TaxTMI 
TaxTMI 
2025 (3) TMI 353
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.... proceeds of the share u/s. 68 of the I.T. Act, without appreciating the fact that as per investigation done by income tax Department (Inv), Kolkata dated 27.04.2015, the name of the assessee featured in the list of the persons who have availed bogus LTCG and exemption u/s. 10(38) of the Income Tax Act. ii) On the facts and circumstances of the case & in law, the Ld. CIT(A) failed to appreciate the ground realities that the documents in the case of shell companies are always in order so that they can act as a conduit in aiding tax evasion. iii) On the facts and circumstances of the case & in law, the Ld. CIT(A) failed to appreciate that documents are manufactured to give genuineness to the otherwise coloured transaction aiding in tax evasion. iv) On the facts and circumstances of the case & Law, the Ld. CIT(A) failed to appreciate the fact of layered transaction of purchase and sale of shares which clearly depicted that the LTCG of the assessee is a sham transaction, clearly explained by AO from Para 7.1 to 11.2. v) On the facts and circumstances of the case & in law, the Ld. CIT(A) failed to enumerate while giving relief that how the facts of th....
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....iled to appreciate that the transaction through bank is executed to make the otherwise colourable transaction appeal genuine xv) On the facts and circumstances of the case & in law, the Ld. CIT(A) failed to appreciate that even if documentary evidence is produced, the same must pass the test of human probabilities and surrounding circumstances if they do not, then the claim so made fails. xvi) On the facts and circumstances of the case & in law, the Ld. CIT(A)erred in deleting the addition of Rs. ,84,35,115/- made by the AO on sale proceeds of the share u/s. 68 of the I.T. Act, without appreciating the fact that the assessee has failed to establish the financial and operation of the company to prove the enormous rise in share value and thereby the genuineness of the transactions to the satisfaction of the AO, thereby ignoring the Apex Court decision in the case Pavankumar M. Sanghavi Vs. Income-tax Officer (Special leave to appeal (C) No(s) 10250 of 2018 and NRA Iron & Steel Pvt. Ltd. (SLP (Civil) No. 29855 of 2018) dated 5th March, 2019 on same facts. xvii) On the facts and circumstances of the case & in law, the Ld. CIT(A) has failed to apply the ratio ....
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.... grounds while failing to appreciate that CIT(A)"s power is coterminous with AO and she could have corrected the impugned error of AO clearly propounded in the decision of Hon'ble Supreme Court in Kanpur Coal Syndicate. II. On the facts and circumstances of the case & in law, the Ld. CIT(A) erred in deleting the addition of Rs. 15,75,789/- on account of disallowance u/s. 14A, failing to appreciate the fact that the assessee has failed to prove that investments has been made not out of borrowed fund when the accounts are tangible and not separate accounts for investments are maintained. xxv) Any other question of law and fact to be raised at the time of appeal. xxvi) It is humbly prayed to set aside the order of the CIT(A) and restore the order of the assessing officer" 3. Fact in Brief :- The facts, as culled out from the impugned order passed by the learned CIT(A) are that, on 14/01/2015, the assessee filed its return of income electronically declaring net taxable income at Rs. 32,63,962. The assessee had purchased 4,22,500 shares on 16/03/2012, physically at the rate of Rs. 10 per share and the same were duly reflected in the books of account of the ....
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.... the contention of the assessee and made addition under section 68 of the Act at Rs. 2,84,35,115. 5. The assessee made investment in shares amounting to Rs. 20,61,59,037. The assessee has borrowed fund of Rs. 12,89,09,181, on which interest amounting to Rs. 17,07,742, has been paid. The assessee received dividend amounting to Rs. 48,899, which was claimed exempt under section 10(34) of the Act and claimed expenditure at Rs. 15,75,789, in the return of income. The Assessing Officer has made disallowance under section 14A at Rs. 15,75,789, though the assessee is not liable for the same. Being aggrieved the assessee preferred appeal before the first appellate authority. 6. During the proceedings before the learned CIT(A), the assessee made a detailed submission which was recorded by the learned CIT(A) in its impugned order vide Page-4 to 14, is also reproduced below for ready reference:- "5. The Authorised Representative of the assessee has made the following written submission: The assessee has e-filed return of income on 14/01/2015 declaring net taxable income at Rs. 32,63,962/-. In the return of income assessee has shown income from Salary, income from house....
