Case Law Details
Lower authorities had placed heavy reliance on the statement of Sh. Mukesh Choksi (supra), wherein the latter had admitted that the Mahasasgar Securities P. Ltd. and Alliance Intermediaries & Network P. Ltd. were floated by him and were used as facilitator in furtherance of his business of providing accommodation entries. We though are persuaded to be in agreement with the observations of the lower authorities, that in the backdrop of the admission made by Sh. Mukesh Chokshi (supra) in his statement recorded u/s 131, there can be no doubt as regards the state of affairs of his business, but then this leads us to the issue that as to whether such a stand alone statement of the aforesaid person could be used for drawing of adverse inferences as regards the genuineness and veracity of the share transactions carried out by the assessee through him. We are of the considered view that as the name of the assessee was figuring in the list of the persons who had transacted share transactions through the aforesaid companies, viz. Mahasasgar Securities P. Ltd. and Alliance Intermediaries & Network P. Ltd., therefore, in the backdrop of the fact that the said respective companies were found to be carrying on the business of providing accommodation entries by the department, therefore the said facts would undoubtedly suffice and be a clinching basis for the A.O to form a bonafide ‘belief’ that the assessee being a beneficiary, too would have fudged the transactions, therein vesting with him the necessary jurisdiction to initiate reassessment proceedings in the hands of the assessee u/s 147 of the ‘Act’. We however are unable to persuade ourselves to subscribe to the view that such information arrived at on the basis of the stand alone statement of the aforesaid person, viz. Sh. Mukesh Chokshi (supra), falling short of any corroborative evidence would however justify drawing of adverse inferences as regards the genuineness of the share transactions in the hands of the assessee. We though are also not oblivious of the settled position of law, as per which a very heavy onus is cast upon the assessee to substantiate the LTCG on sale of shares, as projected by her in the return of income for the year under consideration. Thus to be brief and explicit, though the reopening of the case of the assessee in the backdrop of the aforesaid factual matrix cannot be faulted with, however such stand alone information, i.e the statement of Sh. Mukesh Chokshi (supra), cannot be allowed to form the sole basis for dislodging the claim of the assessee in respect of the LTCG reflected by her in the return of income for the year under consideration. We would not hesitate to observe that the lower authorities which have hushed through the facts to arrive at a conclusion on the basis of principle of preponderance of human probability, had however absolutely failed to appreciate that the said principle could have been validly applied only on the basis of a considerate view as regards the facts of the case in totality, and not merely on the basis of the stand alone statement of the aforesaid third party, viz. Sh. Mukesh Choksi.
Full Text of the ITAT Order is as follows:-
The present appeals filed by the aforementioned assessees are directed against the respective orders passed by the CIT(A)-30, Mumbai, dated 10.12.2014, 27.02.2015 and 27.02.2015, respectively, which in itself are directed against the orders passed by the A.O u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (for short ‘Act’) for A.Y. 2006- 07. Since, the issues raised in these appeals are identical, therefore, for the sake of convenience they are clubbed and disposed of by way of a consolidated order. We herein first take up the appeal marked as ITA No. 1957/Mum/2015, wherein the assessee assailing the order of the CIT(A) had raised the following grounds of appeal:-
“Being aggrieved of order passed by the Commissioner of Income Tax (Appea1s) 30, Mumbai (hereafter referred as ‘the learned CIT(A)’), appellant prefers this appeal on one or more of the following ground/s which are independent and without prejudice to each other.
(1) On the facts and in law, the learned CIT (A) erred in confirming the addition of Long Term Capital Gains of Rs. 9,36,164/- earned from sale of shares of Talent Info ways Ltd through Alliance Intermediaries & Network Pvt. Ltd as unexplained cash credit u/s68 on the basis of statement of Shri Mukesh Chokshi without appreciating the fact that the delivery of shares were given from the demat account of appellant and the sale proceeds were realized by account payee cheque. Please become a Premium member. If you are already a Premium member, login here to access the full content.
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