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

Aforesaid appeal by Revenue for AY 2007-08 contest the order of Ld. Commissioner of Income Tax (Appeals)-26, Vashi, Navi Mumbai [CIT(A)] order dated 25/09/2019 on following 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 of Rs.11,15,541/- on account of undisclosed income being an accommodation entry in the form of bogus LTCG taken from Mahasagar Group, without appreciating the fact that parties Shraddha Doshi Assessment Year: 2007-08 from whom these bogus LTCG were taken were proven accommodation entry providers. (2) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is correct in stating the addition made by the AO was only based on statement of Mukesh Chokshi and that too for the A.Y. 2006-07 without appreciating the fact that the A.O. made independent enquiries and reached the conclusion that assessee had taken accommodation bills for LTCG and therefore treated the alleged LTCG of Rs.11,15,541/- 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 restored.

We have carefully heard the rival submissions and perused relevant material on record including documents placed in the paper-book. Our adjudication to the subject matter of appeal would be as given in succeeding paragraphs.

The material facts are that the assessee being resident individual was assessed u/s. 143(3) r.w.s. 147 on 30/01/2015.The original return filed by the assessee was processed u/s 143(1). However, pursuant to search action by the department on accommodation entry provider Shri Mukesh Chokshi Group, it transpired that assessee made certain investment in the shares of an entity namely M/s Pace Electronics. The investment was made during AY 2006-07 through stock broking firm M/s Alliance Intermediateries & Network Pvt. Ltd. In this year, the investments were sold and the Long-Term Capital gains arising there-from were claimed as exempt from tax. The case for AY 2006-07 was reopened and the investments made by the assessee was added as unexplained investments which was accepted by the assessee.

During appellate proceedings, the assessee drew attention to the fact that sale of shares has taken place on stock exchange through independent share broking firm namely M/s Sushil Finance Consultants Ltd. The shares were delivered through demat account and the proceeds were received through banking channels. Therefore, the presumptions of Ld. AO were without any basis. Reliance was placed on various favorable decision of Tribunal rendered on similar factual matrix.

The Ld. CIT(A) concurred with assessee’s submissions that the sale were duly supported by contract notes, bills, demat statements and bank passbook. The Ld. AO did not carry out any investigation to prove that the details in the contract notes / delivery bills were incorrect. The additions were made solely on the basis of statement of Shri Mukesh Chokshi. Therefore, the additions were not sustainable in law. Aggrieved, the revenue is in further appeal before us.

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 passbook. The shares have been delivered from demat account and the Shraddha Doshi Assessment Year: 2007-08 consideration have been received through banking channels. The sale has taken place on stock exchange through independent broking firm. All the evidences have not been controverted 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 basis of presumptions. It was incumbent on Ld. AO to dislodge assessee’s documentary evidences. The failure to do so would result 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.

Resultantly, the appeal stands dismissed. Order pronounced on 12th July, 2021 Sd/- Sd/- (Amarjit Singh) (Manoj Kumar Aggarwal) �ाियक सद� / Judicial Member लेखा सद� / Accountant Member मुंबई Mumbai; िदनांक Dated : 12/07/2021 Sr.PS, Jaisy Varghese आदेशकी�ितिलिपअ�ेिषत/Copy of the Order forwarded to : अपीलाथ�/ The Appellant 1. ��थ�/ The Respondent 2. आयकरआयु�(अपील) / The CIT(A) 3. आयकरआयु�/ CIT– concerned 4. िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण, मुंबई/ DR, ITAT, Mumbai 5. गाड�फाईल / Guard File 6.