IT IS HELD ON THE BASIS OF VARIOUS DECISIONS OF ITAT MUMBAI IN THE CASE OF SHRI MUKESH CHOKSI GROUP COMPANIES THAT THE ASSESSEE HAS NOT MADE ANY GENUINE PURCHASES OF SHARES OF M/S APTECH LTD. SINCE SHRI MUKESH CHOKSI AND HIS COMPANIES HAVE INDULGED IN PROVIDING ONLY ACCOMMODATION ENTRIES I.E. M/S ALLIANCE INTERMEDIARIES AND NETWORK. PRIVATE LTD. HAS PROVIDED ONLY AN ACCOMMODATION ENTRY. IN ABSENCE OF A GENUINE PURCHASE DEDUCTION FOR COST OF PURCHASE CANNOT BE ALLOWED. HENCE THE ENTIR E SALE PROCEEDS OF SHARES OF M /S APTECH LTD. OF RS. 11 85 576/ - IS ASSESSABLE AS INCOME OF APPELLANT UNDER HEAD 'INCOME FROM OTHER SOURCES' AND THE INCOME OF THE APPELLANT IS ENHANCED BY AN AMOUNT OF RS. 3 19 476/ - . THE A.O IS THEREFORE DIRECTED TO ASSESS RS. 11 85 576/-AS INCOME FROM OTHER SOURCES FROM THE BOGUS SHARES TRANSACTION. IN VIEW OF THESE FACTS THE ITA NO. 3553/M/2015 8 ADDITION OF RS. 8 66 100/ - IS ENHANCED TO RS. 11 85 576/ - . ACCORDINGLY THE GROUNDS RAISED BY THE APPELLANT ARE DISMISSED 4 . THE LD. AR OF THE ASSESSEE VEHEMENTLY SUBMITTED BEFORE US THAT THE LD. CIT(A) HAS WRONGLY DISMISSED THE APPEAL OF THE ASSESSEE AND ENHANCED THE DISALLOWANCE AS MADE BY THE AO BY IGNORING ALL THE RELEVANT FACTS OF THE CASE. THE LD. AR ARGUED THAT THE ASSESSEE HAS PURCHASED 10000 SHARES ON 19.5.2005 OF M/S APTECH LTD THROUGH M/S ALLIANCE INTERMEDIARIES P LTD FOR A TOTAL CONSIDERATION OF RS.3 31 573/ - . THESE SHARES WERE TRANSFERRED TO AND CREDITED IN D EMAT ACCOUNT OF THE APPELLANT ON 28.2.2006 OPENED WITH M/S ACTION FINANCIAL SERVICES (INDIA) LTD. THEREAFTER THE LD.AR SUBMITTED THAT THESE SHARES WERE SOLD ON BOMBAY STOCK EXCHANGE THROUGH M/S R.R NABBAR AND CO. ON 28.2.2006 FOR A TOTAL CONSIDERATION OF RS.11 85 576/ - AND THESE WERE TRANSFERRED AND DELETED FROM THE DEMAT ACCOU NT OF THE ASSESSEE. THE LD. COUNSEL ALSO SUBMITTED THAT PAYMENT FOR THESE SHARES WAS MADE BY THE ACCOUNT PAYEE CHEQUE DRAWN ON BANK OF BARODA ON 28.2.2006. THEREFORE THE ASSESSEE HAS PROVE D ALL THE INGREDIENTS PROVING THE GENUINENESS I.E. IDENTITY OF T HE CREDITOR CREDITWORTHINESS OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTION AND THEREFORE NO ADDITION COULD BE MADE U/S 68 OF THE ACT BY THE AO . MERE FINDING THE NAME OF THE ASSESSEE IN THE LIST OF BENEFICIARY DURING SEARCH OPERATION ON SHRI M UKESH CHOKSHI AND HIS GROUP COMPAN IES COULD NOT BE THE BASIS FOR MAKING GENUINE PURCHASES AS NON - ITA NO. 3553/M/2015 9 GENUINE AND MAKING IT AS ADDITION/S 68 OF THE ACT . WHEN THE PAYMENTS WERE DULY RECORDED IN THE BOOKS OF ACCOUNT AND MADE THROUGH BANKING CHANNEL. THE DELAY I N MAKING PAYMENT AND TRANSFERRING THE SHARE INTO DEMAT ACCOUNT WAS ALSO DULY EXPLAINED BEFORE THE AO AND ALSO AT THE TIME R ECORDING THE STATEMENT OF THE ASSESSEE UNDER SECTION 131 OF THE ACT ON 26.11.2012. THE LD. AR ALSO SUBMITTED THAT NO CROSS - EXAMINAT ION OF SHRI MUKESH CHOKSHI WAS ALLOWED TO THE ASSESSEE AS THE AO FRAMED THE ASSESSMENT ON THE STRENGTH OF INFORMATION FOUND FROM THE SEARCH ON SHRI MUKESH CHOKSHI AND HIS GROUP COMPANIES THA T THE ASSESSEE W A S ONE OF THE BENEFICIARY OF 3000 BENEFICIARIE S. ACCORDINGLY THE LD. AR SUBMITTED THAT THE AO HAS VIOLATED PRINCIPLE OF NATURAL JUSTICE. 