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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA
O R D E R Per Shamim Yahya, A. M.: These appeals by the same assessee are directed against the respective orders of the Commissioner of Income Tax (Appeals)-41, Mumbai (‘CIT(A)’ for short) dated 08.02.2017 and pertain to the assessment years (A.Y.) 2008-09 and 2009-10.
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.
4.1 During the search action, statement on oath was recorded in which Shri Mukesh Choksi had admitted that he and his group was engaged in fraudulent billing activities and giving accommodation entries.
4.2 During the course of assessment proceedings, the Assessing Officer (AO) observed that the assessee had offered Short Term Capital Gains of Rs.1,82,363/-and Oil for Rs. 2,06,8257- through M/s. Alliance Intermediaries & M/s. Network P. Ltd., a concern operated by Shri Mukesh Choksi.
4.3 The assessee was show caused to explain as to why the above transactions made through M/s. Alliance Intermediaries & M/s. Network P. Ltd. should not be treated as bogus Short Term Capital Gains and bogus investment. However, the assessee failed to submit any explanation.
4.4 Information was received under section 133(6) from National Stock Exchange of India wherein it was submitted that M/s. Alliance Intermediaries & M/s. Network P. Ltd. was debarred by the National Stock Exchange with effect from 19.02.2004 to perform as a registered brokers.
4.5 The AO concluded that the Short Term Capital Gains offered amounting to Rs.1,82,363/- and investment in shares of Richa Knits for Rs.3,41,500/- and Essar Oil for Rs.2,06,825/- through M/s. Alliance Intermediaries & M/s. Network P. Ltd. were bogus and added the same to the total income of the assessee.
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.
Hence, the ld. CIT(A) upheld the action of the Assessing Officer.
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:
In the aforesaid order an elaborate discussion has been made by Hon’ble Delhi High Court. Likewise, the Indore Bench of the Tribunal in the case of Agarwal coal Corporation has considered various decisions and finally decided in favour of the Revenue. if the facts of the present appeal are analyzed on the touch scale of aforesaid decisions, one fact is clearly oozing out that merely a paper work was camouflaged by the assessee with the help of Shri Mukesh Choksi and its associates firms. It is alos undisputed facts that the statement tendered by Shri Mukesh Choksi was neither contradicted nor proved to false, therefore, we find no infirmity in the conclusion of the ld. Commissioner of Income Tax (Appeal), thus, on merit also, the order of the ld. Commissioner of Income Tax (Appeal) is affirmed.
Finally, the appeal of the assessee is dismissed.
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.
Accordingly, I do not find infirmity in the order of the ld. CIT(A) and hence I confirm the same.