2011 (3) TMI 1653 - AT - Income Tax

Summary

Issues Involved:
1. Jurisdiction under section 153A.
2. Validity of additions/disallowances made by the Assessing Officer (A.O.).
3. Reliability of statements made by Mr. Mukesh Choksi.

Summary:

Issue 1: Jurisdiction under section 153A
The assessee contested the jurisdictional issue under section 153A, which was upheld by the CIT(A). However, the cross objections regarding jurisdiction were not pressed during the arguments and were dismissed as withdrawn.

Issue 2: Validity of Additions/Disallowances
The assessee filed returns for the assessment years 2001-02 and 2002-03. The A.O. initiated proceedings u/s 147 and passed an assessment order u/s 143(3) r.w.s. 147, disallowing claims of short-term capital gains on shares deemed bogus. The CIT(A) initially allowed the assessee's appeal against these disallowances. A subsequent search on 28.06.2006 led to reassessment u/s 153A, repeating the same disallowances. The CIT(A) again deleted these additions, and the Revenue did not appeal against the original CIT(A) orders. The Tribunal found no incriminating material from the search to justify reassessment and upheld the CIT(A)'s deletion of additions, confirming that the issues decided in the original assessment could not be reconsidered without fresh material.

Issue 3: Reliability of Statements by Mr. Mukesh Choksi
The A.O. relied on a revised affidavit by Mr. Mukesh Choksi, who admitted to providing accommodation entries. However, the CIT(A) and the Tribunal found Mr. Choksi's statements inconsistent and unreliable, noting his frequent changes in testimony. The Tribunal cited the Hon'ble Calcutta High Court's principle that a person indulging in double-speaking cannot be deemed truthful. The Tribunal concluded that Mr. Choksi's statements lacked credibility and did not support the Revenue's case.

Conclusion:
The Tribunal dismissed the Revenue's appeals and the assessee's cross objections, confirming the CIT(A)'s deletion of additions and disallowances. The Tribunal emphasized the lack of incriminating evidence from the search and the unreliability of Mr. Choksi's statements.