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Income Tax Appellate Tribunal, “I” BENCH, MUMBAI
Before: SHRI R.C.SHARMA, AM & SHRI AMARJIT SINGH, JM
Assessee by: Shri None Department by: Shri Agnes P. Thomas सुनवाई क" तार"ख / Date of Hearing: 11.05.2016 घोषणा क" तार"ख /Date of Pronouncement:12.08.2016 आदेश / O R D E R PER AMARJIT SINGH, JM:
The assessee has filed the present appeal against the order dated 15.11.2010 passed by the Commissioner of Income Tax (Appeals) 22, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2006-07. A.Y. 2006-07
The assessee has raised the following grounds:-
1. On the facts and in the circumstances of the case and in law, the CIT(A) erred in holding that the income of Rs.6,70,059/- is chargeable under the head “income from other sources and not income from “Long Term Capital Gains”.
2. On the facts and in the circumstances of the case and in law, the CIT(A) erred in holding that the transaction of purchase and sale of shares M/s. Micro Technologies Ltd. are not genuine transaction.
3. On the facts and in the circumstances of the case and in law, the CIT(A) erred in not giving an opportunity to cross examine Mr.Mukesh Chokesy, whose statement has been relied on by the CIT(A) and the Assessing Officer in concluding that the transactions are not genuine.
4. On the facts and in the circumstances of the case and in law, the CIT(A) erred in holding that an amount of Rs.55,806/- as unexplained investment.
5. On the facts and in the circumstances of the case and in law, the CIT(A) erred in not appreciating that taking the amount of Rs.55,806/- as unexplained investment has lead to double addition as the Appellant has already offered the amount of Rs.55,603/- as speculation income.”
3. The brief facts of the case are that the assessee filed his return of income on 02.01.2007, declaring a total income to the tune of Rs.2,15,110.00. The return was processed u/s.143(3) of the Income Tax Act, 1961 ( in short “the Act”) and notices u/s.143(2) and 142(1) of the Act were issued and served upon the assessee. The assessee has declared income from salary, business, long term capital gains and 2 A.Y. 2006-07 income from other sources. The Assessing Officer assessed the income to the tune of Rs.9,40,980/-. The assessee was not satisfied from the assessment assessed by the Assessing Officer, therefore, the assessee filed an appeal before the CIT(A) who confirmed the order of the Assessing Officer. Therefore, assessee has filed the appeal before us.
ISSUE NO. 1 &5:-
Issue no.1 and 2 are interconnected, therefore, are being taken up together of adjudication. None appeared on behalf of the assessee. The learned representative of the department has argued that the CIT(A) has rightly confirmed the income to the tune of Rs.6,70,059/- as income from other sources. Therefore, the order passed by the CIT(A) on this ground is not liable to be interfere with at this appellate stage. The assessee has shown the long term capital gain on sale of 2100 shares of Micro Technologies Ltd. sold to the tune of Rs.6,77,059/-. The cost price of the said shares were shown as RS.25,210/- and long term capital gain was calculated as Rs.6,44,849/-. The assessee also informed that the share of Micro Technologies Ltd. were purchased from Mahasagar Securities Ltd. on 30.06.2004 and sold through Sunchan Securities Ltd. on 24.01.2006. The Assessing Officer recorded the statement of Shri Mukesh Choksi, Director of Mahasagar Securities Pvt. Ltd. dated 03.12.2008 who stated that the assessee did not purchase the shares of Micro 3 A.Y. 2006-07 Technologies Ltd. through the broker. The entries are only the accommodation entries. The Assessing Officer did not rely upon the statement of Shri Mukesh Choksi however conducted further inquiry to know the veracity of the case. The assessee did enquiry from interconnected Stock Exchange of India Ltd. but no such trades were recorded there. The assessee claimed transaction from the Mahasagar Securities Pvt. Ltd. which was also earlier known as Richmond Securities Pvt. Ltd. Assessing Officer further conducted the enquiry and came to know that the Richmond Securities Pvt. Ltd. was an expelled member of the interconnected stock exchange of India w.e.f. 21.06.2004 and the purchase of 2100 shares of Micro Technologies Ltd. through Mahasagar Securities Pvt. Ltd. on 30.06.2004 was not genuine. Apparently, it is clear that no purchase of the shares of Micro Technologies Ltd. were made either through Richmond Securities or Mahasagar Securities Pvt. Ltd. Assessee also explained that by virtue of order dated 16.12.2008 he offered net sale of Rs.6,44,849/- as short term capital gain. Regarding speculation profit of Rs.55,603/- also, the director of broker Alliance Intermaditeries & Network Pvt. Ltd. Shri Mukesh Choksi attended in response to summon and deposed that the traction with reference to this also accommodation entries. One being confronted, the assessee did not offer any explanation before Assessing Officer. Accordingly, Assessing Officer held that the assessee had not purchased shares of Micro Technologies Ltd. and the transactions were bogus. It was also 4 A.Y. 2006-07 observed that the opening balance in assessee’s HDFC bank account as on 01.01.2005 was Nil and credit of 2100 shares of Micro Technologies Ltd. on 24.01.2006 and debit on 25.01.2006 also makes it clear that the assessee has got the shares transferred on the date of sale i.e. on 24.01.2006. Assessing Officer also noted that the assessee had not disclosed dividend in its account although Micro Technologies Ltd. had declared final dividend @ 10% on 09.08.2005 with the record date on 05.09.2005. If the assessee holds these shares w.e.f. 30.06.2004 he should show the received dividend which is not on record. Therefore the assessee did not purchase the shares of Micro Technologies Ltd. pm 30.06.2004. Moreover, the assessee did not produce the proof of payment to the broker or any other credible evidence on record. It is also on record that the assessee failed to furnish details regarding investment in shares of Paramount Comm. Ltd., Ind Merchant Bank and India Bull Finance Ltd. The investment in these shares of Rs.55,806/- is more or less corresponding to the speculation profit of Rs.55,603/- disclosed by the assessee which is admitted as bogus by broker Shri Mukesh Choksi. The Assessing Officer treated this investment of Rs.55,806/- as unexplained investment.
Moreover nothing came into the notice that an amount of Rs.55,806 has been added only on the basis of statement of Shri Mukesh Choksi. The Assessing Officer deducted the tax by going 5 A.Y. 2006-07 through the accounts of assessee as well as on the basis of documents of the other connecting firms. Therefore, the transactions were not found genuine even at this appellate stage also no justifiable facts and materials are available to which it can be assumed that the Assessing Officer wrongly confirmed the order of the Assessing Officer. Even after the services of the notices assessee did not bother of it.
Keeping in view of the case of the assessee, we are of the view that the matter is not require to be interfere with at this appellate stage. Accordingly, these issues are decided in favour of the revenue and against the assessee.
In the result, the appeal filed by the assessee is hereby 7. dismissed.
Order pronounced in the open court on 12th August, 2016. (R.C.SHARMA) (AMARJIT SINGH) लेखा सद"य / ACCOUNTANT MEMBER "या"यक सद"य/JUDICIAL MEMBER मुंबई Mumbai; "दनांक Dated :12th August, 2016 MP MP MP MP