TaxTMI 
TaxTMI 
2021 (10) TMI 114
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....in law, wrong on the facts and against the principles of natural justice. 2). That on the facts and in the circumstances of the case, the Ld. CIT-(A) erred in confirming the disallowances in the impugned assessment order framed u/s 153C of the act on the issues which has no nexus with the alleged material unearthed during the course of search operations and thereby making a de-novo assessment, which needs to be deleted. 3). That on the facts and in the circumstances of the case, the Ld. CIT-(A) has erred in law in confirming the disallowance of the Short Term Capital Loss on forfeiture of convertible share warrants amounting to Rs. 4,18,50,000/- which needs to be deleted. 3.1) That on the facts and circumstances o....
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....are warrants amounting to Rs. 4,18,50,000/-. 5. The facts giving rise to this ground are that a search and seizure operation u/s 132 of the Income Tax Act, 1961 (hereinafter 'the Act') was conducted at the Monnet Group including the assessee. During the course of search, certain documents belonging to the assessee was found and seized. The case of the assessee was centralized with DCIT, Central Cirlce-20, New Delhi. Thereafter, notice u/s 153C of the Act was issued. In response to the notice u/s 153C issued by the Assessing Officer, the Ld. AR of the assessee company vide letter dated 05.03.2013 challenged the validity of the notice, however, return of income for the year under appeal, was filed declaring income of Rs. 11,46,720/-. There....
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....nsaction entered with a malafide motive to evade tax which creates a Loss in one company without getting it taxed in another group company. It will be pertinent to mentioned here that addition on this issue has already been confirmed by the Ld. CIT-(A) in the same proup company namely, M/s Pavitra Commercials Ltd for the A.Y. 2009-10...." 4) a) In the case of the group company M/s Pavitra Commercials Ltd, for A.Y. 2009- 10, Hon'bie ITAT, Bench "F", New Delhi in ITA 5389/Del/2Q12 vide its order dated 10/12/2014, has allowed the short term capital loss on the forfeiture of share warrants. Hon'bie ITAT stated at para 7.3 as under: - "...7.3 After Hearing the rival contentions, we hold as follows. Hon'ble Delhi High C....
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....he Ld. counsel for the Revenue is also not tenable. In view of the foregoing reasons no substantial question of law arises for our consideration. The appeal is dismissed. " 7.4 Respectfully following the judgement of the Jurisdictional High Court, we allow the claim of the assesse. Ground no. 2(e) is allowed " Photocopy of the order of Hon'ble ITAT is enclosed at Pages No 3 to 9. b). The Income Tax Department, in the case of M/s Pavitra Commercials Ltd had filed an appeal with the Hon'ble Delhi High Court. The Hon'ble Delhi High Court in ITA No. 782/2015 vide its order dated 14/10/2015 had dismissed the appeal of the department. The Hon'ble Delhi High Court while dismissing the appeal at para 3 and 4 had stated as....
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....orders of the authorities below and submitted that the Assessing Officer in the assessment order at para 5D has recorded that the payment of 10% amount towards share warrant cannot be treated as creating a substantial right in the share when the major amount is yet to be paid. At the best it can be treated as advance towards acquisition of shares which are subjected to many conditions. He submitted that the Assessing Officer has distinguished the facts of the case in the CIT vs Chand Rattan Bagri 329 ITR 356. In rejoinder, the learned counsel for the assessee submitted that the observations of the Assessing Officer is misplaced. 10. We have heard the rival contention and perused the records. The Revenue has not controverted the fact that....
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....ished or destroyed. A share in a company is nothing but a share in the ownership of the company. While the right of the assessee to share in the ownership of the company BLB Ltd. Stands extinguished on account of the forfeiture, the company, with all its assets, continues to exist. The forfeiture only results in one less shareholder. It is not as if the asset in which a share was being claimed was also extinguished. Thus, the second point urged by the ld. counsel for the Revenue is also not tenable. In view of the foregoing reasons no substantial question of law arises for our consideration. The appeal is dismissed." 11. This order of the Tribunal was confirmed by the Hon'ble Delhi High Court in ITA No.782/2015 by observing as u....