ITO 14(1)(4), MUMBAI vs. HARIGOPAL TAPARIA, HUF, MUMBAI

आयकर अपीलीय अिधकरण, ‘एच’ खंडपीठ मुंबई INCOME TAX APPELLATE TRIBUNAL,MUMBAI “H” BENCH सव"ी राजे"", लेखा सद"य एवं संदीप गोसांई, "याियक सद"य Before S/Sh. Rajendra,Accountant Member & Sandeep Gosain,Judicial Member आयकर अपील सं/.ITA No.3014/M/2014,िनधा"रण वष"/Assessment Year-2003-04 Income tax Officer-14(1)(4) Shri Harigopal Taparia, HUF 2nd Floor, Room No.203, Earnest 5 A/B, Jai Hind Building No.1 1st Floor, Dr. A.M. Road House, Nariman Point Vs Mumbai-400 021. Bhuleshwar Mumbai-400 002. PAN:AABHH 8004 A (अपीलाथ" /Appellant) (""थ" / Respondent) िनधा"रती ओर से/Assessee by : None राज" की ओर से/ Revenue by : Ms. Kusum Bansal (DR) सुनवाई की तारीख / Date of Hearing : 24-11-2015 घोषणा की तारीख / Date of Pronouncement : 01.01.2016 आयकर आयकर अिधिनयम अिधिनयम,1961 क" क" धारा धारा 254(1)केकेकेके अ"तग"त अ"तग"त आदेश आदेश आयकर आयकर अिधिनयम अिधिनयम क" क" धारा धारा अ"तग"त अ"तग"त आदेश आदेश Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा सद"य सद"य राजे"" राजे"" केकेकेके अनुसार अनुसार PER RAJENDRA, AM- लेखा लेखा लेखा सद"य सद"य राजे"" राजे"" अनुसार अनुसार Challenging the order 26.02.2014 of CIT-28,Mumbai the Assessing Officer(AO)has filed the present appeal. Assessee-HUF,filed itss return of income on 10.09.2003,declaring income of Rs.1,84,877/-.The return was processed u/s.143(1)of the Act.The case was re-opened issuing notice u/s.148 of the Act.The AO completed the assessment on 27.12.2010,u/s.143(3)r.w.s.147 of the Act,determining the income of the assessee at Rs.31,23,930/-. 2.Effective ground of appeal is about deleting the addition of Rs.29.30 lakhs,made by the AO, u/s.69 A of the Act.During the assessment proceedings,the AO found that the assessee had shown long term capital gains(LTCG)on sale of shares amounting to Rs.29,92,277/-,that as per the information provided by the investigation wing of the department the assessee-HUF was one of the beneficiaries of the of the transactions entered in to with Mukesh Choksi and his group concerns(MCG).He directed the assessee to explain as to why the entries related with MCG should not be treated as income u/s.69 A of the Act and claim made by it under the head LTCG should be denied.After considering the submissions of the assessee,the AO held that the impugned capital gains represented the amount of undisclosed money that had been laundered by the assessee,that it had paid cash to MCG and had obtained bogus bills.Finally,he treated the LTCG as income taxable u/s.69A of the Act. 3.Aggrieved by the order of the AO,the assessee preferred an appeal before the First Appellate Authoirty(FAA).Before him,it was argued that the AO had not furnished the reasons recorded for re-opening the assessment,that the AO not verified the genuineness of the transaction,that it was not provided the copy of the statements of the persons of the MCG,that no cross examination

ITA/3014/Mum/2014-AY.2003-04,HT-HUF

was provided by the AO about the alleged bogus transaction,that the name of the assessee was not figuring in the statement of Mukesh Choksi.The FAA called for a remand report(RR) from the AO about non issuance of reasons recorded for reopening the assessment and the statements of Mukesh Choksi.The AO appeared before the FAA and admitted that the reasons and the copy of the statements were supplied on 20.02.2012 and 23.05.2012 respectively.After considering the available material the FAA held that there was tangible material for issuing notice u/s.148 of the Act,that reasons were not supplied to the assessee by the AO before he completed the assessment,that the sole basis for making addition u/s.69A of the Act was the statement of Mukesh Choksi,that the AO had made no independent inquiry to verify the correctness of his statement,that the assessee had vehemently denied the allegation,that it had submitted necessary bill and requisite details before the AO during the assessment proceedings,that AO had not brought on record any material to prove that the share transaction were not genuine,that the AO had not provided the copy of the statement of Mukesh Choksi and had provided cross examination to the assessee,it was a case of third party statement.The FAA referred to the orders of the Tribunal delivered in the cases of Mayur S Shah(ITA/2390/Mum/2013),Hetal K Vasa(ITA/6416/Mum/2012)and decided the matter in favour of the assessee. 4.Before us,the Departmental Representative(DR)supported the order of the AO.None appeared on behalf of the assessee,as stated earlier. 5.We have perused the material before us.We find that the AO had made addition to the income of the assessee u/s.69A of the Act on the basis of the statement of Mukesh Choksi (dtd. 11. 12. 2009),that the AO had held that the transaction entered into by the assessee-HUF with MCG were not genuine,that he had not supplied the reasons recorded for re-opening the assessment, that the copy of the statement of Mukesh Choksi was supplied to the assessee in the month of May,2012,that the assessment was completed in October,2010.In our opinion,only on this basis the order of the assessee is liable to be held invalid,as he had contravened the principles of natural justice.The FAA had given a categorical finding of fact that the AO had not brought any material on record to prove that the LTCG claimed by the assessee was not genuine.We find that the Tribunal has,in series of cases,held that only on the basis of statement of Mukesh Choksi, share transactions cannot be held to be bogus.Considering the facts and circumstances of the case,we are of the opinion that the order of the FAA does not suffer from any legal infirmity. So,confirming his order,we decide effective ground of appeal against the AO. As a result,appeal filed by the AO stands dismissed. फलतः िनधा"रती अिधकारी "ारा दािखल क" गई अपील नामंजूर क" जाती है Order pronounced in the open court on 1st January, 2016. आदेश क" घोषणा खुले "यायालय म" "दनांक 01 जनवरी, 2016 को क" गई । (संदीप गोसांई/Sandeep Gosain ) (राजे"" / Rajendra) "याियक सद"य/Judicial Member लेखा सद"य/Accountant Member मुंबई Mumbai, "दनांक Date: 01.01.2016 व.िन.स.Jv.Sr.PS. 2

ITA/3014/Mum/2014-AY.2003-04,HT-HUF

आदेश क" क" "ितिलिप "ितिलिप अ"ेिषत अ"ेिषत/Copy of the Order forwarded to : आदेश आदेश आदेश क" क" "ितिलिप "ितिलिप अ"ेिषत अ"ेिषत