JAYDEEP SHAH,MUMBAI vs. ITO 24(2)(3), MUMBAI

The grounds of appeal read as under:

2 (A.Ys.2008-09 & 2009-10) Jaydeep C. Shah vs. ITO 1. The Hon’ble CIT(Appeals) erred in law and on facts is not giving sufficient opportunity of being erred before disposing of appeal of the appellant. 2. The appellant prays that his appeal may be please resorted back to the Hon’ble CIT(A) for giving the sufficient hearing and reconsideration of the appeal before Honorable CIT(A). 3. Since the grounds are common, these appeals are being disposed of by this common order. Since the facts are similar, I am referring to facts and figures from assessment year 2008-09.

Briefly stated the facts of the case is that the assessment was re-opened based on the information received from Investigation Wing of Income-tax Department consequent to the search action conducted in the Mahasagar group of cases that the assessee has taken entries from one M/s. Mahasagar Securities Pvt. Ltd and its related group of companies, all run by Shri Mukesh Choksi, who was engaged in fraudulent billing activities and giving accommodation entries in order to enable the client to declare speculation profit/loss, Short Term Capital Gain/ Long Term Capital Gain, profit and loss on account of commodity trading, introduction of share application money, etc.

Against the above order, the assessee appealed before the ld. CIT(A). The ld. CIT(A) noted that several notices were given to the assessee, however, there was neither any compliance nor any adjournment petition filed. Accordingly, the ld. CIT(A) decided the issue. He held that after going through the assessment order, it based on the investigation conducted in case of Shri Mukesh Choksi Group and further confirmation from stock exchange despite request from the Assessing Officer, the assessee has not filed any submissions or factual evidence in support of the claim.

Against the above order, the assessee is in appeal before the ITAT. It is noted that despite service of notice for hearing on more than one occasion nobody appeared on behalf of the assessee. Hence, this appeal is being disposed of by hearing the ld. Departmental Representative and perusing the records. The ld. Departmental Representative submitted that the assessee was already engaged into money laundering activities and the assessee should be held accountable in this respect.

Upon careful consideration I find that these appeals relate to fraudulent bogus entries taken from Shri Mukesh Choksi group of companies. Shri Mukesh Choksi has clearly admitted that he and his group companies were engaged in providing bogus accommodation entries of various types. Information was also received u/s. 133(6) from National Stock Exchange wherein it was submitted that M/s. Alliance Intermediaries & Network Private Limited was debarred by National Stock Exchange w.e.f. 19.02.2004 to perform as registered brokers. In this factual scenario, the Assessing Officer has concluded that short term capital gain offered amounting to Rs.1,82,263/- and investment in shares of M/s. Richmond Securities Private Limited by Shri Mukesh Choksi, were bogus. Hence, the impugned amounts were added to the total income of the assessee. The assessee had not submitted any response to the Assessing Officer’s notice in this regard, nor any submissions were made before the ld. CIT(A) or ITAT. I further note that a similar case in ITAT Mumbai Bench in for A.Y. 2003-04 in the case of Disha N. Lalwani vs. ITO vide order dated 22.03.2017, has elaborately considered the issue of bogus entering from Shri Mukesh Choksi group, wherein the tribunal had concluded as under:

The above discussion and the precedent clearly make it clear that bogus accommodation entries were obtained by the assessee and were camouflaged by paper work prepared with the help of Shri Mukesh Choksi and his associate firms.