TaxTMI 
TaxTMI 
2020 (10) TMI 744
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....ial statements and submissions made by assessee during scrutiny 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) o....
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....ess operations through a website with the domain name of www.urbantouch.com and under the brand name 'Urban Touch'. 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....
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....t out the facts and defects in the auditor's financials and given a finding that the AR was not able to furnish any records or documents in support of his submission nor he was 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 vi....
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....hek Goyal • 100,000 Equity shares 1,00,000 Total 20,35,92,330 7. On August 9, 2012, the shares of the assessee company were transferred by its shareholders i.e., Tiger, Accel, Mr. Sachin Bansal, Mr. Binny Bansal and Mr. Mukesh Bansal (hereinafter collectively referred to as 'angel investors') to 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 ....
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....omain name was sold by the assessee in March 2013. The information disseminated through the media is devoid of facts and may not be technically correct. Further, such news articles are not authored by technical/field experts so as to ensure that nuances of the transaction are reported correctly. In the instant case as well, the article printed may have been to provide information with respect to the fact that the shareholders of the assessee are selling the shares 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 ....