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TMI Blog2016 (5) TMI 1414X X X X Extracts X X X X X X X X Extracts X X X X ..... also bogus and has escaped assessment within the meaning of section 147 r.w.s.148 of the Act. The reopening proceedings were in consequence to search and seizure operation carried out on Mr Mukesh M. Chokshi and his associate companies under section 132 of the Act by Investigation Wing of the Income Tax Department on 25.11.2009. During the course of search proceedings, Mr.Mukesh M Chokshi and Shri Jayesh K Sampat, Directors of the Companies admitted that M/s Mahasagar Securities Pvt. Ltd (related company) and other related companies were engaged in the fraudulent billing activities and thus were in the business of providing accommodation speculation profit/loss, commodities, profit/loss on commodity trading through MCX for the last so many years. During the course of search, a list of clients was extracted from the computer seized from M/s Mahasagar Securities Pvt.Ltd. In the list of beneficiaries, the name of the assessee(HUF) also appeared and thereafter the matter was intimated to the AO of the assessee. On the basis of the said intimation of Investigation Wing , the AO formed an opinion that the assessee has entered into bogus transactions of sale and purchase of shares. and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates, his net income @O.15% of total transactions has been shown as income and has been accepted by the ITAT. 3.1.9 Since the person from whom shares are shown purchased and through whom the sales is also claimed, has categorically been found by ITAT in providing only accommodation entries and no genuine transaction have been found to have been done by such person, no purchase and sale of shares from or through such person is genuine. Therefore, all the transactions showing Long Term Capital Gain in the return are bogus. Accordingly, the addition made by the AO is upheld, and grounds of appeal are hereby dismissed." 4. The ld.AR of the assessee vehemently submitted before us that the action of the AO and the order of the ld.CIT(A) confirming the action of the AO were totally wrong and against the facts and circumstances of the case. The assessee's purchase and sales of shares were not considered and appreciated correctly by the authorities below. The ld. Counsel submitted that the assessee has purchased 12000 shares for a consideration of Rs. 17,417/- from M/s. Talent Infoways Ltd. on 17.10.2003 by referring to the bills and contract notes as filed in paper book. Similarly, The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound a beneficiary of the fraudulent bills during the course of search and seizure at the premises of Mr.Mukesh M Choksi and his group companies on 25.11.2009 and it was only upon the admission of Mr.Choksi during the course of search that all these companies were not carrying on any business but doing bogus sale and purchase of shares by way of accommodation entries. The ld. DR also submitted that name of the assessee was appeared in the list of beneficiaries which was extracted from the computer of M/s Mahasagar Securities Pvt Ltd during the course of search and seizure action. Finally, the ld. DR prayed for upholding the orders of authorities below. 6. We have considered the rival contentions and perused the relevant material placed before us including the orders of authorities below. We find that the case of the assessee was reopened following the search and seizure action on Mr.Kukesh M Choksi and his group companies including M/s Mahasagar Securities Private Ltd on 29.11.2009 and during the course of which Mr.Mukesh M Choksi admitted that he and his group companies were indulged in the fraudulent billing of shares and securities. It was further found upon the extraction of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e profit/bogus capital loss accommodation entries. In this context, the Assessing Officer also referred to the fact that the material obtained from Mr.Mukesh Choksi contains reference of M/s. Alliance Intermediaries & Network Pvt. Ltd., through whom the assessee had transacted in the shares of M/s. Buniyad Chemicals Ltd. Therefore, the Assessing Officer came to conclude that the entire transaction i.e. purchase and sale of shares of M/s. Buniyad Chemicals was part of an accommodation business carried out by Mr. Mukesh Choksi and that the assessee routed her unaccounted money through the guise of capital gains. 6.1 The aforesaid conclusion of the Assessing Officer is entirely based on the result of the investigations carried out in the case of Mr. Mukesh Choksi. Similar situation came up before the Tribunal in the case of Shri Ravindra Kumar Toshniwal vide ITA No.5302/Mum/2008 for assessment year 2005-06, wherein also the sale and purchase of shares undertaken in M/s. Buniyad Chemicals was held to be a bogus transaction. The relevant discussion in the order of the Tribunal dated 24/02/2010(supra) reveals that the arguments set up by the Assessing Officer were similar to those which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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