TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1436
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.... that the appellant filed Income Tax Return u/s 139(1) and the return was processed u/s 143(1) of the Act. The selection of the case under scrutiny is the prerogative of the Income Tax Department. The reason for not putting the case under scrutiny cannot be the ground for alleging that the appellant did not make full and true disclosure of facts which entitled the Revenue Officer for initiating the proceeding u/s 147 of the Act. 2. The Ld. CIT(A) erred on facts and law in upholding the Order dated 28.03.2013 passed by the Assessing Officer wherein the objections filed by the appellant, challenging the initiation of proceedings u/s147 of the Act were rejected arbitrarily. Without prejudice to ground no 1 and 2 3. On the facts of the case and as per law, the Lid CITIA) erred in upholding the arbitrary order of the Ld. Assessing Officer in disallowing Short Term Capital Loss of Rs 27,92,30,441/-, incurred in sale of commercial FSI in Sirsa Project & sale of 4659 shares of Mansarover Heritage Inn Private Limited, merely on his whims and fancy. The Ld. CIT (A) erred in upholding the Order of the Assessing Officer who challenged the business prudence of the appellant without any co....
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.... Engineers Put. Ltd. for Rs. 28,88,58,000/- on 13.05.2009 @ Rs. 62,000/- per share at prevailing market rate at that time. Later on, due to sluggishness in real estate market, the assessee sold those shares for Rs. 13,51,11,000/- to Mr. Rajesh Chaudhary as the assessee was not finding any buyer, for those shares, in the market. As a result, the assessee suffered the STCL of Rs. 15,37,47,000/-. The assessee had not received any sale consideration from Mr. Rajesh Chaudhary till the finalization of the assessment. Mr. Rajesh Chaudhary sold those shares to M/s Era Landmarks Ltd. for Rs. 13,51,11,000/-. 3.2 Further, the assessee also purchased commercial FSI in Sirsa Project for Rs. 18,57,50,000/- on 18.04.2009 from M/s Goglet Infotech Pvt. Ltd. @ of Rs. 66,000/- sq. ft. at prevailing market rate at that time. Later on, due to sluggishness in real estate market, the assessee sold commercial FSI in Sirsa Project for Rs. 6,00,00,000/- to Mr. Subhash Chaudhary as the assessee was not finding any buyer, for the commercial FSI in Sirsa Project, in the market. As a result, the assessee suffered the STCL of Rs. 12,57,50,000/-. The assessee had not received any sale consideration from Mr. Subh....
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....asis of valuation that how the price of both the transactions determined and what was the hurry to enter into such a transaction that would result into a loss of Rs. 27,94,97,000/- and for which no payment has been received till 31.03.2011. The whole chain of transactions was entered into just to set off of the capital gains arising on the shares of M/s Era Infra Engg. Ltd. This is evident from the perusal of the chain of transactions. The first transaction regarding the FSI was entered into buy the assessee with M/s Goglet Infotech Pvt. Ltd. which is a group concern of M/s Era Group. Then subsequently the FSI was sold to Sh. Subhash Chaudhary. The assessee has submitted that it could not find a prospective buyer who could purchase this development right. Since, the funds of the company were blocked and there was no hope for immediate recovery of real estate market, the company decided to sell these development rights to Sh. Subhash Chaudhary who had shown his willingness to purchase these rights for total consideration of Rs. 6,00,00,000/-. The contention of the assessee is wrong. No funds of the assessee were blocked. Infact no payment was made by the assessee to M/s Goglet Inf....
