9911796707
TMI Blog2016 (9) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO having territorial jurisdiction over new address has been given. No prejudice is being caused to the assessee on the basis of this procedure. bogus accommodation entries with regard to short-term/long term capital gain/loss - Held that:- The AO has directed the assessee to produce evidence demonstrating the genuineness of this transaction. The assessee failed to produce any documents. Firstly, onus is upon the assessee to demonstrate that his claim towards long term capital gain is a genuine claim. The AO has not made reliance either upon the statement of Mukesh Chokshi or any other information from Mahasagar Securities Pvt. Ltd. He has made reference to the facts and circumstances revealed during the course of search, but he has deducted defects in the conduct of the assessee only. In para-13, he has specifically mentioned that the assessee has not submitted delivery notes, issued by Goldstar Finvest P.Ltd. indicating that the assessee has purchased shares. The assessee has not produced DEMAT account, and thereafter an additional circumstances was mentioned by the AO that Buniyad Chemicals went into liquidation and it was wound up on 9.7.1999. According to the AO no pruden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 148 of the Income Tax Act. In response to the notice, the assessee wrote a letter dated 26.4.2010 and pointed out that he has been filing return with ITO, Ward-7(3), Ahmedabad till A.Y.2009-10. It was also pleaded that the ITO, Ward-10(4) has no territorial jurisdiction and notice is bad in law. The ld.AO has considered objection of the assessee and rejected them. Record of the assessee was transmitted to the AO who has territorial jurisdiction over the assessee, i.e. where the assessee has been filing return, and ultimately, assessment order was passed by ITO, Ward-7(3), Ahmedabad on 27.12.2010 and addition of ₹ 3,99,070/- was made to the total income of the assessee. Appeal to the CIT(A) did not bring any relief to the assessee on this issue. 4. Before me, the ld.counsel for the assessee has raised two fold submissions. In the first fold of submission, he contended that territorial jurisdiction over the assessee was with ITO, Ward-7(3), Ahmedabad, and therefore, ITO, Ward-10(4) could have not formed any opinion about the escapement of income, and should have not issued notice under section 148 of the Act. In his second fold submission, he pointed that in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reading of the reasons, it is ascertainable that income has escaped assessment in the case of the assessee. As far as the objection with regard to territorial jurisdiction of the AO is concerned, I find that ITO, Ward-10(4) has recorded reasons, because, the transaction was carried out from address situated within his territorial jurisdiction. Moment, the assessee appraised him about his new address, jurisdiction to the AO having territorial jurisdiction over new address has been given. No prejudice is being caused to the assessee on the basis of this procedure. 7. In the next ground of the appeal, the grievance of the assessee that the ld.CIT(A) has erred in confirming the addition without giving opportunity to cross-examine. 8. Brief facts of the case are that the assessee had purchased 9000 shares of Buniyad Chemicals. According to the assessee, it had a long term capital gain of ₹ 3,93,356/-. This transaction of the assessee has been disbelieved and addition under the head income from undisclosed sources has been made. The AO has highlighted modus operandi of generation of alleged bogus long term capital gain. 9. Before adverting to the argument of the ld.coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ock exchanges. The client gives cash against these profit bills. The cash is deposited in the subsidiary accounts like Talent infoway Ltd., Buniyad Chemical Ltd. etc and then funds are transferred to the bank account of the broking company issuing the bill (Mahasagar Securities Pvt. Ltd, Gold-star Finvest Pvt. Ltd etc). The cheque equivalent to the amount of profit is issued to the client from the account of the broking company like Mahasagar, Goldstar etc, thus enabling the client to generate profit. 10. The aforesaid facts have been duly confirmed by Shri Mukesh M Chokshi in his statement recorded u/s. 131 on 11/12/2009. In reply to question No. 7 of his statement that how genuine are these sales and purchases of shares. In reply, it is stated that both sale/purchase bill issued by him were bogus transactions. He had also explained some of the transactions too. Summary of Modus Operandi as understood is as under Explanation of various terms: 1. 'Run Date': The date on which data was originally extracted from Choksi's computers. 2. 'Page No': each assessee's ledger is available on a different page no. 3. 'Goldstar Finvest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital account of the assessee/beneficiary. The benefit of the Long Term Capital Gain will be used in the next financial year i.e. F.Y. 2003-04 or later. Examples from Actual Bills of the assessee We look at the bill of Sudhir Jumani HUF, 703, Sarovar Complex, Navrangpura, Ahmedabad, he has sold 9000 shares of 'Buniyad Chemicals Limited'tCompany under liquidation Sr No 137 of list published by The Official Liquidator. Hon'ble High Court of Bombay CP No. 24 of 1993 date of winding up 09-07-1999) on 25-04-2002. As there are only sale transactions in his ledger for the year, he would have had a bogus bill generated showing purchase 12 months before this date, (a case of Long Term Capital Gain ). The purchase of these 9000 shares is reflected in his ledger for F.Y. 2001-02 on 17/04/2001. The purchase bill is a bogus one. The actual transfer of shares and payment of consideration (in cash) would have taken place a few days prior to date of sale i.e. 17/04/2002 i.e. in F.Y. 2002-03. The amount should thus be taxed in financial year 2002-03 relevant to Asst Year 2003-04. 11. From the above discussion, it is very clear that transactions of purchase/sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee only. In para-13, he has specifically mentioned that the assessee has not submitted delivery notes, issued by Goldstar Finvest P.Ltd. indicating that the assessee has purchased shares. The assessee has not produced DEMAT account, and thereafter an additional circumstances was mentioned by the AO that Buniyad Chemicals went into liquidation and it was wound up on 9.7.1999. According to the AO no prudent businessmen would purchase shares of such company, and that will ever generate profit to an assessee. The assessee failed to produce share certificate numbers, distinctive numbers and how these shares were dealt with. In other words, nothing has been brought on record for justifying the transaction. Even if for arguments sake, the contention made by the assessee that no opportunity to cross-examination was given, and therefore, that material is excluded is accepted, then also it would come that ld.AO did not rely upon on those evidence. There is no evidence produced by the assessee to justify the genuineness of his transaction. Before me, the order of the ITAT, Mumbai bench has been referred. In para 3.4.1, the Tribunal has recorded finding in that case. The Tribunal has spe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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