Girish Shah, Mumbai vs Assessee
- CitationI.T.A. No.3141/Mum/2013
Ratio decidendi
The rule this decision rests on
Where the Revenue's rejection of an assessee's long-term capital gain and gift receipts rests on material implicating a third party, a finding by the Tribunal in a connected family member's appeal that the third party's statement did not implicate that family's transactions, and the Revenue's own stated circumstances of the case, may be applied to the present assessee where the facts and circumstances are identical; the same finding, affirmed by the High Court, binds the Tribunal's reasoning in the matter. Where a statement by a third party that implicates the assessee is absent, and no cogent corroborating material is shown against the assessee or family, the statement cannot be taken at face value to sustain an addition on account of bogus transactions; the claimed long-term capital gain is therefore to be accepted and the gross sale proceeds not assessed as income from other sources. Where the assessee has furnished all details of gift receipts before the first appellate authority and the facts are identical to those in the connected appeals already decided in the assessee's favour, the addition on account of gift receipts is to be deleted.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
BEFORE S/SHRI B.R.BASKARAN (AM) AND VIVEK VARMA (JM) सव ी बी.आर.बा करन, लेखा सद य एवं ववेक वमा , या यक सद य के सम
आयकर अपील सं./I.T.A. No.3141/Mum/2013 ( नधा रण वष / Assessment Year : 2005-06)
Mr.Girish Shah, बनाम/ The Jt. Commissioner of Income 59, Kika Street, Vs. Tax -(OSD), Gulalwadi, Circle-15(1), Mumbai-400004 Mumbai
(अपीलाथ /Appellant) .. ( यथ / Respondent)
आयकर अपील सं./I.T.A. No.3456/Mum/2013 ( नधा रण वष / Assessment Year : 2005-06)
The Astt. Commissioner of बनाम/ Mr.Girish L.Shah, Income Tax-15(1), Vs. 59, Kika Street, Room No.104, Gulalwadi, Matru Mandir, 1st floor, Mumbai-400004 Tardeo Rd., Mumbai-400007
(अपीलाथ /Appellant) .. ( यथ / Respondent)
थायी ले ख ा सं . /जीआइआर सं . /PAN/GIR No. :AACPS7752D
अपीलाथ ओर से / Appellant by Shri S C Tiwari and Ms.Priyanka Mane यथ क# ओर से/ Respondent by Shri Pavan Kumar Beerla
सन ु वाई क# तार'ख / Date of Hearing :12.2.2015 घोषणा क# तार'ख /Date of Pronouncement : 20.2.2015 2 ITA. No3141/Mum/2013 and ITA 3456/Mum/2013
आदे श / O R D E R
Per B.R.BASKARAN, Accountant Member:
These cross appeals are directed against the order dated 04-02- 2013 passed by Ld CIT(A)-26, Mumbai and they relate to the assessment year 2005-06. The assessee is aggrieved by the decision of Ld CIT(A) in confirming the addition of Rs.20.00 lakhs relating to the Gift receipts and the revenue is aggrieved by the decision of Ld CIT(A) in deleting assessment of gross receipts realized on sale of shares as Cash Credits.
2. The Ld A.R submitted that the assessee had declared Long Term Capital Gain on sale of shares and had also disclosed the receipt of gifts from close friend. However, the AO took the view that the assessee had taken only accommodation entries with regard to Long Term Capital Gains. Accordingly he rejected the claim of Long Term Capital Gains and assessed the gross sale receipts as Income of the assessee under the head Income from Other sources. Similarly he assessed the Gift receipts also as income of the assessee treating the same as unexplained, even though the assessee had discharged the burden in that regard.
3. The Ld A.R submitted that the AO had made identical additions in the case of assessee's mother named Smt. Manjulaben L Shah. The matters reached the ITAT and the Tribunal, vide its order dated 31.10.2014 passed in ITA No.3112/Mum/2014 relating to the assessment year 2005-06, has deleted both the additions. He further submitted that the AO had also made identical additions in the case of another family member named Shri Pinakin L Shah and the Tribunal deleted both the additions. He submitted that the order of the Tribunal, has since been confirmed by the Hon'ble Bombay High Court also. Accordingly he submitted that both the additions are covered by the decision of the Tribunal, referred above, and accordingly prayed for deletion of the same 3 ITA. No3141/Mum/2013 and ITA 3456/Mum/2013
by following the decision of the Tribunal passed in the case of Smt. Manjulaben L Shah.
4. On the contrary, the Ld D.R placed reliance on the written submissions filed before the bench. A perusal of the same would show that the revenue is strongly supporting the order of the assessing officer.