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....nt proceedings details were called and the assessee attended from time to time and filed the reply the copy of the reply on Page-150 To 156 of the Paper Book. The learned assessing officer has not considered the contention of the assessee as well as documents submitted by the assessee on the basis of a massive investigation was carried out by Pr. Director of Income Tax (Investigation), Kolkatta in the cases where the provisions of section 10(38) were being misused by the beneficiaries of bogus long term capital gain and to avoid paying taxes and have also been forwarded the details of transactions entered into by the assessee. The learned assessing officer has not any provided the details forwarded by Investigation Wing, Kolkatta as well as statement of persons, whose statement were recorded during the course of investigation made by the Pr. Director of Income Tax (Investigation), Kolkatta. Even the learned assessing officer has not granted opportunity to being cross examine to the persons, whose statement were recorded during the course of assessment proceeding to the assessee. The investments made in shares were also accepted by the assessing officer during the previous ....
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....6 of Paper Book Part-II. The same were duly reflected in the books of accounts of assessee. The assessee already submitted copies Balance sheet alongwith Investment in securities ledger account. Later on shares of Shree Ganesh Spinner Ltd. were given to Scan Infrastructure Limited for purchase of shares of Swift IT Infrastructure & Services Limited (None Listed Company). The assessee encloses herewith debit note by Scan Infrastructure Limited, which is on Page-77 of Paper Book Part-II. Thereafter, the assessee has received physical delivery of 4,22,500 shares of Swift IT Infrastructure And Services Ltd. on 16/03/2012. Swift IT Infrastructure was none listed company and does not come under the preview of SEBI (ACT). The aforesaid shares were dematerialized with Karvy Stock Broking Limited on 11/03/2013. Later on Company Swift IT Infrastructure Pvt. Ltd was amalgamated with "Parag Shilpa IT Infrastructure and Services Limited". The assessee encloses the order of Hon'ble High Court of Judicature at Bombay sanctioning a scheme of amalgamation of Swift IT Infrastructure & Services Limited with Parag Shilpa Investments Limited & New Name is Parag Shipla IT Infrastructure And Ser....
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....ng assessing officer purchase and sale transaction of shares was treated as unexplained credit u/s. 68 of the Income Tax Act; ii. The assessee has furnished contract not for purchase and sale of shares and each and every details, bank statement showing receipt of sale proceed amount and demat account statement for holding of shares; iii. The whole assessment is based on suspicion and enquiry made by the Principal Director of Income Tax (Investigation) Kolkatta and on the basis of statement which were not confronted to the assessee; iv. The order of the assessing officer is arbitrary and without affording the reasonable opportunity to the assessee. There is violation of principles of natural justice to the assessee; v. Suspicion cannot be a good evidence for the purpose of assessment unless it is corroborated by clinching evidence brought on record after affording reasonable opportunity to the assessee; vi. Payment for purchases and sales both have been made by cheque and duly reflected in the bank statement; vii. The sale of shares has been done through MPSE Securities Limited on screen based trading system; viii. The s....
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.... On the above mentioned preposition assessee placed reliance on- 1. I.T.A. No. 24/KOL/2013 (ITAT KOL) Chainroop Bohra Vs Deputy Commissioner of Income Tax 2. I.T.A. No. 6248/Mum/2012 (ITAT, Mumbai) Shri Kamlesh Mundra Vs. Income Tax Officer We also hold that in the present case by virtue of independent documents as referred in paper book the assessee proved the genuineness of the share transaction and there was no justification to disallow the claim of the assessee in respect of long term capital gain merely on the basis of information received from DDIT which is based on admission of Shri Mukesh Chokshi. Therefore accordingly, we direct the AO to assess the long term capital gain declared by assessee as such and accept the same. 3. I.T.A. No. 3801/Mum/2011 (ITAT, Mumbai) Ms. Farrah Marker -Vs- Income Tax Officer In this factual and legal matrix of the case, as discussed above, we find that the addition under section 68 of the Act made and confirmed by the authorities below to be unsustainable and therefore, directed the AO to deleted the said addition and accept the LTCG income shown as exempt under section 10(38) of the Act. ....
