AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (7) TMI 977
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....ds the capital loss of Rs. 5,73,13,610/- on account of transfer of shares and further erred in calculating the short-term capital gain on the sale of shares at Rs. 2,60,17,820/-only. 3. The necessary facts arising from the order of the authorities below are that the assessee in the present case is an individual and promoter/director of various companies belonging to Amarpali Group. There were certain people who were holding the shares in the company namely M/s Amrapali Fincap Pvt. Ltd. since the financial years 2008-09 and 2009-10. The details of such shareholders are extracted below: Sr.No. Name of theRegistered owner No. of shares Face Value/Rate at the time of allotment Total Investment i.e cost of acquisition 1. Surnisha Orgenizer Pvt. Ltd. 50,000 10/- 5,00,000/- 2. Omrim Securities Ltd. 10,68,058 10/- 1,06,80,580/- 3. Saharshi Securiites Pvt. Ltd 50,000 10/- 5,00,000/- 4. Rakesh B. Patel 42,809 10/- 42,8090/- 5. Nexus Software Ltd. 13,00,867 1,30,08,670/- Total 13,00,867 1,30,08,670/- 3.1 However, the assessee claimed to be the beneficial owner of....
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....the concept of registered shareholder and beneficial ownership of the shares cannot be applied in the transactions which were made after using the colorable device. In view of the above, the AO has disallowed the loss of Rs.5,73,13,610/- and made the addition of short-term capital gain of Rs.2,60,17,820/- by observing as under: 8.2 This is a classic case of defrauding the revenue which can be summarized as below The assessee claims to have bought shares of a company of his own group (Amrapali). The shares are actually registered in the name of other persons, who admittedly are accommodation entry providers. No statutory obligations regarding registered / beneficial ownership has been met in prescribed time. The shares are sold to his son, who is also a director of the company of which the shares belong Though there is a gain of Rs. 2,60,17,820/-, the assessee has fraudulently claimed indexation and claimed Long Term Capital Loss of Rs. 5,73,13,610/-, which has been carried forward to next years. 8.3 In view of the facts and circumstance, it is held that the assessee has not brought on record any evidence to show that th....
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....ee in the capacity of beneficial owner is decipherable from the forms i.e. MGT-4 and MGT-5. 7. Furthermore, the AO has not disputed the cost of acquisition of the shares acquired by the registered shareholders. As such the AO for working out the capital gain has taken the cost of acquisition of the shares at the value at which the registered shareholders acquired the shares of the company. As such, the year in which the registered shareholders have acquired the shares of the company should be taken as the basis year for calculating the income under the head capital gain. The term used in defining short-term capital assets is that the assets should be 1st held by an assessee and not purchased or acquired by it. 8. However, the ld. CIT(A) rejected the contentions of the assessee and confirmed the order of the AO by observing as under: The appellant claimed to have purchased the shares in the year 2009-10 and on inquiry, it was stated that these shares were in the name of Rakesh B. Patel & Omnim Securities Ltd and the appellant was beneficial owner of these shares. The AO issued notice u/s 133(6) of the Act to Shri Rakesh B Patel and Omrim Securities Ltd. In response to....
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..../- as disallowed by the AO is also confirmed. This ground of appeal is dismissed. 9. Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us. 10. The learned AR before us filed a paper book running from pages 1 to 287 and contended that the assessee is the beneficial owner of the shares, and this fact was not doubted by the authorities below. Moreover, the registered shareholders have also confirmed that the assessee was the beneficial owner of the shares. Similarly, the necessary documents filed with the ROC i.e. Form RGT-4 RGT-5 and RGT-6 also establish the fact that the assessee is the beneficial owner of the shares. Moreover, the revenue has not disputed the cost shown by the registered shareholders for the shares in dispute. Thus, it was contended by the learned AR that the shares held by the registered shareholders represent the long-term asset and therefore the assessee should be allowed the benefit of indexation cost. 11. On the contrary, the learned DR before us vehemently supported the order of the authorities below. 12. We have heard the rival contentions of both the parties and perused the materials available on record. From t....
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....s group concerns including the proprietary concern M/s. Bahar Traders were made out of funds layered through various group concern and group concern of Pratik R. Shah. In response to the letter u/s 133(6) of the act to Omrim Securities Ltd., Shri Rakesh B. Patel, on behalf of the company submitted exactly similar reply as in his individual capacity 12.3 Moreover, the assessee has also paid the taxes on the investment made by him in the name of registered shareholders out of his undisclosed income and therefore it will be inappropriate to allege that the transaction shown by the assessee represents the use of colorable device. Furthermore, the revenue while calculating the capital gain in the hands of the assessee has adopted the cost of acquisition shown in the name of the registered shareholders for the investment made in the shares in the years 2008-09 and 2009-10. Thus, a conjoint reading of the of all the above stated facts establishes that the period of holding while calculating the income under the head capital gain exceeds 36 months and therefore the assessee must be given the benefit of indexation cost. Hence, the ground of appeal of the assessee is hereby allowed. 12....
