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TMI Blog2016 (4) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the addition - Decided in favour of assessee - I.T.A. No.2587/Mum/2013 - - - Dated:- 26-2-2016 - SHRI AMIT SHUKLA, JM AND SHRI RAJESH KUMAR, AM For The Appellant : Shri Gajendra Golchha For The Respondent : Shri Naveen Gupta ORDER PER RAJESH KUMAR, AM : This appeal by the assessee is directed against the order dated 22/02/2013 of Commissioner of Income Tax (Appeals)- 31, Mumbai (Hereinafter called as the CIT(A) for assessment year 2003-04. The assessee has raised the following grounds of appeal: 1. The learned CIT (Appeals) has erred in confirming the addition of ₹ 5,50,520/- as income from undisclosed sources. Reasons assigned by him for doing the same are wrong and insufficient. Provision of the Act ought to have been properly constructed before disallowing the same. Regards being had to the facts and circumstances of the case, the said disallowance ought not to have been made. 2. The learned CIT (Appeals) has erred in confirming the addition of ₹ 55,050/- as income as unexplained expenditure u/s. 69C. reasons assigned by him for doing the same are wrong and insufficient. Provisions of the Act ought to have been properly co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee with ITT Corporate Services Ltd. Ultimately these shares were sold on 21.11.2002. 2.2. The ld AO added the long term gain of ₹ 5,50,520/- to the income of the assessee as income from other sources by holding that the transactions of assessee s purchase and shares were bogus and fraud and was part of hawala racket floated by Mr Ckokshi and his associate companies including M/S Goldstar Finvest Pvt Ltd and the fact was also admitted by Mr Mukesh Chokshi and his group companies during the course of search u/s 132 of the Act that they were carrying on a hawala rocket by supplying bogus bills for equity shares for making speculative profit, short term gain and long term gain and the list of beneficiary included the name of the assessee. The enquiry by the AO from National Stock Exchange revealed that no transaction in the name of the assessee vide letter dated 10.11.2010 and perusal of the D- Mat a/c showed that these were off market transactions. Ultimately the AO concluded that all these transaction were a colourable device and as such sham transactions to channelize the black money. 2.3. The FAA also confirmed the addition made by the AO for the reasons that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct on the basis of the report of the investigation wing of the department, that the officers of the wing had carried out a search and seizure action in the case of Mukesh Choksi group concerns who were engaged in the business of providing accommodation entries, that the was informed that the assessee was beneficiary of the entries provided by one of the Mukesh Choksi group concern i.e.GFPL, that the had claimed LTCG for four scrips, that two out of four were sold on stock exchange and remaining two were sold off market, that the FAA had given categorical finding of fact that the assessee was holding the shares for more than one year, that folio no and copies of certificates were made available to the AO, that the stamp of the company proved that shares were actually transferred in the name of the assessee, that sale of the shares and receiving the sale proceeds through banking channels is not in doubt, that Mukesh Choksi had not alleged that the transactions in question were tainted, that the assessee was not allowed cross examination of Mukesh Choksi with regard to the transactions entered in to by her.Considering the above facts, we are of the opinion that the FAA was justified i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of ₹ 1.00 crore as undisclosed income of the assessee. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the assessing officer to delete the assessment of ₹ 1.00 crore made in the hands of the assessee. (iii) Masuma S Tankiwala Vs ITO ITA No1867/Mum/2014 AY 2004-05 dated 27.11.2014 para 5 is extracted below:- 5. After hearing the learned DR and after perusing the material placed on my record, I am of the opinion that the facts of the present case are similar to the earlier appeal decided by the Tribunal on similar facts in the case of Shri Anantrai B Shah vs. ITO, vide order dated 14.12.2012 in ITA No.1842/Mum/2012 for A.Y 2003- 04, copy of which has been placed on the record and was also available with the learned DR. In the said case similar addition of ₹ 1,76,037/- was made on account of alleged sale of shares of M/s. Buniyad Chemicals Limited through Goldstar Finvest Pvt. Ltd., and the addition was deleted by the Tribunal with the following observations :- 7. After considering the submission and perusing the material on record, I found that the assessee has discharged his onus by filing complete details ie. purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dded ₹ 55,050/- as unexplained expenditure to the income of the assessee which was also upheld by the FAA. 3.1. We have heard the rival submissions and perused the materials on records. After hearing both the AR and DR we find that the basis of additions by the AO is completely unfounded and the AO made the addition on the basis of just conjecture and surmises that the assessee had transacted through M/S Goldstar Finvest Pvt Ltd which was a group company of Mr.Mukesh Chokshi a hawala dealer. The ld AR submitted before us that no materials has been brought on records by the AO while making additions by just giving one line (last line) observation on page 5 of the assessment order. We find merit in the arguments of the ld AR that there is no basis for the said addition u/s 69 of the Act and order of FAA confirming the same is also wrong. In view of our observation in hereinabove we allow this ground in favour of assessee by deleting the addition of ₹ 55,050/-. The AO is directed accordingly. 4. The Ground No.3 is consequential in nature and does not require any adjudication. 5. In result the appeal of the assessee is allowed. Order pronounced in the open court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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