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....Kiran Balani -Vs.- Income Tax Officer, Ward-2(1), Nagpur 9. Order of the Commissioner of Income Tax (Appeals)-I, Nagpur dated 21/04/2014 vide appeal No. CIT(A)-I/406/2010-11 in case of Shri Suresh Balani (HUF) -Vs.- Income Tax Officer, Ward-2(2), Nagpur 10. I.T.A. No. 4522/Mum/2012 (ITAT, Mumbai) Dharmesh Manibhai Patel -Vs- Income Tax Officer 11. (2011) 336 ITR 287 (High Court, Bombay) Commissioner of Income Tax -Vs- Gopal Purohit Capital gains-Vis-à-vis business income-Transactions in shares-Tribunal has entered a pure finding of fact that the assessee is engaged in two different types of transactions namely, investment in shares and dealing in shares for the purposes of business-It held that the delivery based transactions are to be treated as investment transactions and the profit received therefrom is to be treated as short-term or long-term capital gain depending on the period of holding of shares-Tribunal has correctly held that though the principle of res judicata is not attracted since each assessment year is separate in itself, there ought to be uniformity in treatment and consistency when the facts and circumstances are identica....
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..../2014 (ITAT, Mumbai) P-II Income Tax Officer -Vs.- M/s. Indravadan Jain HUF 20. I.T.A. No. 5068/Mum/2009 (ITAT, Mumbai) P-II Shri Jafferali K. Rattonsey -Vs- DCIT 21. (1983) 141 ITR 0067 (Bom. HC)P-II Commissioner of Income Tax -Vs.- Bhaichand H. Gandhi 22. Order of the Commissioner of Income Tax (Appeals)-4, Nagpur dated 27/03/2017 vide appeal No. CIT(A)-4/ 128/16-17 in case of Smt. Santosh Ramprasad Agrawal -Vs.- Income Tax Officer, Ward-4(2), NagpurP-II 23. Order of the Commissioner of Income Tax (Appeals)-4, Nagpur dated 31/03/2017 vide appeal No. CIT(A)-4/ 183/16-17 in case of Shri Suresh Rochaldas Kewalramani -Vs.- ITO, Ward-4(2), Nagpur, P-II 24. Order of the Commissioner of Income Tax (Appeals)-4, Nagpur dated 24/03/2017 vide appeal No. CIT(A)-4/ 350/10-11 in case of Shri Vishwas Shridhar Kukde -Vs.- ITO, Ward-4(2), NagpurP-II In view of the above assessee humbly request that claimed made by the assessee is true and correct and same may kindly be allowed. Ground No. 10 & 11 : The assessee has made investment in shares amounting to Rs. 20.61 crore and same were duly reflected in the books of account and ....
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....isions of Rule 8D are applicable from AU 2008-09 and onwards-AO can determine amount of disallowance in terms of Rule 80D only if he is not satisfied with correctness of claim of the assessee, that too, after having regard to accounts of assessee-In instant cases, assessee is putting forth its contention against disallowance from different angles-Some of contentions were raised for first time before Tribunal-Contentions of assessee can be appreciated only if relevant facts are available-All relevant facts are not available before Tribunal-Availability of assessee's own funds on date of making investments also required to be verified-Matter remitted to AO 2. Judgment of Hon'ble Income Tax Appellate Tribunal, Bengalore Bench "B", Bangalore dated 20/02/2015 vide ITA No. 404 (Bang) 2013 in case of Deputy Commissioner of Income Tax -Vs.- M/s. Subramanya Construction & Development Co. Ltd.P-II 3. (2013) 218 Taxman 0142 (Guj. HC)P-II CIT-Vs.- Gujarat Industrial Development Corporation Ltd. Tribunal was satisfied in affirming deletion of disallowance under section 14A when revenue failed to establish that assessee had incurred any expenses for earning dividend in....
