MANOJ GOPAL GUPTA,MUMBAI vs. ITO 25(3)(1), MUMBAI

Brief facts of the case are that the assessee filed return of income for relevant AY on 31.08.2015 declaring total income of Rs. 1,63,750/. In the return of income the assessee claimed Long Term Capital Gain (LTCG) of Rs. 2,57,419/- on the sale of 3,000/- share of Talent Info way Ltd. The case of assessee was re-opened u/s 147 of the Act. The re-opening of the assessment in case of assessee was that in his case specific information was received from DDIT (Investigation), Unit-4, Mumbai vide letter dated 07.03.2011 that during the search action u/s 132 of the Act in case of Mahasagar Securities Pvt. Ltd. and other group concern on 25.11.2009, who were engaged in the fraudulent billing activity and providing accommodation entries. It was also revealed that Mukesh Choksey was the master mind of the whole affairs, who had admitted to have indulged in bogus accommodation entries. On the perusal of record of search the name of assessee was also revealed that assessee has availed bogus bill from one of his concern during the relevant AY in the name of Talent Infoway Ltd. In this way, on the basis of specific information, the case of assessee was re-opened by issuing notice u/s 148 dated 25.03.2011. During the re-assessment proceeding, the entire sale consideration of share transaction amounting to Rs. 2,61,189/- was treated as unexplained cash credit and added u/s 68 of the Act in the income of assessee in assessment order dated 143(3) r.w.s 147 of the Act. The assessee filed an appeal before the CIT(A) but without any success. Thus, the present appeal is filed before us raising following grounds of appeal: “1. The learned CIT(A) erred in confirming the assessment as unexplained cash credit u/s 68, the sales proceeds of Rs. 2,62,189/- (in respect of long term capital gain of Rs. 2,57,419/- claimed exempt u/s 10(38)).

We have heard the Authorised Representative (AR) of assessee and the ld Departmental Representative (DR) for Revenue and perused the orders of authorities below. The Ld. AR of the assessee argued that re-opening of assessment in the case of assessee was made on the basis of statement of Mukesh Choksi. The copy of statement of Mukesh Choksi was supplied to the assessee during the re-opening assessment proceeding. The name of assessee is nowhere appeared in the entire statement of Mukesh Choksi. There was no incriminating evidence against the assessee to show that the assessee has availed accommodation entry. Assessee provided all documentary evidence for transaction of share and assessee proved that the transaction of LTCG declared by assessee in the return of income was genuine. The AO has not accepted the contention of the assessee. It was further argued that Ld. CIT(A) also not considered the genuinenity of the transaction despite the fact that all purchase bills were given along with the documents relating to dematerialization of share. On the other hand, the ld. DR for Revenue argued that the assessee availed the accommodation entry from the group concerned of Mukesh Choksi who were engaged in fraudulent billing activities and were only providing bogus entries. The assessee failed to prove or bring any evidence on record to establish that transactions were carried through recognized stock exchange. No sufficient document was filed before the AO. The assessee failed to discharge his onus to prove that transaction was genuine before the revenue authority.