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TMI Blog2015 (3) TMI 965X X X X Extracts X X X X X X X X Extracts X X X X ..... s made by the AO on the basis of suspicion and surmises and without bringing any material on record". 4. Facts of the case, in brief, are that the assessee is an individual and is a partner in M/s.Chimanlal Bhutmal and Company. She filed her return of income on 25-11-2003 declaring total income at Rs. 2,52,380/-. In the said return, the assessee had shown income from capital gain on account of sale of shares of Database Finance Ltd. amounting to Rs. 10,24,019/- against total sale value of Rs. 10,38,600/-. The above capital gain was claimed as set-off against capital loss arrived at sale of jewellery resulting in net loss at Rs. 3,83,182/-. 5. In this case, information was received from ADIT(Investigation-IV) that there are certain irregularities in sale of shares of the said company. The sale of share is an accommodation entry and required to be taxed as income from other sources. The Assessing Officer accordingly issued notice u/s.148. 5.1 During the course of assessment proceedings the statement of the assessee was recorded and the Assessing Officer requested the assessee to produce the proof of genuinity of transaction, such as envelope containing the stamp of postal authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... office and residential premises of several Stock Brokers and Managers of Finance Companies and several other persons, it was found that there was a large scale of manipulation in the purchase and sale of shares, in particular, the shares of M/s. Database Finance Ltd. and M/s. Fast Track Entertainment Ltd. During the enquiries by the Investigation Wing, statement of one Shri Milan Ramniklal Parekh, Managing Director of M/s. Action Financial Services (I) Pvt. Ltd. share brokers through whom the assessee claimed to have sold the shares of Database Finance Ltd. was recorded on 20-01-2006. In the statement, he has clearly stated that one of their employees has recorded off market transactions in a few scrips including Database and Fast Tract. It was also stated by the Managing Director of the said company that they have issued bogus bills to some parties showing date of transaction as desired by them and the operator and they are not genuine transactions. 6.2 The Ld.CIT(A) provided a copy of the relevant questions and answers of the above statement to the assessee during the appeal proceedings. He further noted that in the course of investigations the statement of Shri Prathik Shah, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the same into regular books of accounts in the garb of exempted long term capital gain on sale of shares. In short, the whole arrangement or scheme is a money laundering device. He accordingly held that the series of transactions apparently carried out through a few brokers are not the real and genuine transactions and the transactions are only accommodation entries. Rejecting the various explanations given by the assessee and distinguishing the various case laws cited before him the Ld.CIT(A) upheld the action of the Assessing Officer in treating the amount of Rs. 10,38,600/- as income from undisclosed sources. 6.3 Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 7. The Ld. Counsel for the assessee strongly challenged the order of the CIT(A). Referring to pages 8 to 11 of the Paper Book the Ld. Counsel for the assessee drew the attention of the Bench to the various details submitted before the Assessing Officer along with an affidavit dated 15-12-2007. Referring to Pages 12 and 13 of the paper book he drew the attention of the Bench to the details given before the ADIT (Investigation -IV), Pune. Referring to Pages 14 and 15 of the paper book he drew ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons. He accordingly submitted that in view of the decision of the Pune Bench of the Tribunal in the case of Surendra Peety and others (Supra) and the various other decisions the claim of the assessee should be allowed and the order of the CIT(A) be set-aside. He also relied on the following decisions : "1. Shri Avinash Kantilal Jain Vs. Addl.CIT - ITA No.980/PN/2010 order dated 31-10-2012. 2. ITO Vs. Ajay Shantilal Lalwani & Others - ITA No.163/PN/2010 order dated 18-11-2011. 3. Sachin N, Morakha Vs. ITO - ITA No.1122/Mum/2012 order dated 01-06-2012 4. ACIT Vs. Smt. Lata Soni - ITA No.77/JU/2010 order dated 19-01- 2012. 5. Shri Jafferali K. Rattonsey Vs. DCIT - ITA No.5068/Mum/2009 order dated 25-01-2012. 6. The CIT, Jamshedpur and Arun Kumar Agarwal (HUF) & Others reported in 2012-TIOL-603-HC-JHARKHAND-IT." 8. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A). He submitted that in the case of Punjabi Group the Tribunal has restored the issue to the file of the Assessing Officer for fresh adjudication. In the case of Mundada Group the Tribunal has decided the issue in favour of the Revenue. Therefore, the order of the CIT(A) he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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