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....e learned CIT(A), while considering the submissions of the assessee emphatically, held that the addition made by the Assessing Officer is factually as well as legally incorrect and the disallowance of exemption under section 10(38) of the Act was directed to be deleted. The relevant portion of the findings of the learned CIT(A), vide Page-14 to 38, of the impugned order are hereby reproduced herein below for ready reference:- "7 Ground Nos. 2 To 9 : The appellant has challenged the addition made by AO of Rs. 2,84,35,115/- as sale proceeds on sale of shares u/s. 68 of the I.T. Act. I have gone through the assessment order, the grounds of appeal, the submission made by the appellant and the relevant judicial pronouncements of the Hon'ble Courts on the subject and the facts of the case are examined on the basis of supporting evidences that were produced before the Assessing Officer. 7.1 The assessee has filed e-return of income on 14/01/2015 declaring net taxable income at Rs. 32,63,962/-. The case was selected for scrutiny and notices u/s. 143(2) & 142(1) were issued to the assessee. In response to notices, the counsel for the assessee attended from time to time and....
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....ny, details of sanction order of amalgamation from the Hon'ble Bombay High Court, new name of company, details of dematerialization, details of transfer of shares and submitted each & every details as & when called by the assessing officer during the course of assessment proceedings. 7.3 The submission of appellant were sent to the Assessing Officer on remand on 26.05.2017, the report of which was received on 30.03.2017. Further clarifications and the report of Investigation wing were again called for on 29.08.2017. The same was received on with annexures 28.09.2017. These were perused. The appellant has furnished his rebuttal of the issues reiterated in the Remand Report and on the basis of all the documents available on record the matter was heard. 7.4. Further, the assessee has also contested the remand report (which is based on the Investigation Report of Kolkata) by making some very compelling arguments as under 1. As per Para-1 - "It is seen that the name of Shri Nandkumar Khattumal Harchandani son of Shri Khattumal Harchandani also features in the list of cases who availed bogus LTCG and claimed exemption from tax as per provision of Section 10(38)....
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....term capital gains. The assessee has invested the amount as an investment and sold the share through Bombay Stock Exchange and paid STT. The assessee has made all the transaction through proper banking channel as well as all these transaction are legally valid. The entire amount was received through proper banking channel and entered into the books of account of the assessee as credit. The ld. AO has failed to substantiate the involvement and have not established any direct nexus of the assessee with any such organized rackets, brokers or operators. The learned assessing officer has filed to provide any director or corroborative evidence against the assessee to prove the involvement of the assessee. Thus, the assessee has proved beyond doubts that the said transaction was valid and done through proper banking channels and hence there is no question of applying the conventional method or merger method in the assessee's case as mentioned in the report. The Assessing Officer observed that the companies are controlled by them through dummy directors. The assessee respectfully submitted that there is no dummy director in the case of assessee. It is further observed by the learn....
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....details with respect to share transaction during the course of assessment proceedings before the assessing officer and thus proved the genuineness of the transaction beyond doubts. On the contrary the assessing officer has neither pointed out any defect in books of account nor in any documents submitted by the assessee to negate the claim made by the assessee and failed to provide any evidence on record showing the said transactions were made for providing accommodation entries. The ld. AO has failed to substantiate that the assessee has brought back his own unaccounted money under the grab of LTCG as no evidence was produced in this regard. Further, nothing has been brought on record to prove that unaccounted money was involved in the said transaction of the assessee. The learned AO completed the assessment proceedings in an arbitrary manner based on certain assumption, suspicions and surmises. Further, no evidence of any movement of cash have been found by the ld. AO showing that the share were purchased for obtaining accommodation entry. The learned assessing officer have as well failed to provide any direct or corroborative evidence against the assessee to prove this a....
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....3-2014 and the same were shown in the balance sheet of the assessee as investment and entire investment were duly accepted by the assessing officer during the previous yer relevant to Asstt. Year 2013-2014 in the scrutiny assessment and assessment were completed u/s. 143(3). The assessee has already submitted copy of assessment order for A.Y. 2013-14 with earlier reply. The assessee has received physical delivery of the share of Swift IT Infrastructure & Services Limited on 16/03/2012 at the rate of Rs. 10 each. The assessee has submitted the copies of share certificate during the course of assessment proceeding before the assessing officer. The assessee encloses herewith copies of share certificates, which is on Page-9 To 98 of the Paper Book (Part-I). Thereafter, Later on the aforesaid physical shares were dematerialized with Karey Stock broking Limited on 11/03/2013. In support of the contention the assessee has submitted letter of demat of physical share certificates alongwith acknowledgment of receipt of share from Karve Stock Broking Ltd. Later on these shares were amalgamated to Parag Shilpa Infrastructure Limited. Thereafter the share were transferred to MPSE Secur....
