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Income Tax Appellate Tribunal, “SMC-B” BENCH : BANGALORE
Before: SHRI ARUN KUMAR GARODIA
O R D E R
Per Shri A.K. Garodia, Accountant Member
This appeal is filed by the assessee which is directed against the order of ld. CIT(A) – 4, Bangalore dated 27.07.2017 for Assessment Year 2009-10.
The grounds raised
by the assessee are as under. “1. The order of the Learned CIT (Appeal) – 4, Bengaluru in the present case is opposed to law.
2. The Learned CIT (Appeal) erred both in law as well as in fact in denying to accept the submission made during appeal proceedings
3. In any case and without prejudice the order having been passed by Learned CIT (Appeals) in total disregard of and in violation of principles of natural justice makes the order bad in law and liable to be quashed.
4. In any case and without prejudice the Learned CIT (Appeals) has erred in: a. Taxing the entire sale proceeds of Rs.24,33,986/- as income of the appellant. b. The LTCG claimed was Rs. 20,10,195/- which is very less than the total sale proceeds treated as income. [Wherein cost of shares purchased is not considered] c. Has not considered the fact that the appellant has earned LTCG on sale of shares. d. Without any basis, held the transaction in shares as fraudulent. e. Holding that the provisions of section 68 of the Act applicable to this case.
The CIT (Appeals) has erred in making various observations and coming to various conclusions, without any proof or evidence and such observations and conclusions need to be ignored.
6. The appellant denies the liability to pay interest. The interest having been levied erroneously is to be deleted.
In view of above and other grounds to be adduced at the time of hearing, it is requested that the impugned order be quashed and the returned exempted income from LTCG be accepted. The assessment of income u/s 68 be deleted and the interest also to be deleted.”
The appeal was first fixed for hearing on 28.02.2018. On this date, none appeared on behalf of the assessee and hence, hearing was adjourned to 20.03.2018 and the notice of hearing was sent to assessee by RPAD at the address provided by the assessee in Form No. 36. On this date also, none appeared on behalf of the assessee. Hence the appeal of the assessee was heard ex-parte qua the assessee. The ld. DR of revenue supported the order of CIT(A).
I have considered the submissions of ld. DR of revenue and gone through the orders of authorities below. I find that issue in dispute was decided by CIT(A) as per para no. 9.4 of his order which is reproduced hereinbelow for the sake of ready reference. “9.4. Shri MukeshChoksi, being the key person of the group of MahasagarSecurities had admitted in his sworn statement thathe and his group companies M/s. Mahasagar securities, M/s. Alliance Intermediaries and M/s. Network Pvt. Ltd, were engaged in fraudulent billing activities and in giving accommodation entries in order to enable the clients to declare speculation profit/loss, short term capital gain, long term capital gain, profits/ loss on account of commodity trading, introduce share application money or introduce money in theformof gift. The investigation wing has identified those beneficiaries who have made investments in those specified shares who got benefited out of such accommodation entries by a colourable device used to defraud the RevenueDept. The payment made towards thepurchase through a broker and demating of those shares was only an afterthought. Since, Shri MukeshChoksi has given the names of such beneficiaries who were spread all over the country, it is extremely difficult to confront the statement given by him before each and every beneficiary. Therefore, the Hon’ble Tribunal’s finding in the referred cases relied by the appellant, that the transactions could not have been discarded as bogus based on the un-confronted statement of Shri MukeshChoksi cannot be followed as the Hon'ble
Tribunal's finding is case specific. On the contrary, Shri MukeshChoksi himself has categorically admitted that he had provided accommodation entries and therefore he cannot be stated that he is unrelated party to the appellant. Therefore, I am of the considered opinion that though the shares were demated and STT has been paid, the accommodation entries were provided by Shri MukeshChoksi in order to enable the people like the appellant to declare speculation profit/loss, short term capital gain, long term capital gain, profits/ loss on account of commodity trading, introducing share application money or introducing money in the form of gift. The Assessing Officer's action in treating those transactions as bogus and taxing the same is upheld. Therefore, the grounds of appeal are not found to be acceptable. In background of the above detailed discussion and facts & circumstances of the case, the contentions of the Assessee cannot be accepted. The grounds of appeal of the Assessee therefore are disallowed.”
5. Considering the facts of the present case and the findings given by CIT(A), I find no infirmity in the order of CIT(A).
In the result, the appeal filed by the assessee is dismissed. Order pronounced in the open court on the date mentioned on the caption page.