TaxTMI 
TaxTMI 
2020 (1) TMI 499
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....f Paper Book in light of Rule 18(6) of ITAT Rules and have also perused the judicial decisions relied upon by both the sides. 4. Facts emanating from the assessment order show that the assessee E-filed his return of income on 30.08.2015 declaring an income of Rs. 44,40,350/-. The return was processed u/s 143(1) of the Act. Subsequently, return was selected for scrutiny assessment and, accordingly, statutory notices were issued and served upon the assessee. 5. The main reason for selecting the return for complete scrutiny was in respect of the alleged suspicious sale transactions in shares of Lifeline Drugs and Pharma Ltd [LDPL], which generated exempted long term capital gains to the assessee. 6. The assessee purchased 5000 shares of Rs. 100 each of LDPL. The assessee had purchased 2 lakh equity shares of Kadam Construction Limited through a registered broker M/s Globe Capital, which were subsequently sold @ Rs. 22 per share to M/s Salkat Tradelink Pvt Ltd for a total consideration of Rs. 44 lakhs. Purchase consideration of Rs. 5 lakhs, being 5000 shares of LDPL @ Rs. 100/-, was adjusted from the sale consideration of shares of Kadam Construction Ltd. Subsequently, 5000 share of....
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....upon him by provisions of section 68 of the Act or not is purely a question of facts. On this premise, we will now examine and explain the facts. 14. The undisputed fact is that the assessee is a habitual investor. In F.Y. 2011-12, the assessee had opening investment of Rs. 29,82,55,788/- on which in that year, the assessee had incurred a short term capital loss of Rs. 1,37,84,938/- and long term capital gain of Rs. 39,92,266/-. The closing value of the investment was Rs. 41,69,34,260/-. These facts are available at pages 52 to 54 of the paper book. In F.Y. 2011-12, shares of LDPL can be seen. 15. In F.Y. 2012-13, the assessee had opening investment of Rs. 41,69,34,260/- and in this year, the assessee incurred short term capital loss of Rs. 60,76,121/- and long term capital gain of Rs. 24,61,44,677/-. The closing value of investment was Rs. 44,11,15,960/-. These facts are available at pages 55 to 57 of the paper book. 16. In F.Y. 2013-14, the opening value investment was Rs. 44,11,15,960/- and in this year, the assessee incurred short term capital loss of Rs. 2,78,25,386/- and long term capital gain of Rs. 5,13,30,276/-. The closing value of investment was Rs. 31,35,63,539/-. Th....
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..... The Assessing Officer simply rubbished all the documentary evidences by referring to the general observations and modus operandi of the entry operators and further supporting his observations by report of the Investigation Wing. 23. It would not be out of place to mention here that LDPL, now known as Arihant Multi Commercial Ltd, is not a paper company nor a shell company. In F.Y. 2013-14, the Revenue from operations were at Rs. 40,85,02,313/- and total assets were at Rs. 32,79,07,684/- which included investment, trade receivables, cash and cash equivalent, short term loans and advances and tangible assets. The share capital and reserves and surplus were at Rs. 3,62,40,000/- and Rs. 17,65,16,912/- respectively. Trade payables were at Rs. 10,80,74,165/-. 24. These financials go to show that LDPL is not a shell company. SEBI has suspended trading in shares of LDPL w.e.f 28.08.2015 whereas the assessee has sold shares from May 2014 to December 2014, many months before suspension of the scrip. It is not the case of the Assessing Officer, nor there is any evidence on record to show that SEBI has declared all transactions done in scrip of LDPL prior to the suspension as null and void....
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.... by the AO who has not provided the copy of such statements to the appellant, thus denying opportunity of cross examination to the appellant, who has prima facie discharged the initial burden of substantiating the purchases through various documentation including purchase bills, transportation bills, confirmed copy of accounts and the fact of payment through cheques, & VAT Registration of the sellers & their Income Tax Return. In view of the above discussion in totality, the purchases made by the appellant from M/s Padmesh Realtors Pvt. Ltd. is found to be acceptable and the consequent disallowance resulting in addition to income made for Rs. 19,39,60,866/-, is directed to be deleted." 4. The ITAT by its judgment dated 16th May, 2014 relied on the self-same reasoning and dismissed the appeal of the revenue. Likewise, the High Court by the impugned judgment dated 5 th July, 2017, affirmed the judgments of the CIT and ITAT as concurrent factual findings, which have not been shown to be perverse and, therefore, dismissed the appeal stating that no substantial question of law arises from the impugned order of the ITAT. 5. In these circumstances, the Review Petitions are dismissed."....
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....al inference to be drawn from the reading of the investigation report and the statement of Mr. Mahesh Garg. To elevate the inference which can be drawn on the basis of reading of such material into judicial conclusions would be improper, more so when the assessee produced material. The least that the assessing officer ought to have done was to enquire into the matter by, if necessary, invoking his powers under Section 131 summoning the share applicants or directors. No effort was made in that regard. In the absence of any such finding that the material disclosed was untrustworthy or lacked credibility the assessing officer merely concluded on the basis of enquiry report, which collected certain facts and the statements of Mr. Mahesh Garg that the income sought to be added fell within the description of Section 68." 25. Considering the vortex of evidences, we are of the considered view that the assessee has successfully discharged the onus cast upon him by provisions of section 68 of the Act and as mentioned elsewhere, such discharge of onus is purely a question of fact and therefore, the judicial decisions relied upon by the ld. DR would do no good on the peculiar plethora of evi....