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TMI Blog2010 (10) TMI 1208X X X X Extracts X X X X X X X X Extracts X X X X ..... d, Andheri (East), Mumbai. The assessee had interest in the companies M/s. Unique Aromatics P. Ltd. and M/s. Specialty Food Ingredients P. Ltd. the business of these concerns is manufacturing and sale of proprietary items being food flavours made from combination of spices, etc. The assessee was also carrying on business in the capacity of M/s. Jayant B. Patel (HUF). A search and seizer action under section 132 of the Act was carried out in assessee s case and the persons connected with him on 10th January 2007. 3. In response to the notice under section 153A of the Act, the assessee filed its return of income both in individual capacity as well as in the capacity of HUF for all the assessment years under consideration. Since the additions made in all the assessment years are common, therefore, we, for the sake of convenience, refer to the figures from the assessment order for assessment year 2001 02, in the case of Jayant B. Patel and also in the case of M/s. Jayant B. Patel (HUF). 4. The assessee, in its capacity as Individual , filed return of income declaring total income of ₹ 13,57,746 on 19th May 2008. In his computation of income, the assessee had shown income u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17,57,746 5. The assessee, in his capacity as HUF , filed return of income declaring total income of ₹ 19,49,171 under the head Income From Business or Profession, Income From Other Sources and Income From Capital Gains , as under: Business Income Net Profit as per P L A/c 5,33,157 Add: Declared Profit 9,45,000 14,78,157 Long Term Capital Gain as per shares Sale Price 4,86,110 Less: Without Index Cost 30,000 4,56,110 4,61,014 Income From Other Sources Interest On Bank FD 11,828 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Y. Amount of LONG TERM CAPITAL GAIN Gross sale of shares being amount cr. In the books 1. Jayant B. Patel ATN Intl. Ltd. Abhishek Fin. Inv. Corp. Rushabh Inv. 22000 2001 02 916204 970104 2. Jayant B. Patel (HUF) Sawaca Communi-cation Ltd. do HMV Consul tancy 8000 2001 02 456965 484965 3. Cheryl J. Patel ATN Intl. Ltd. do HMV Consul tancy 8700 2001 02 364442 386192 4. TOTAL 1737611 841261 TABLE C S.No. Assessee Scrip Purchase Broker Shri Narendra R. Shah Sale Broke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bay Stock Exchange and the reply received form BSE has been reproduced in para 12 of his order. On the basis of this enquiry, he held that the purchase and sale of shares was bogus. He further observed that for these transactions, a sum equivalent to 5% of the gross amount was payable for the services obtained. He, accordingly, held that the assessee, on the date when he supposedly earned long term capital gain, was in possession of unexplained money to the extent of suppressed gross sale of shares amounting to ₹ 19,39,063, which were as follows. S.No. Scrip A.Y. Bogus Long Term Capital Gain Gross sale of subject share, being amount cr. In the bank a/c 5% fee et. Paid for bogus LTCG 1. ATN Intl Ltd. 2001 02 9,16,204 9,70,104 48,505 2. Planter Poly Ltd. 2001 02 9,08,959 9,68,959 48,408 3. Triplex Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er wrote two letters dated 14th January and 10th February 1955 to the Manager of the Bank making enquiries about the remittance. Reliance was placed on these letters for making additions. The Hon'ble Supreme Court in Krishnachand Chellaram (supra), has held as under: . The statements of the manager in those two letters were based on hearsay, as, in the absence of evidence, it could not be taken that he must have been in charge of the Madras office on October 16, 1946, so as to have personal knowledge. The department ought to have called upon the manager to produce the documents and papers on the basis of which he made the statements and confronted the assessee with those documents and papers. It was true that proceedings under the income tax law were not governed by the strict rules of evidence, and therefore, it might be said that even without calling the manager of the bank in evidence to prove the letter dated February 18, 1955, it could be taken into account as evidence. But before the income tax authorities could rely upon it, they were bound to produce it before the assessee so that the assessee could controvert the statements contained in it by asking for an op ..... X X X X Extracts X X X X X X X X Extracts X X X X
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