5. We have heard the rival contentions and perused the record. We notice that the assessments in the hands of the assessee as well in the hands of his mother named Smt. Manjulaben L Shah were completed on the basis of information obtained by the department during the course of search conducted on Mr. Mukesh Choksi. During the course of search, it was noticed that Shri Mukesh Chokshi had provided accommodation entries for bogus share transactions, inter alia, in respect of shares of M/s Talen Infoway Ltd. These assessee herein had also purchased and sold the shares of the above said company. Hence, the AO disbelieved the claim of Long term Capital gain and assessed the gross sale proceeds as income of the assessee under the head Income from other sources. The assessee had also received gifts from Shri Mukesh Choksi and Shri Maneklal Choksi. The AO also disbelieved the claim of receipt of gift and accordingly assessed the gift amounts also as income of the assessee under the head Income from other sources. The Ld CIT(A) accepted the genuineness of Long Term Capital gain declared by the assessee and accordingly deleted the assessment of Gross sale receipts as income of the assessee. However, he confirmed the rejection of claim of gift receipts and consequent assessment of the same as income of the assessee.
6. A perusal of the order passed by the Tribunal in the case of Smt. Manulaben L Shah would show that the Tribunal has recorded a finding that Shri Mukesh Choksi has not implicated the assessee therein or her 4 ITA. No3141/Mum/2013 and ITA 3456/Mum/2013
family. Following observations made by the Tribunal at page 17 of its order are relevant here:-
"....... The Ld CIT(A) merely relied upon the statement of Shri Mukesh Choksi, given earlier. Even if we rely on such a statement, which has been reproduced by the learned CIT(A) from pages 7 to 9 of the appellate order, then it can be seen that, nowhere the name of the assessee has surfaced nor any reference is made to assessee or her family, hence such a statement that he was engaged in providing accommodation entries to all, cannot be taken at face value, unless the same is corroborated by a cogent material qua the assessee."
The assessee herein is a family member of Smt. Manjulaben L Shah and we have noticed that the Co-ordinate bench has already given a finding that the name of Smt. Manjulaben L Shah or her family was not implicated by Shri Mukesh Choksi. The Tribunal has further noticed that Shri Mukesh Choksi has also given a letter to the AO to the effect that the transactions with the family of Shri Pinakin L Shah (another family member of Smt. Manjulaben L Shah) are genuine. We further notice that the Co-ordinate bench of Tribunal had also given relief from identical additions (both Capital gains and gift receipts) made in the hands of Shri Pinakin L Shah (ITA No.3030/Mum/2008 and ITA No.3453/Mum/2008, vide order dated 14-07-2009). The said order of the Tribunal has since been upheld by the Hon'ble Bombay High Court, vide its order dated 18-01-2012 passed in ITA No.3380 of 2010. The assessee has placed copies of the orders passed by the Tribunal as well as the High Court in the paper book.
7. In the case of Smt. Manulaben L Shah, the co-ordinate bench also taken note of the decision rendered by the Hon'ble Bombay High Court in the case of Shri Pinakin L Shah and has held that there cannot be a different finding in the case of the assessee to that has been given in Pinakin L Shah, which has since been confirmed by Hon'ble High Court.
5 ITA. No3141/Mum/2013 and ITA 3456/Mum/2013
8. In the instant case also, the facts and circumstances relating to the Long term Capital Gain and gift receipts are identical to that of Shri Manjulaben L Shah and Shri Pinakin L Shah. Hence, following the decisions rendered in the above said two cases, we uphold the order of Ld CIT(A) in respect of the Long term Capital gain declared by the assessee. We notice that the assessee has furnished all the details relating to the gift receipts before the Ld CIT(A). Hence, following the decisions rendered in the above said two cases, we set aside the order of Ld CIT(A) in respect of gift receipts and direct the AO to delete the addition relating to the same.
9. In the result, the appeal filed by the assessee is allowed and the appeal of the revenue is dismissed.
The above order was pronounced in the open court on 20th FEB, 2015.
घोषणा खल ु े यायालय म* +दनांकः 20th Feb, 2015 को क# गई ।
sd sd ( ववेक वमा / VIVEK VARMA) ( बी.आर.बा करन / B.R. BASKARAN) या यक सद य / JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER
मुंबई Mumbai: 20th Feb ,2015. व. न.स./ SRL , Sr. PS
आदे श क !त#ल$प अ%े$षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. आयकर आय3 ु त(अपील) / The CIT(A)- concerned
4. आयकर आय3 ु त / CIT concerned
5. वभागीय त न5ध, आयकर अपील'य अ5धकरण, मंब ु ई/ DR, ITAT, Mumbai concerned
6. गाड फाईल / Guard file.
आदे शानुसार/ BY ORDER,
true copy सहायक पंजीकार (Asstt. Registrar) आयकर अपील'य अ5धकरण, मुंबई /ITAT, Mumbai
This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.
Research this judgment with Miss Lucy
Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.
Try Miss Lucy free