TaxTMI 
TaxTMI 
TaxTMI 
2020 (10) TMI 744
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....tiny proceedings. The A.O. had clearly established that the audited balance sheet was not in coherence with any of the later submission made by the assessee. In view of the above Ld. CIT(A) has not completely appreciated the facts of the case. 2. Brief facts of the case are as follows. The assessee is a Private Limited company. During the assessment year 2013-14, assessee was engaged in the business of software development and providing service and sales of products through end to end business transaction. The assessee company conducted its business operation through a website with the domain name www.urbantouch.com and under the brand name 'Urban Touch'. 3. For the assessment year 2013-14, the return of income was filed by the assessee on 28.9.2013, declaring a loss of Rs. 10,79,43,952/-. The return of income was selected for scrutiny and assessment order u/s 143(3) of the Income-tax Act,1961 ['the Act' for short] was completed on 31.03.2016 making an addition of Rs. 152,31,66,000/- as undisclosed income on sale of Urban Touch under the head 'Capital Gains'. The gist of assessment order passed u/s 143(3) of the Income-tax Act,1961 ['the Act' for short] are as f....
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....;. The appellant company received funding in two rounds in the form of Compulsorily Convertible Preference Shares ('COPS') and equity shares totaling to INR 203,492,330 during FY 2010-11 and FY 2011-12.0n August 9, 2012, the shares of the Company were transferred by its shareholders i.e., Tiger Global, Accel India, Mr. Sachin Bansal, Mr. Binny Bansal and Mr. Mukesh Bansal to Gold square Sales India Private Limited, another company incorporated in India engaged in a similar line of business. 6.1 During the appellate proceedings the appellant submitted that neither the Appellant nor the investors have received the said amount of. USD 30 million. The amount has been reported in the news articles relied upon by the Assessing Officer without carrying out adequate due diligence and without being ratified by the Appellant or the investors. Further submitted that while news articles may provide information to the general public at large, the same cannot at any cost be relied upon for the purposes of determining the taxable income or the tax to be paid by an assessee. The appellant placed reliance on the judgement of the Hon'ble Supreme Court of India in the case of Laxmi Raj....
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....not able to establish the credibility of his financials submitted before him and therefore the Assessing Officer had to consider the information reported in the public domain as more authentic. Further seen from the extract of the information given by the EconornicTimes,Indiatimes.com dated 28/08/2012 that Fashion and You has acquired online fashion and beauty retailer Urban Touch and Fashion and You paid USD 30 million (Rs. 167. crores) in cash and stock for acquisition, said a person with direct knowledge of the transaction. However, the, Assessing Officer has neither enquired into nor ascertained from the news paper the veracity of the information given by them, He has simply relied on such news paper item stating that in view of the concealment of material facts relevant for both disclosure as per IT Act and the Accounting Standards as well as during the course of assessment proceedings the undersigned has no other but to consider the information reported in the public domain as more authentic. In view of the facts as discussed above and also the judgement rendered by the Hon'ble Supreme Court of India in the case of Laxmi Raj Shetty and Anr vs. State Of Tamil Nadu that it ....
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....Goldsquare Sales India Private Limited ('Goldsquare' or 'the Buyer'), another company incorporated in India engaged in a similar line of business as the assessee under the domain name www.fashionandyou.com for a total sale consideration of INR 12,23,35,205/-. The breakup of the sale consideration received by the shareholders pursuant to the transfer are as follows: Name of seller Number of shares sold (by way of equity and CCPS) Sale consideration (INR) Tiger * 1,000 Equity shares * 74,000 series A preference Shares * 25,000 Series B Preference Shares 8,49,82,750 Accel * 1,000 Equity Shares * 36,500 Series A Preference Shares * 8,333 Series B Preference Shares 3,50,17,255 Mr. Sachin Bansal * 800 Equity shares 7,78,400 Mr. Binny Bansal * 800 Equity shares 7,78,400 Mr. Mukesh Bansal * 800 Equity shares 7,78,400 Total 12,23,35,205 8. A copy of declaration filed regarding transfer of shares from non-resident to resident in Form FC-TRS evidencing the transfer of shares from Tiger and Accel to Goldsquare is on record (page Nos. 171 to 178 of the Paper book filed). Subsequent to the transfer of shares, the business of assessee was consolidated und....
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....res held by them. However, the same has been misunderstood by the A.O. and an adjustment to that effect has been made in the subject assessment order. It would also be pertinent to note that the copy of the article which was relied upon by the A.O. was not provided to the assessee during the course of assessment proceedings. Accordingly, the information contained in the news article was not ratified by the assessee. In this connection, we place reliance on the judgement of the Hon'ble Supreme Court of India in the case of Laxmi Raj Shetty and Anr Vs. State of Tamil Nadu (1988 AIR 1274), which held as follows: "Judicial notice cannot be taken of the facts stated in a news item being in the nature of hearsay secondary evidences, unless proved by evidence aliunde. A report in a newspaper is only hearsay evidence. A newspaper is not one of the documents referred to in s. 78(2) of the Evidence Act, by which an allegation of fact can be proved. The presumption of genuineness attached under s. 81 of the Evidence Act to a newspaper report cannot be treated as proof of facts reported therein. It is now well settled that a statement of fact contained in a newspaper is merely hearsay and, t....