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TMI Blog2015 (5) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the bogus accommodation entries. On the basis of the details obtained during the search by the investigation wing, it was noted that the assessee also had made sales and purchases of shares of M/s Buniyad Chemicals Ltd through M/s. Gold Star Finvest P.Ltd which had provided the accommodation entries. M/s Buniyad Chemicals Ltd as well as M/ s. Gold Star Finvest P.Ltd were floated by Mukesh Chokshi only. Since it was admitted by Mukesh Chokshi that he was providing accommodation entries only through its various companies, accordingly a notice u/s. 148 was issued after recording the reasons. Thus AO was having sufficient reasons to believe that there was an escapement of income, accordingly, he was justified in reopening the assessment u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 147 of the I.T. Act. 2. In the grounds of appeal, assessee is aggrieved for reopening of assessment u/s.147 as well as for merit of the addition made on account of income from undisclosed sources. 3. Rival contentions have been heard and record perused. There was a search undertaken in the case of M/s Mahasagar Securities P.Ltd. and its group companies including M/s.Gold Star Finvest P.Ltd. on 25.11.2009. A statement of Shri Mukesh Chokshi, Director of M/ s. Mahasagar Securities P.Ltd. was recorded during the search wherein Mukesh Chokshi had explained in detail the modus of operation of the accommodation entries racket being run by him by floating some 34 companies and admitted to be in business of providing the bogus accommodation ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said company opted for demat mode of trading on the Ahmedabad Stock Exchange & as a consequence of which, the assessee converted the entire physically held 15000 shares into a dematerialized form from 27th December 2001 through IL&FS Securities Services Limited. Subsequently assessee sold the entire 15,000 shares of the said company during 5th February 2003 to 26th February 2003 for a sale consideration totaling to ₹ 13,13,256/-. The Assessing Officer has made additions of ₹ 13,13,256/- to the total income of the assessee by treating the entire sale consideration of the shares of Buniyad Chemicals as an income from Undisclosed source. We found that the assessee had submitted a copy of the Share Certificate, during the course o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch statement or the copy of deposition should be furnished to the assessee with opportunity to cross examine the deponent, if required by the assessee .If it is not done, it is violation of principle of natural justice. Hence order is bad in law.
8. Applying to the facts of instant case to the proposition laid down by the coordinate bench, as discussed above, we do not find any merit in the addition so made by treating the sale proceeds of shares as undisclosed income of the assessee. Accordingly, the AO is directed to delete the same.
9. In the result, appeal of the assessee is allowed in part, in terms indicated hereinabove.
Order pronounced in the open court on this 18/12/2014. /12/2014 Sd/- Sd/- X X X X Extracts X X X X X X X X Extracts X X X X
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