TaxTMI 
TaxTMI 
2023 (3) TMI 772
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....is admitted. 3. The revenue has filed the following grounds of appeal:- "1. Whether on the facts and in the circumstances of the case, Ld. CIT(A) was justified in deleting the addition of Rs.5,61,00,000/- made by the Assessing Officer on account of sale of unquoted shares in the course of assessment in absence of identity, genuineness and creditworthiness of the purchaser/buyer companies. 2. Whether on the facts and in the circumstances of the case, Ld. CIT[A] was justified in deleting the addition of Rs. 5,61,00,000/- without taking into cognizance of the Remand Report sent by the Assessing Officer wherein it had been categorically stated regarding lack of genuineness and creditworthiness of the transactions in question. 3. Whether on the facts and in the circumstances of the case, Ld. CIT[A] was justified in deleting the addition of Rs.5,61,00,000/- whereas the Assessing Officer raised suspicion in the Remand Report regarding sources and sources of funds raised by the investing companies. That the Ld. CIT(A) had erred in holding that the sale of unquoted shares are not a Sham transactions even though this shares are illiquid assets and the assessee h....
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....most of the creditors replied and in few cases, the letters were duly served but reply not received. All the other details in order to explain the alleged sum were filed by the assessee, however, the ld. Assessing Officer was not satisfied and he concluded the assessment making addition u/s 68 of the Act of Rs.5,61,00,000/- and assessed the income of the assessee at Rs.5,60,98,160/-. 5. Aggrieved the assessee preferred appeal before the ld. CIT(A) and filed various other details to explain the amount received from loan creditors against sale of investment. The ld. CIT(A) called for a remand report and the same was received on 19/09/2019. Thereafter, the ld. CIT(A) examined the details filed by the assessee in order to prove the identity, creditworthiness of the loan creditors and genuineness of the transactions, including sale bills issued by the assessee company to these parties, confirmation and copies of PAN cards. Thereafter, the ld. CIT(A) relied on the various judicial pronouncements and came to the conclusion that the alleged transaction was towards sale of equity shares and the assessee has successfully explained the source of the said sum and, therefore, no addition is ....
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.... part of the index of the paper book containing details filed by the assessee is reproduced below:- Amarjyoti Commercial Pvt. Ltd. (i) Acknowledgement of Return of Income (ii) Source of Funds (iii) bank statements (iv) PAN card (v) Computation of income & tax. (vi) Audited Financial Accounts for F.Y. 2013-14 (vii) Bill for sale of Investment. Chin Purni Agencies Pvt. Ltd. (i) Acknowledgement of Return of Income (ii) Source of Funds (iii) bank statements (iv) PAN card (v) Computation of income & tax. (vi) Audited Financial Accounts for F.Y. 2013-14 (vii) Bill for sale of Investment. Chandra Ghanta Bargain Pvt. Ltd. (i) Acknowledgement of Return of Income (ii) Source of Funds (iii) bank statements (iv) PAN card (v) Computation of income & tax. (vi) Audited Financial Accounts for F.Y. 2013-14 (vii) Bill for sale of Investment. Katyani Sales Pvt. Ltd. (i) Acknowledgement of Return of Income (ii) Source of Funds  ....
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....tment. Rajshree Solutions Pvt. Ltd. (i) Acknowledgement of Return of Income (ii) Source of Funds (iii) bank statements (iv) PAN card (v) Bill for sale of Investment Shivrashi Distributors Pvt. Ltd. (i) Bill for sale of Investment Jeen Mata Dealers Pvt. Ltd. (i) Acknowledgement of Return of Income (ii) Source of Funds (iii) bank statements (iv) Computation of income & tax. (v) Audited Financial Accounts for F.Y. 2013-14 (vi) Bill for sale of Investment. 10. Further we notice that information called for by the ld. Assessing Officer u/s 133(6) of the Act were duly served upon all the creditors and even in the remand proceedings, most of the loan creditors have again confirmed the transaction and only in some cases, creditworthiness has been doubted by the ld. Assessing Officer based on the small amount of bank balance standing at the opening of the year. Assessee has filed the following details in the case of the alleged sundry creditors:- a) Identity of these parties b) Bank statement of these parties showing the transactions unde....