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....ssee do not know the companies and have not entered into any transactions with such paper companies as mentioned by the assessing officer. The assessee has nothing to do with such paper companies and there was no name of the assessee and no name of company "Parag Shilpa Infrastructure Ltd." in the details of companies. It is mentioned in the Para-4.3 of the report by the assessing officer that "statement of Operators were recorded by the Kolkata Directorate wherein they have admitted their statements that they have indulged in providing accommodation entries for Long term capital gains". The assessee respectfully submitted that nowhere in the statement or the report it is stated that assessee or the companies in which assessee invested were involved in any such bogus transactions and there is neither name of assessee nor name of the company "Parag Shilpa Infrastructure Ltd." in the entire report. As per Para 4.6, the assessing officer stated that "the assessee has purchased the share of M/s. PSIT Infrastructure Ltd. for a very low price". The assessee has actually not purchased PS IT Infrastructure shares, but assessee has purchased Swift IT Infrastructure Ltd. wa....
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....in the case of DCIT vs. Smt. Hansa Choudhary [2012] 23 taxmann.com 302 (Jodhpur-Trib) was clearly seen that assessee purchased shares in earlier year. They were shown in the balance sheet which was filed alongwith the return of income. The payments were made through books of account which had not been doubted. The shares belonged to a listed company which was also not in doubt. The company itself had issued certificate that all those shares had been demated, copy of the same was placed on record. Once the purchase of shares was not doubted, then the same of same shares should not have been doubted. Further, the payment was received through cheque. The assessing officer had failed to discharge his onus to prove that assessee had invested his own money except relying on statement of a third persons who had given a general statement that he was issuing accommodation entries to some persons. Accordingly, addition made by the Assessing Officer was to be deleted. 6. As per Para 5.1, 5.2 of report : In the case of the assessee, he has got the shares pursuant to the scheme of Amalgamation of Swift IT Infrastructure & Services Limited with Parag Shilpa Investments Limited ....
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....dematerialized with Karvey Stock exchange Pvt Ltd. on 11/03/2013 itself which is more than one year before the share were sold. The Assessing Officer have further mentioned in the report that "Many Clients ask for Holding letters, which re basically letters issued from the entry providers that they have purchased "X" amount of shares on behalf of such clients on a particular date and these companies are holding them in their pool account on behalf of these clients. These letter is usually produced before various authorities to prove that the alleged purchase of share has taken place over a year ago. All these action are in violation of the provisions of the securities contract (Regulations) Act 1956 and hence are illegal". The assessee respectfully submitted that assessee has never violates any of the provisions of Securities Contract (Regulations) Act, 1956. The assesse has never issued or received any holding letters ever. Hence the said allegations is totally denied. The assessee always follow due procedure of law and provisions laid down in SEBI for purchase and sale of shares. Swap of Shares The assessee has purchased the share of Well Pack ....
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....ee has received physical delivery of the share of Swift IT Infrastructure & Services Limited on 16/03/2012 at the rate of Rs. 10 each. The assessee has submitted the copies of share certificate during the course of assessment proceedings before the assessing officer. In support of its contention the assessee has submitted copies of share certificates. The assessing officer wrongly mentioned in the report that in Para 7.3 that, "these shares were never materialized and assessee received share of Parag Shilpa only on 03/03/2014 and 07/03/2019". The assessee respectfully submits that assessee has dematerialized the said shares on 11/03/2013 with Karvy stock broking Ltd. The date mentioned by the assessing officer i.e. 03/03/2014 and 07/03/2014 is the date of transfer of share from Karvey Stock Broking Ltd. to MPSE Securities Ltd. The same can be evidence from the statement of account of Karvey Stock Broking Ltd. where there were opening balance of 422500 shares and from there 100000 shares were first transferred to MPSE Securities Ltd. on 03/03/2014 and 302500 share were later transferred on 07/03/2014 to MPSE Securities Ltd. As per Para-7.4 The assessing officer wro....
