TaxTMI 
TaxTMI 
2010 (7) TMI 1213
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....icle expense and also claimed the depreciation thereon which was to the extent of Rs.2,25,68,670/-. The A.O. made disallowance at 10% of the total vehicle expenses as well as depreciation claimed by the assessee which was worked out to Rs.22,56,867/-. The assessee challenged the disallowance before the learned CIT(A) contended that assessee engaged in the diamond business which requires high safety for movement of goods and personnel. Visits of international customers who need proper escort and treatment also make it necessary for the assessee to maintain proper infrastructure. It was also contended that on entire vehicle expenses including depreciation the assessee has paid the 'Fringe Benefit Tax' (FBT). The assessee has also relied on the decision of Hon'ble Gujrat High Court in Sayaji Iron & Engineering Company (253 ITR 479). On principle the learned CIT(A) confirmed the order of the Assessing Officer but on quantum of disallowance, the learned CIT(A) reduced the disallowance. In respect of the depreciation the Ld. CIT(A) observed that the Assessing Officer had made 'honest mistake' by adopting the figure of depreciation as per books and not as claimed by the assessee in the in....
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....dition made u/s.69B of the Act of Rs.80,49,540/-. The Assessing Officer has stated that the assessee company in the financial year 2005-06 has purchased 17499 shares of Ocean Crown Diamond P. Ltd. having the nominal value of Rs.100 each at Rs.2500 per share. The Assessing Officer has also noted that the value of share of Ocean Crown Diamond P. Ltd. as on 31st March, 2006 was Rs.5407/- and the same value was worked out by considering the total Share Capital plus Reserves that was Rs.18,92,42,149/- which is divided by total shares i.e. 35000 of Rs.100/- each of nominal value. The assessee has contended before the Assessing Officer that assessee negotiated the price of the shares and after negotiation the price was fixed Rs.2500/- per share. But the Assessing Officer was not satisfied with the explanation of the assessee as he was of the opinion that assessee has not understated the price for purchasing the said share by Rs.2907/- per share. In his opinion, the provision of section 69B of the I.T. Act was applicable to the extent of difference in the value of the share and actual purchase price claimed to have been paid by the assessee which was Rs.2500/- per share. The Assessing Offi....
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....n D. Mahadevia (supra) and CWT vs. Mahadeo Jalan & Others (supra). 3.3.8.7. These Supreme Court judgments were available to the appellant while working out the valuation of the impugned shares at the time of making investment. No material or evidences were placed before me to prove the correctness of the valuation of the impugned unlisted shares at Rs.2500/- per share. Yet in utter disregard to the two Hon'ble Supreme Court judgments i.e. CGT vs. Smt. Kusumben D. Mahadevia (supra) and CWT vs. Mahadeo Jalan & Others (supra). The appellant disclosed investment at a reduced value of Rs.4,37,47,500/-. 3.3.8.8. The basis of valuation as adopted by the appellant was arbitrary and not in conformity with any authority. No valuation report was obtained from any Chartered Valuer in support of the arbitrary price of Rs.2500/- per share. On the other hand, the only valuation report now furnished before me certified the correct value at Rs.2960/- per unlisted share. 3.3.8.9. The circumstances as narrated by the appellant during course of appellant proceedings also indicate that the shares were acquired from his sister concern and from a related person. Therefore, the transaction is not fr....
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..../- each. The assessee company had held 50% shares, remaining 50% shares were held by one Mr. Ajay Mehta, who was working partner looking after day to day activities of the company and also key person of a company. Mr. Ajay Mehta expired in February, 2005. On his death his wife Smt. Sonal Mehta, sold 17499 shares to the appellant company at negotiated price of Rs.2500/- per share. He argues that merely on the basis of the valuation no addition can be made u/s.69B of the Act. He argues that only presumption regarding value of any amount not sufficient. He further argues that there is no dispute regarding the source which is one of the mandate of sec.69B nor there is evidence before the Assessing Officer to say that assessee has paid more price for acquiring the share than the price declared. The learned counsel relied on the decision of the Hon'ble Bombay High Court in the case of New Excelsior Pvt. Ltd-185 ITR 158 in support of the proposition that higher market value can not be reason for formation of a belief for re-opening the assessment He, therefore, pleaded that there is no justification to support the addition sustained by learned CIT(A) per quantum. The learned DR supported ....