TaxTMI 
TaxTMI 
2019 (7) TMI 936
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....the Assessing Officer at Rs. 1,28,40,560/- after making two additions of Rs. 1,05,36,000/- and Rs. 15,00,000/- on account of expenditure on purchase of shares and Keyman Insurance respectively. Against the said order passed by the Assessing Officer under section 143(3), an appeal was preferred by the assessee before the ld. CIT(Appeals), who vide his appellate order dated 06.07.2012 deleted both the additions made by the Assessing Officer on account of disallowance of expenditure on purchase of shares and Keyman Insurance. Against the said order of the ld. CIT(Appeals), an appeal was preferred by the assessee before the Tribunal. Meanwhile a search and seizure action was conducted in the business premises of the assessee-company on 18.09.2012, which concluded on 19.09.2012. Pursuant to the said action, notice under section 153A was issued by the Assessing Officer on 27.11.2013, in response to which the return of income was filed by the assessee on 28.01.2014 declaring the same income of Rs. 8,04,560/- as declared in the return of income originally filed. Thereafter assessment was completed by the Assessing Officer under section 153A /143(3) of the Act vide an order dated 30.03.2....
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..... 5. Grounds raised by the assessee in its Cross Objection read as under:- "(1) That on the fact and circumstances in the case of assessee for the same assessment year similar additions was made in regular assessment u/s 143(3) on 30/03/2015 by Assessing Officer 9(1) Kolkata, which was deleted and decided in favour of assessee by CIT(A)(VIII) Kolkata, vide order dated 05/07/2012. 2. That on the fact and circumstances of the case the appeal filed by the Assessing Officer 9(1) Kolkata, against the order of CIT(A)(VIII) before Hon'ble ITAT was heard and decided of under ITAT No.1429/Ko1/2012, dated 03/08/2018. Wherein the Hon'ble ITAT 'C' Bench Kolkata, and uphold the order of CIT(A)(VIII) and dismissed the Revenue appeal against the order dated 30.03.2015 u/s 143(3). 3. That on the facts and circumstances of the case the addition of Rs. 15,02,247/- on account of Key Insurance Premium and expenditure in relation to purchase of shares amounting to Rs. 1,05,36,000/- are covered by the order of Hon'ble ITAT 'C' Bench Kolkata, and uphold the order of Ld.CIT(A) and grounds raised for addition made by revenue was dismissed. ....
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....ssee-company are not actively engaged in the day-to-day affairs. At this juncture, we would like to reproduce the meaning of KIP as per Explanation-1 to Section 10(10D) of the Act which reads as under: - "[Explanation 1] -For the purposes of this clause, "Keyman insurance policy" means a life insurance policy taken by a person on the life of another person who is or was the employee of the firstmentioned person or is or was connected in any manner whatsoever with the business of the firstmentioned person [and includes such policy which has been assigned to a person, at an time during the term of the policy, with or without any consideration];] On a bare reading, we find that said Section requires the connection between the assessee and person to be covered under insurance. It is not necessary that he should be aware of all the affairs of business of assessee. In view of above, we find no reason to interfere in the order of Ld. CIT(A). We uphold accordingly. Ground raised by Revenue is dismissed". From page nos. 16 to19 "6. We have heard rival parties and perused the materials available on record. Ld. DR filed written submission which is placed on....
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....filed before the assessing officer and the same is not disputed. The assessing officer has raised the issue that BIFC did not have the adequate number of shares in their stock as on the date sale. However, the facts are contrary to the findings of the assessing officer, as would appear from the copy of account enclosed herewith, that the said BFIC had the required number of shares in their stock and in response to the query of the assessing officer, an explanation was filed vide letter dated 3011- 2011 (copy is enclosed in assessee's paper book). Further, the assessing officer also made enquiry under section 133(6) from the seller BIFC, who also replied and admitted the factum of the sale of share. Therefore simply because the shares amount transferred to the Demat account of the assessee or that the payments were made in the subsequent year, the transaction cannot be taken to be not genuine. The assessing officer noted that the transaction is bogus and further the purchase was inflated. However, there is no basis for the same but it is only the presumptions of the assessing officer. Moreover, as informed during the course of this appeal hearing before us by learned Co....
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....985) 154 ITR 148/22 Taxman 11, held that such loss cannot be allowed. The assessing officer observed that whenever sales were made to other entities, they were not followed by cheque receipts. Similarly when purchases were made from other entities, they were also not followed by cheque payments. He concluded that the assessee carried off market transactions by simple purchase bills or sales bills ignoring market rates. This was done to avoid tax. " And finally held as under: "8. Additionally, we also note that necessary entries were made in the account books of both sides, i.e. purchaser and seller and delivery receipts were also passed demonstrating contemporaneous sale and purchase of the shares. It is not even the ease of the Revenue that such off market transactions were not permissible. When we find that off market transactions were permitted in law, that there was no evidence to suggest that artificially they were sold at rates lower than the prevailing market rates and we further find that the assessing officer could not bring on record any material to show that the transactions were shown to be deliberately back-dated, the findings of the Commissioner (App....
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....hat the off market transactions cannot be accepted under SCRA is factual incorrect relating in the aforesaid appellate order. We also find that the exception has been provided in the SCRA Act under section 14(2) of the SCRA Act as discussed above. Accordingly we uphold the order of Ld. CIT(A) and ground raised by Revenue is dismissed". 7. Keeping in view the decision of the Tribunal as rendered above on the similar issues, the ld. CIT(Appeals) deleted the similar additions made by the Assessing Officer in the assessment completed under section 153A/143(3) to maintain judicial consistency. At the time of hearing before the Tribunal, the ld. Counsel for the assessee has contended that both the issues involved in this appeal of the Revenue are squarely covered in favour of the assessee by the order of the Tribunal dated 03.08.2016 passed in ITA No 1429/KOL/2012, wherein the same additions made by the Assessing Officer were held to be not sustainable by the Tribunal by passing a well discussed and well reasoned order. The ld. D.R. has also not disputed this position. He, however, has contended that the aspect of colourable device adopted by the assessee to claim the expenditure on p....