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....lity can be imposed on any assessee with respect of certain information received from third party until and unless the assessee were confronted with the same and offered an opportunity to rebut the same as the same amounts to violation of principles of natural justice. The assessment order was passed and additions were made merely on the basis of certain information received from the investigation wing of IT Department without application of mind by the ld. A.O. and without establishing a link between the information received and the captioned transaction of the assessee. This clearly shows that the assessment was made in a pre-decided manner and as per the whims and wishes of the ld. AO. Hence, the assessment so made is bad in law and deserves to be quashed. Reliance in this regard is placed on the following * Hon'ble Rajasthan High Court judgment in the case of CIT v. A.L. lalpuria Construction (P.) Ltd. (32 taxmann.com 384) wherein it was held that oral statement of third party recorded by search authorities which was never placed to be confronted by assessee and no documentary evidence was supplied to assessee, could not be considered in making addition on acc....
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....that it should be believed completely to the prejudice of the assessee." * Hon'ble Agra ITAT in the case of ITO v. Mayur Agarwal (2011) (128 ITD 55) held that no addition can be made merely on the basis of evidence procured from the party unless and until that party was put to the assessee for cross examination. The relevant extract is reproduced here as under: "From the copy of the assessee's account in the books of the third party, namely. "N", it was clear that against all the transactions relating to the assessee, the bill numbers were duly mentioned but the respect of the transaction relating to Rs. X which the assessee had denied, "N" had not mentioned any bill number but had shown the bank draft, etc. No addition could be made merely on the basis of the evidence procured from the third party unless and until that party was put to the assessee for cross-examination, specially when the assessee had categorically denied the transaction. Statement relied on by the revenue itself did not disclose the bill number though which transaction was entered into. It contained through drafts, etc. only. Therefore, this evidence, could not be a valid evidence to make the a....
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....ssee's arguments were verified by examining the documentary evidences produced before me. In the assessment order, the AO has raised certain issues which are dealt with as under 1. Issue : According to the AO, in the report sent by the Office of Pr. Director of Income Tax (Investigation), Kolkata to the Pr. Director of Income Tax (Investigaion), Nagpur vide letter dated 27/04/2015, name of the assessee features in the list of the persons who have availed bogus LTCG and claimed exemption u/s 10(38) of the Act. The details of transactions entered into by the assessee were also forwarded to the Assessing Officer. Facts on the issue : The copies of statements sent to the AO by the Investigation wing, in fact does not contain the name of the assessee, or even the company Parag Shilp Infrastructure Ltd. The modus of operandi described in the report is general information passed on the AO. The assessee has furnished all the necessary evidences as proof of the transactions. These documents were not falsified by AO. No contrary evidences were found to support the allegation that the assessee had participated in the modus operandi indulged by the persons in Kolkata, or had ....
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....ecurities Ltd. but no details provided. The assessing officer mentioned that assessee furnished copies of physical share certificate of Swift IT Infrastructure Limited which got transferred on 16/03/2012. The A.O. further observed that through it was swap of shares but these shares of "Swift" were not immediately handed over to the assessee. The A.O. alleged in Para-9.2 that on 05/09/2014, the balance sheet were further split into 26,35,000/- shares. In Para-9.4, the AO alleged there is cash transaction. In Para-9.9, the AO has held that the gains arising from sale of shares was short term in nature and not LTGC. The assessee purchased shares on 16/03/2012 and dematerialized on 11/03/2013 and sold the same during period from 04/03/2014 to 18/03/2014. In Para-10, the A.O. stated that the statement of assessee was recorded under section 131 of the Act and the assessee has submitted all the details and explanation alongwith entire transaction. 2.1 Fact of the case. It has been pointed out that the assessee purchased 422500 shares physically of Swift IT Infrastructure & Services Limited (SITIT) at the rate of Rs. 10 each, the physical delivery of which were received on 16/03/2....