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....the Act. As a result of search and seizure operation, certain documents in the form of cash book and cash vouchers were found containing the financial transactions relating to the assessee. It was found out based on the impugned seized documents that the assessee has received a sum of Rs. 5,10,37,810/- in cash and made cash payment of Rs. 11,32,00,650/- which is nothing but represents unexplained expenses. All these cash transactions were carried out by the assessee with the Venus group. Based on the above, the AO has made the addition of Rs. 5,10,37,810/- and 11,32,00,650/- under section 69A/69C of the Act. 16. Aggrieved, assessee preferred an appeal to the learned CIT(A) who deleted the addition made by the AO by observing as under: 6.2 The facts mentioned in the assessment order and the submissions of the appellant has been carefully considered. The AO stated in para 9.7 of the assessment order that the appellant made payment of Rs 11.32,00,650/- in cash to Venus Group which remains as unexplained expenses and same has been added u/s 69C of the Act The AO further stated that the appellant received Rs.5,10,37,810/- in cash from the Venus group and the same has been co....
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.... found about the relation of these papers with the appellant. Therefore, the statements of Vaswani family members do not contain anything against the appellant. Regarding statement of Shri Deepak Gajjar, Accountant of Vaswani group as reproduced by the AO on page 40/41 of the assessment order, there was no question asked about these papers and he only admitted that these papers are written in his handwriting as per directions of Shri Ashok Vaswani but there is no mention of the appellant in the whole statement of Shri Deepak Gajjar. These facts clearly prove that during the course of search, post search and assessment proceeding, there is no statement of anyone which has any reference of the assessee in any manner which can be attributed against the appellant. When the persons from whose premises the documents were found, does not state anything against the appellant, additions made in the hands of the appellant are not found justified. Regarding exchange of SMS between Shri Ashok Vaswani and the appellant as reproduced on page 22 of the assessment order. these sms contains the details of bank accounts of Ashrita Construction P Ltd and Amrapali Capital and Finance Service Ltd, but ....
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....TR 696 (Bom) Section 69A of the Income-tax Act, 1961 Unexplained moneys Assessment years 1962-63 to 1964- 65-Relying on evidence in form of statements by two persons that they had paid money in 'black' to assessee, as well as entries in books belonging to them regarding alleged payments, ITO made additions to assessee's total income as income from undisclosed sources Tribunal, o scrutiny of said statements, having found that evidence tendered suffered from serious infirmities held that mere entries in accounts regarding payments to assessee were not sufficient to prove tha assessee had received money in black' for which she did not issue a receipt - Tribunal delete additions accordingly - Whether entries in day-book or ledger would be a corroborative piece evidence and once direct evidence of persons having made payments in 'black' was disbelieved, I value could be attached to those entries Held, yes - Whether therefore, Tribunal was justified deleting additions - Held, yes. b) Jawaharbhal Atmaram Hathiwala vs ITO, (2010) 128 TTJ 36 (Ahd) Section 69 of the Income-tax Act, 1961- Unexplained investments - Assessment year 1999-2000- W....
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....y side, must not be spared on the basis of unfavorable evidence. So the procedure is that a mistrust leads to investigation and an investigation leads to collection of evidence. There are several decisions in the past pronounced by the Hon'ble Apex Court wherein a general rule is framed that although the ITO is not fettered by the technical rule of evidence, but ITO is not entitled to make a pure guess, however, required to make an assessment without reference to any evidence. There must be something more than bare suspicion. In the present appeal a fundamental question is that whether there was sufficient clinching evidence unearthed by the Revenue Department consequent upon the search to make a firm belief that in fact there was the existence of unaccounted Investment in the purchase of land. Side by side a second question therefore arises that whether the impugned addition was in the nature of suspicion only. We have carefully examined both these questions and on critical analysis of the evidences and under the totality of the circumstances, we hereby hold that those were not even the incriminating material but simply e) Devaram C Bhavani vs ITO in ITA No. 4675/Mum/....
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....supported the order of the authorities below as favourable to them. 21. We have heard the rival contentions of both the parties and perused the materials available on record. From the preceding discussion, we note that there was a search and seizure operation under section 132 of the Act at the premises of Venus group dated 10-03-2015. As a result of the search, certain documents were found in the form of vouchers and cash book, containing various financial transactions. Based on these documents, the addition was made by the AO in the hands of the assessee for the different amounts which have been elaborated in the preceding paragraph. Before we deal with the specific issue arising from the order of the authorities below, we note that there is a presumption under section 132(4A) of the Act, providing that the documents found during search shall be presumed belonging to the search party. There is no ambiguity to the fact that the documents were found from the 3rd party which have been used for the purpose of the addition in the hands of the assessee. In other words, the documents found from the premises of 3rd party have been used against the assessee. However, on perusal of the ....