5 . THE LD.DR ON THE OTHER HAND SUPPORTED THE ORDERS OF AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE HAD TAKEN BOGUS AND FRAUDULENT ENTRIES FROM M/S ALLI ANCE INTERMEDIARIES AND NETWORK P LTD WHICH WAS A GROUP COMPANY OF MR.MUKESH CHOKSHI WHO WAS ENGAGED IN THE BUSINESS OF PROVIDING BOGUS AND FRAUDULENT ENTRIES IN THE MARKED AND IT IS PROVED DURING THE COURSE OF SEARCH PROCEEDINGS. THE LD. DR PRAYED FOR THAT THE ORDER OF THE LD.CIT(A) BE UPHELD. 6 . WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED BEFORE US INCLUDING THE ORDERS OF AUTHORITIES BELOW. WE FIND THAT THE ASSESSEE HAS PURCHASED 10000 SHARES OF M/S APTECH LTD THROUGH M/S ALLIANCE INTERMEDIARIES AND NETWORK P LTD WHICH WAS A ITA NO. 3553/M/2015 10 GROUP COMPANY OF MR. MUKESH CHOKSHI. WE ALSO FIND THAT THE SAID SHARES WERE PURCHASED AND PAID THROUGH BANKING CHANNEL BY CHEQUE BEARING NO.564901 DATED 20.2.2006 DRAWN ON BANK OF BARODA . THE SAID STATEMENT WAS CORROBORATED BY A DOCUMENTARY EVIDENCE S AND WERE PLACED BEFORE THE AO. THE SAID SHARES WERE ALSO DEMATED THEREAFTER ULTIMATE LY SOLD ON 2.3.2006 . THUS THE ASSESSEE HAS PROV ED THE SHARE TRANSACTIONS BY FILING A COPY OF ACCOUNT WITH BROKER COPY OF BANK STATEMENT AND D E MAT ACCOUNT. WE FIND THAT THE THIRD PARTY EVIDENCE HAS BEEN USED AGAINST THE ASSESSEE WITHOUT ALLOWING THE ASSESSEE TO CROSS - EXAMINE MR.MUKESH CHOKSHI ON THE BASIS OF WHICH THE ADDITION WAS MADE. WHEREAS THE ASSESSEE HAS FURNISHED ALL THE NECESSARY EVIDENCES TO PROVE THAT SHARE TRANSACTIONS WERE NOT BOGUS AND THE TRANSACTIONS WERE RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. AN IDENTICAL ISSUE HAS BEEN DECIDED BY THE CO - ORDINATE BENCHES OF THE TRIBUNAL IN NUMBER OF CASES TAKING THE VIEW I N FAVOUR OF THE ASSESSEE. FOR THE SAKE OF BREVITY WE ENLIST THE FOLLOWING CASE LAW S : A) BIMAL V VORA V/S ITO IN I.T.A. NO.3189/MUM/2015 ( AY :2008 - 09) ORDER DATED 4.7.2016 B) SHRI VASANTRAJ BIRAWAT V/S ACIT IN I .T.A. NO. 989/MUM/2010 (AY : 2004 - 05) ORDER DATED 20.2.2015 7 . IN VIEW OF THE ABOVE DISCUSSIONS AND THE RATIO LAID DOWN IN THE ABOVE DECISIONS OF THE CO - ORDINATE BENCHES OF THE TRIBUNAL WE ARE INCLINED TO SET ASIDE THE ORDER OF LD. CIT(A) AND WE ACCORDINGLY DIRECT THE ITA NO. 3553/M/2015 11 AO TO DELET E THE ADDITION MADE UN D ER SECTION 68 OF THE ACT AND ALLOW STCG AS RETURNED BY THE ASSESSEE. 8 . SINCE WE HAVE DECIDED THE APPEAL OF THE ASSESSEE ON MERITS THEREFORE THE ISSUE OF REOPENING AND JURISDICTIONAL ISSUE IS RENDERED ACADEMIC IN NATURE AND THEREFORE DISMISSED. 9 . ISSUES RAISED IN GROUNDS OF APPEAL IN B C D AND E ARE GENERAL IN NATURE AND THEREFORE DISMISSED. 10 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27TH OCTOBER 2016. 27TH OCTOBER 2016 SD SD ( SAKTIJIT DEY ) ( RAJESH KUMAR ) JUDICIAL MEMBE R ACCOUNTANT MEMBER MUMBAI ; DATED 27. 10 . 2016 . . ./ SRL SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. / DR ITAT MUMBAI 6. / GUARD FILE . / BY ORDER TRUE COPY / (DY./ASSTT. REGISTRAR) / ITAT MUMBAI