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....essee has submitted the letter confirming deliver slip for shares transfer to "Mittal Share Brokers Pvt. Ltd." alongwith statement of accounts of Karvey Stock Broking Ltd and transaction statement f MPSE Securities Ltd. These evidence were before the AO, during the course of assessment proceedings. The assessee had Client ID issued by MPSE Securities Limited, which clearly shows the assessee's name, address and bank details. The assessee has also submitted details of Client ID during the course of assessment proceedings. I find that these evidence have not been controverted and neither has the AO falsified these documents, or proved them non-genuine. 3. The assessee has sold the aforesaid shares for a total consideration of Rs. 2,84,34,115/- during the previous year relevant to Asstt. Year 2014-2015 and shown book profit at Rs. 2,79,05,115. The sale consideration was received through proper banking channel and are duly recorded in the books of accounts of the assessee. Since the period of holding of the shares is more than one year (purchased on 16.3.2012 and sold on 6.3.2014), the capital gain transaction were longterm capital of the assessee and exempt u/s. 10(38) of the....
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....uided and presumptive. 6. The A.O. has stated that the assessee purchased 226000 shares of M/s. Shree Ganesh Spinners Ltd. during A.Y. 2011-12 for Rs. 42,46,550/- through MPSE Securities Ltd. but no details provided. This allegation is incorrect as all details had been provided during the assessment proceedings as well during the remand proceedings. The assessee has furnished all documents to show the transactions. The assessee has furnished all documents to show the transaction through MPSE Securities Ltd. and the details of purchase of shares of M/s. Shree Ganesh Spinners-such as quantity, rates and these were furnished before the AO. The AO has alleged that the shares of Ganesh Spinners were not sold but exchanged. I find this allegation to be factually incorrect and contrary to real events. The company Ganesh Spinners is a listed company and its shares cannot be exchanged or swapped. The assessee sold the share of Ganesh Spinners on 19.09.2011 and purchased share of Swift IT Infrastructure Ltd. on 16.3.2012. The AO mentioned that assessee furnished copies of physical share certificate of Swift IT Infrastructure Limited which got transferred on 16/03/2012. These share w....
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....the same time, the assessee further invested sum of Rs. 42,46,550/- for purchase of 2,26,000 shares of Shree Ganesh Spinners Limited through Bombay Stock Exchange Trading Terminal, which is also reflected in the Balance Sheet of A.Y. 2011-12. These shares were sold on 19.09.211. The assessee has submitted Demat Share account for the period from 01/04/2009 To 31/03/2015 and the credit not issued by Scan Infrastructure Limited. The sale of share were duly reflected in the books of account of assessee, and the assesse has submitted copies of Balance Sheet alongwith investment A/c. in securities ledger account. The assessee thereafter placed on order for purchase of shares of Swift IT Infrastructure & Services Limited (unlisted company) and received physical delivery of 4,22,550 shares of Swift IT Infrastructure and Services Ltd. on 16/03/2012. Swift IT Infrastructure being an unlisted company and did not come under the preview of SEBI (Act). These share were dematerialized with Karvy Stock Broking Limited on 11/03/2013. Later on Swift IT Infrastructure Pvt. Ltd. was amalgamated with "Parag Shilpa IT Infrastructure and Services Limited". The assessee has submitted order of Hon"ble High....
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....orically stated that in the aforesaid list of companies there is neither the name of assesse nor the name of company "Parag Shilpa Infrastructure Ltd." in which assessee had invested in shares. Similarly, the assesse had no connection with Shri Jagdish Prasad Purohit and was unaware of his business operations. The assessee also drew attention to the fact that Shri Praveen Kumar Agarwal and the other two named persons had themselves stated during the course of investigation that few of their listed companies were genuine companies. Since in these listed o companies as mentioned in their statements, there is neither the mention of the name of the assessee nor the name of company "Parag Shilpa Infrastructure Ltd." in which assessee has invested, there is no justification for relying on such statements recorded by the Investigation Wing, Kolkata to make the impugned addition. I find that the AO has not brought in direct evidences to show that the two/three above named persons were connected with business dealings with the assessee in any way. I also find that such reliance on statements of unrelated third parties that did not contain direct accusations against the assessee, makes the a....
