TaxTMI 
TaxTMI 
2020 (5) TMI 489
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....epting the opening stock out of which the same shares have been sold out. 3. That on the facts and circumstances of the case the learned AO and Cit (A) erred in law and on facts wherein AO arbitrarily made re additions of Rs. 9,45,000/- for the income already declared in Profit and Loss account on account of sale of shares of Ravel Metals pvt ltd and that too after accepting the opening stock out of which the same shares have been sold out. 4. That on the fact and circumstances of the case the learned AO and CIT(A) erred in law and on facts wherein without rejecting of books of account he cannot dispute the sale and purchase transaction already booked in profit and loss account. 5. That on the fact and circumstances of the case the learned AO and CIT (A) erred in law and on facts wherein ought to give adjustment of the items from the income already declared in profit and loss account before repeatedly adding the same u/s 68 which is just double taxation. 6. That on the fact and circumstances of the case the learned AO and CIT (A) erred in law and on facts wherein at one hand accepting the closing stock of immediate last year (opening stock of cur....
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....rred in law and on facts wherein the learned AO at one hand is helding that the same shares have been already sold out in preceding years then he was duty bound to establish in which year such shares have been sold out before alleging that the same shares has not been sold out in current year. Only on the basis of doubts no additions can be sustained. 13 That the learned AO and CIT (A) erred in law and on fact wherein they both failed to consider that any sum which is not merely a accounting credit but also declared as income 3nnot come into the purview of section 68, in fact only those sums can be considered as come u/s 68 which has been credited in the books but not offered as income,and in the present case the sum added by the learned AO in the garb of section 68 is not mere credit but a credit entry which has also been offered for taxation as income. Hence no double taxation is allowed under the law and addition deserves to be deleted. 14. That without prejudice to the above mentioned grounds if the view of the learned AO is taken correct that the shares have been sold in the previous years but failed to prove on record that any sum has been received from so c....
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....rically held that mere book entry without actual receipt of money cannot be covered under the definition of section 68 of IT Act. Reliance is placed on the Hon'ble Supreme Court finding in the case of H.H. Sri Rama Verma vs CIT 1991 187 ITR 308 SC, 1991 Supp (1) SCC 209 wherein it has been held that " The use of the expression "any sums paid" contemplates payment of an amount of money. One of the dictionary meanings of the expression "sum" means any indefinite amount of money. The context in which the expression "sums paid by the assessee" has been used makes the legislative intent clear that it refers to the amount of money paid by the assessee as donation." 2. That on the facts and circumstances of the case that transaction of credit purchase by the debtor resulting in a payable could not be equated with a credit entry of a financial transaction involving receipt of money so there is no scope of applicability of Section 68 of the IT Act. Reliance is placed on Decision of the Special Bench of this Tribunal in the case of Manoj Agarwal Vs DCIT reported as 113 ITD 377 wherein the Tribunal had explained the difference between the receipt of any sum for the purpose o....
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.... actual exchange of money in terms of cash in bank account. 6. The learned AO and CIT (A) erred in law and on facts wherein the word 'any sum' employed in Section 68.cannot be extended to include any book entry, notional adjustment, payment in kind etc. This legal position is upheld by the Hon'ble ITAT in the matter of M/S Abhijeet Enterprise Ltd.,... vs Ito, Ward 2(2), Kolkata in ITA No.308/KOL/2017. 7. That the learned AO and CIT(A) erred in law wherein without prejudice to the contention and grounds raised herein above the AO as well as CIT(A) omitted the fact then when he is challenging that the debtor does not got the goods in such situation the debtor will not pay off the dues as shown due towards him and n given situation as per the books of accounts the assessee is entitled to claim the balance of this debtor as a trading loss u/s 28 of the act, because the learned AO nowhere challenged the books of accounts and the balance sheet and the balances reflected therein which is tern be available for set off against the alleged income from other sources u/s 68 of the Act." 4. Brief facts of the case shows that assessee is a company who filed its retur....
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.... it and the value of those shares, as they were not commanding any price. He therefore held that there is no justification of receipt of sale consideration of shares of M/s Rawal metals private limited from M/s Thirst plantations private limited. Therefore the AO issued notice under section 142 (1) on 15/11/2016 asking assessee about the justification of those shares sold. The assessee furnished reply on 29/11/2016 stating that 1 lakh shares of scholar steals private limited and Rawal metals private limited were lying in the stock in trade of the company since long ago. However, the above shares have been lent to thirst Plantation private limited in 2006 along with the blank transfer deeds as security deposit to fulfill certain business transaction at that time in 2006. However when said shares were not returned by the first plantations private limited for a long time and they expressed their inability to return those shares, which was not returned and in the circumstances it is not in knowledge of the above company how shares were got transferred. The assessee also submitted that they asked the thirst Plantation private limited to pay off their amount in lieu of l share which w....
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....fore, neither adjournment application is received nor anybody appeared on behalf of the assessee. There is a paper book already filed by assessee on record. In view of this, we proceed to decide the issue on merits of the case as per information available on record. 6. The learned departmental representative vehemently supported the orders of the lower authorities and submitted that assessee did not have any shares in its possession. The entries of the sale of those shares to thirst plantations private limited is a bogus entry. He referred the order of the assessment and submitted that AO has categorically proved that assessee was neither a shareholder of these company nor existing any asset was available with the assessee. With respect to the applicability of the provisions of section 68 of the income tax act, he submitted that the sum is credited in the account of the assessee as sales consideration by debiting in the name of thirst plantations private limited. Therefore, section 68 is applied on share sale transaction as sum is credited on sale of shares. He further submitted that there is no double addition as claimed by the assessee because there is no profit in the profit ....
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....he transaction. Therefore, he confirmed the addition. Further, on our analysis of the transactions entered into by the assessee it clearly shows that assessee has shown shares of Rs. 1005000 of scholars Steels private limited on 11/4/2013 at the cost price. The shareholder list of that company does not show the name of the appellant as a shareholder but it shows the name of the family members of khanna group as shareholder of that company. No where the Thirst Plantation limited is shown as shareholder. Therefore if the assessee has handed over the blank transfer forms to Thirst Plantation pvt Ltd, its name would have entered the shareholder list of that company. That is also not shown. There is no information available on record that how assessee got into touch with the scholars Steels private limited at the time of making the investment. Looking at the story made by the assessee of lending the shares of scholars steels Ltd to thirst plantations private limited is totally unbelievable. The reason for the same is that scholar steel private limited is a private limited company. It shares if lent to somebody does not have any value. It is also not shown that even Thirst Plantation ....