TaxTMI 
TaxTMI 
2015 (10) TMI 2367
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....risdiction as well as on merits. 3. Briefly the facts are, assessee a company is engaged in the business of trading in steel products. For the year under consideration, assessee filed its return of income on 30/09/2009 declaring total loss of Rs. 5,82,41,485. Assessee's case was selected for scrutiny and AO after verifying the books of account as well as other details and making necessary enquiry completed the assessment u/s 143(3) of the Act vide order dated 20/10/2011, accepting the loss returned by assessee. 4. Subsequently, Ld. CIT examined the assessment records and noticed that assessee is in receipt of long term capital loss of Rs. 2,60,07,607 on account of sale of listed securities. Ld. CIT observed that the listed securities ....
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....ssee. Ld. AR submitted that ld. CIT ought to have appreciated the fact that transfer of equity shares are not from the recognized stock exchange, but, the assessee made agreement with the other company to sell the shares. As per the terms of agreement, it had sold the shares. The relevant agreements were already in the files of AO. The ld. CIT presumed that Security Transaction Tax (STT) was paid by the assessee whereas it was not. In fact, there was no STT involved as the transactions were made outside the stock exchange. The respective agreements were produced before the AO and were available as part of the assessment records. He also contended that it is merely an expression of opinion by the ld. CIT without verification of records after....
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....d (b) such transaction is chargeable to securities transaction tax under that Chapter : Provided that the income by way of long-term capital gain of a company shall be taken into account in computing the book profit and income-tax payable under section 115JB : 73[74[Provided further that the provisions of this clause shall not apply in respect of any income arising from transfer of units of a business trust which were acquired in consideration of a transfer referred to in clause (xvii) of section 47.]] Explanation.-For the purposes of this clause, "equity oriented fund" means a fund- (i) where the investible funds are invested by way of equity shares in domestic companies to the extent of more than sixty-five per ....
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....igh Court in case of Spectra Shares and Scrips Pvt. Ltd vs. CIT (354 ITR 35) while examining the CIT's power vi] s 263 of the Act analysed number of decisions of the Hon'ble Supreme Court as well as different High Courts and culled out the principles for exercise of jurisdiction ix] s 263 of the Act as under: "31. From the above decisions, the following principles as to exercise of jurisdiction by the Commissioner u/s.263 of the Act can be culled out: (a) The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent - if the order of the Income Tax Officer is erroneou....
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....isallowance, deduction, etc., it is incumbent upon the Commissioner not to exercise his suo motu revisional powers unless supported by adequate reasons for doing so; that if a query is raised during the course of the scrutiny by the Assessing Officer, which was answered to the satisfaction of the Assessing Officer, but neither the query nor the answer were reflected in the assessment order, this would not by itself lead to the conclusion that the order of the Assessing Officer called for interference and revision. (e) The Commissioner cannot initiate proceedings with a view to start fishing and roving inquiries in matters or orders which are already concluded; that the department cannot be permitted to begin fresh litigation because of n....
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....ubsequent to the order of assessment". 8.3. Thus, while applying the ratio of the above jurisdictional High Court and the provisions of section 10(38) to the facts of the case on hand, we observe the below facts: i) The application of section 10(38) will warrant, only when the transaction had suffered STT. In the present case, the contention of assessee has been that transaction has not suffered any STT, we observe that ld. CIT ought to have enquired with the AO since all the material facts are very much available on assessment records. ii) We have carefully considered the contention of ld. DR that the listed shares have to be transacted only through stock exchange. It is the businessman who will decide the mode of transaction, how....