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....el for the assessee It is admitted fact that the assessee had purchased 4,22,500 share of Swift IT Infrastructure & Services Ltd., (SITIT) @Rs. 10 per share, the physical delivery of which were received on 16/03/2012. We further note that later on the company, Swift IT Infrastructure Pvt. Ltd., was amalgamated with Parag Shilpa Infrastructure and Services Ltd. on the basis of sanction by Hon'ble Bombay High Court and the company was renamed as "Parag Shilpa IT Infrastructure & Services Ltd.". The physical shares of SITIT were sent for dematerialization with Karvey Stock Broking Ltd.,d on 11/03//2013. Thereafter, the foresaid shares were transferred to MPSE Securities Ltd., from where the sale of share was affected during the assessment year 2014-15 onwards. The assessee sold part of the share held during the assessment year 2014-15. We further note that the assessee had furnished all the details of sale purchase of shares i.e., name of company, amalgamation of company, details of sanction order of amalgamation from the Hon'ble Bombay High Court, new name of company, details of dematerialization, details of transfer of shares and furnished each and every details as and when desired ....
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....e Tax -Vs.- Shilpaben Harshil Deliwala, ITA no.967 of 2024, judgment dated 14/10/2024; iii) Tejash Ramesh Shah HUF -Vs.- Income Tax Officer, ITA no.5813-5814/Mum./2024, order dated 06/01/2025; iv) Gateway Leasing (P) Ltd. -Vs.- Assistant Commissioner of Income Tax & Ors., ITA No. 2518 of 2019, dated 11/03/2020; v) Vikram N. Chandan -Vs.- Income Tax Officer, ITA No. 70/Mum/2024 order dated 30/07/2024; vi) Archit Gupta -Vs.- Assistant Commissioner of Income Tax, ITA No. 2624-2625/Del/2022, order dated 30/09/2024; vii) Ahmed P. Surani -Vs.- Assistant Commissioner of Income Tax, ITA no.361/Mum./2024, order dated 30/09/2024; viii) Principal Commissioner of Income Tax -Vs.- Ziauddin A Siddique, IT no.2012 of 2017, judgment dated 04/03/2022 (Bom.); ix) Commissioner of Income Tax -Vs.- Shyam R. Pawar, [2015] 229 Taxman 256 (Bom.HC); x) Commissioner of Income Tax -Vs.- Smt. Jamnadevi Agrawal & Ors., [2010] 328 ITR 656 (Bom.HC); and xi) Principal Commissioner of Income Tax -Vs- Smt. Krishna Devi, [2021] 431 ITR 361 (Del. HC). 12. Accordingly, in the facts and circumstances of the case, we are of the considere....
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....e has made investment in shares amount to Rs. 20.61 crore and same were duly reflected in the books of account and also shown in the Balance Sheet as investment. It is admitted fact that the assessee had own capital is at Rs. 30.84 crore, as well as loans at Rs. 12.89 crore out of which loan amount of Rs. 11.70 crore was interest free loan. Thus the assessee had available with him a total sum of Rs. 42.54 crore as interest-free fund which is more than the investment made in tax free securities i.e., Rs. 20.61 crore. It is fact that the assessee also possessed excess interest free fund at Rs. 21.93 crore which was sufficient to make such investments. Hence, the assessee has claimed interest expenses at Rs. 17,07,743 only. Further examination of the interest paid show that the assessee paid interest to LIC at Rs. 14,86,720, interest on vehicle loan at Rs. 2,19,536 and bank commission and charges at Rs. 1,486 and same were duly reflected in the books of account of the assessee and also shown in the Profit & Loss Account of the assessee. It is clear, therefore, that the interest expenses claimed were not related to funds that were invested in shares and securities. It is also obvious t....
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.... crore which was sufficient to make such investments. Hence, the assessee has claimed interest expenses at Rs. 17,07,743/- only. Further examination of the interest paid show that the assessee paid interest to LIC at Rs. 14,86,720/-, interest on vehicle loan at Rs. 2,19,536/- and bank commission and charges at Rs. 1,486/- and same were duly reflected in the books of account of the assessee and also shown in the Profit & Loss Account of the assessee. It is clear therefore, that the interest expenses claimed were not related to funds that were invested in shares and securities. It is also obvious that since his own funds/capital available was Rs. 30.84 crore, these were utilized in making investment in tax free securities. Any disallowance under section 14A required finding of incurring of expenditure. Where it is found that for earning exempted income, no expenditure has been incurred, disallowance under s. 14A cannot stand. This is the ratio of the decision of High Court of Punjab & Haryana (2013) 361 ITR 0131 (P&H HC) in the case of Commissioner of Income Tax -Vs.- Deepak Mittal. 7.3 The AR has also argued that the assessee has own funds more than the average investment y....