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....l 62,50,000 4. In response to the notice issued u/s 142(1) of the Act the assessee furnished the details of "sale of investments" to the AO. In response to the notice u/s 131 of the Act issued by the AO, to the purchasers companies, the following documents/evidence was filed before the AO by all the three companies which purchased the shares of the company. (a) Copy of Income Tax Return (b) Copy of Certificate of incorporation (c) Copy of Audited Accounts (d) Copy of Share sale Invoice (e)Copy of the bank account of the share purchaser company The AO wanted the personal appearance of the directors of the purchaser companies. As there was no compliance this addition u/s 68 is made. In our view this is against the proposition of law laid down by the Hon'ble Supreme Court in the case of CIT vs Orissa Corporation(P)Ltd (1986)159 ITR 78 (SC). We find that the share purchasers are all income tax assesses and they have filed return of income and the payments were made through account payee cheques and the share purchasers have confirmed purchase of the shares. There is no evidence with the revenue that the sale in question is a ....
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....shares was bogus transaction or the shares sold by the assessee were bogus one. ITA No.2404/Kol/2017 Adbhut Vinimay Pvt. Ltd. A.Y.2012-13 4 vii) In I.T.O. Vs Jatin Investment Pvt. Ltd. (supra), it is held that when the assessee purchased the shares in earlier year which were shown as investment in the books of account and reflected in the balance sheet then the assessee sold certain investments and accounted for the profit or loss, the provisions of Section 68 of the Act were not applicable. viii) Similarly, Hon'ble Jurisdictional High Court in the case cited as CIT Vs Vishal Holding and Capital Pvt. Ltd. vide order dated 9th August, 2010 upheld the order dated 30.07.2009 of the ITAT in I.T.A. No. 1788/Del/2007 for the Assessment Year 2000-2001 wherein the order of the Ld. CIT(A) making the similar deletion was upheld by observing in para 6 as under:- "We are of the view that the assessee had produced copies ) of accounts, bills and contract notes issued by M/s. MKM Finsec Pvt. Ltd., and had been maintaining books of account as per Companies Act. The assessee had also demonstrated the purchase and sale of shares over a period of time as seen from the ....
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....ier year 13 4325 & 4326/ Del/2009 under similar circumstances, the case was reopened u/s 147 of the Act and the addition made by the AO was deleted by the I.T.A.T. It was further submitted that the assessee sold the shares which were earlier purchased in different years and duly shown in the balance sheet of the respective years and that the assessee had shown the sale proceeds in the books of accounts, the investments were reduced after making the sales. It was contended that there was no obligation under the law that the assessee was required to prove the source of payee. It was further contended that the AO had not rejected the books of accounts and the purchases were duly accepted so there was no reason to doubt the sales. It was submitted that the case of the assessee is squarely covered by the decision of this bench of the Tribunal in the case of ITO vs. M/s Vishal Holding and Capital Pvt. Ltd. in ITA no. 1788/Del/2009 order dated 17.07.2009 which has been upheld by the Hon'ble Jurisdictional High Court as reported in (2011) 200 Taxman 186 (Delhi). It was further, submitted that the issue is also covered by the order of the ITAT, Delhi Bench in the case of ITO vs. Goodwil....
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....ng Officer has simply acted on the information received from the Investigation Wing without verifying the details furnished by the assessee. The assessee has also produced best possible evidence to support its claim. Consequently the addition made by the Assessing Officer cannot be sustained." 14. We, therefore, considering the totality of the facts do not see any valid ground to interfere with the findings of the Ld. CIT(A). Accordingly, we do not see any merit in this appeal of the department. In ITA no. 4326/Del./2009 of the assessment year 2004- 05 identical issue having similar facts is involved, the only difference is in the amount of addition which was deleted by the Ld. CIT(A). Therefore, our findings given in former part of this order, in respect of 16 4325 & 4326/ Del/2009 assessment year 2003-04, shall apply mutatis mutandis for assessment year 2004-05. 14. We, therefore, considering the totality of the facts do not see any valid ground to interfere with the findings of the Ld. CIT(A). Accordingly, we do not see any merit in this appeal of the department. In ITA no. 4326/Del./2009 of the assessment year 2004- 05 identical issue having similar facts is i....
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....ed in the above part of this order to contend that the share transaction entered into by it with MKM Finsec Pvt. Ltd. was a genuine transaction. The shares which were subject matter of sale were standing in the balance sheet of the assessee which were subject matter of sale. The party to whom the sales have been made have confirmed the transactions and the transaction was supported by documentary evidence. It is also the case of the assessee that no material has been brought on record by the revenue that the share transaction of the assessee was not genuine. The addition has been made on the basis of information received by the Assessing Officer from the Investigation Wing. It is found that in respect of the very same party an addition of Rs. 49,55,300/- was made in the case of ITO vs. Vishal Holding and Capital Pvt. Ltd. (supra) and learned CIT (A) had deleted the addition and the said deletion was contested by the revenue before the Tribunal and it was decided by the Tribunal vide order dated 17th July, 2009 in ITA No.1788/Del/2009 and the order of the CIT (A) was upheld with the following observations:- "5. We have considered rival contentions and gone through the recor....