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....s transaction is a sham transaction and was just entered to set off the short term capital gains to reduce the tax liability. Similarly, the transaction regarding the shares was entered into by the assessee with M/s Complete Engineers Pvt. Ltd. Then subsequently the shares were sold to Sh. Rajesh Chaudhary. The assessee has submitted that it could not find a prospective buyer who could purchase the shares and the market condition was not good. Since, the funds of the company were blocked and there was no hope for immediate recovery of real estate market, the company decided to sell these shares to Sh. Rajesh Chaudhary who had shown his willingness to purchase these rights for total consideration of Rs. 13,51,1 1,000/-. The contention of the assessee is wrong. No funds of the assessee were blocked. Infact no payment was made by the assessee to M/s Complete Engineers Pvt. Ltd. at the time of transaction. The payment of this transaction was made by the assessee on 06.10.2009 after the payment was received from M/s Moti Lal Oswal Securities Ltd on 05/10/09 Ltd. The assessee has not provided any evidence/information regarding the circumstances that required immediate funds. It is pert....
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....apital losses and the resultant capital losses of Rs. 2,66,559/- have been carried forward. As discussed above, the assessee is not being given the credit of the losses. Hence Rs. 27,92,30,441/- is added to the income of the assessee and loss of Rs. 2,66,559/- is not allowed to be carried forward." [Emphasis supplied.] 3.4 Aggrieved with the assessment order, the assessee filed appeal before the Ld. CIT(A), who dismissed the appeal as under: "11 I have considered the facts of the case, written submissions of the appellant, including the various case laws relied upon by the appellant and the findings given by the Assess1ng Officer on this issue. On considering the facts of the case, I find that the transactions in respect of the sale of commercial FSI in Sirsa Project and sale of shares of M/s Mansarover Heritage Inn Pvt. Ltd, were arrangements made by the appellant between these parties to reduce its tax burden. It is pertinent to note that the appellant M/s Victory Realtech Pvt. Ltd M/s Goglet Infotech Pvt. Ltd, and M/s Big Ben Developers Pvt. Ltd. are all Era group companies and they used Sh Subhash Chaudhary in respect of transaction of commercial FSI in Sirsa Project and S....
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....velopers Pvt and Ltd to whom said Sh. Subhash Chaudhary had transferred his rights in the FSI project M/s Era Landmarks Ltd. to whom Sh. Rajesh Chaudhary had transferred his rights in shares had not made any payment to the appellant till the time of completion of the assessment. Even the appellant had not made any payment to the companies from whom he had purchased the Development Right in Sirsa project and shares. This itself shows that there was also no scarcity of funds which compelled the appellant to sell its project and shares at a throw away price and suffered a huge loss to the tune of Rs. 27,94,97,000/-. 11.11 In view of the above discussion I am of the view that the Assessing Officer has rightly held that the transactions entered into by the appellant under Development Right Sale Agreement and Share Purchase Agreement were sham transactions used as a device to give colour of genuineness to a fictitious transaction. Therefore, considering these facts of the case, I hold that the Assessing Officer was justified in disallowing the short term capital loss of Rs. 12,57,50,000/- on sale of development right in commercial project in Sirsa and Rs. 15,37,47,000/- on sale of shar....
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.... of Sirsa Projects and shares of M/s Mansarover Heritage Inn Pvt. Ltd. purchased were negative at the time of purchases and sales thereof. He questioned the pricing of the commercial FSI rights of Sirsa Project and shares of M/s Mansarover Heritage Inn Pvt. Ltd. by submitting that these transactions were arranged. How purchases and sale of these assets would take place through journal entries rather than actual exchange of money. The self-serving documents evidencing such transactions could not determine the pricing at the time of purchases and sale of these assets particularly when the net worth of these companies at the time of purchases and sale of these assets were in negative. 7. We have heard both parties and have perused the material available on record. We find that the License No. 190 of 2007 granted by Haryana Govt. & Country Planning to VPN Buildtech Pvt. Ltd. and VPN Buildcon Pvt. Ltd. was valid upto 27.06.2009. The said license was not cancelled but extended upto 26.06.2013 as evident from the following scanned copy of the letter of Directorate of Town and Country Planning, Haryana: Directorate of Town and Country Planning, Haryana SCO No. 71-75, 2nd Floor, Sector-1....