AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 504
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....under section 148A (b) dated 26/3/2022 and subsequent initiation of proceedings under section 148 by the notice dated 19/4/2022 by the jurisdictional income tax Officer, international taxation Ward 2 (1), Bangalore is bad in law as in terms of amendment that was brought to The Income Tax Act by way of Finance Act, 2021 with effect from 1/4/2021 onwards, proceedings under section 148A of the act as also under section 148 of the act ought to have also been issued and proceeded in a faceless manner. ii. Without prejudice to the above, if the notice deemed to have been issued under section 148 of the act is prior to substitution of The Finance Act 2021 then the impugned reopening notice itself is bad in law as it is time barred. iii. That the learned AO erred in passing order under section 147 read with section 144 is bad in law and on notice under section 143 (2) was issued to the assessee or to the notice under section 142 (1) of the act as assessee has no access to the email id and has not received any message on registered mobile number. More so, the assessee's registered mobile number is 9446542185 through which assessee got PAN registration in India and the AO f....
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.... private limited companies and has provided loan to these companies long back. Shares of these companies were sold to One Dr v S Gopalan by entering a memorandum of Understanding. Assessee received consideration on sale of shares of Rs 1,81,03,143/- and loan repayments of Rs 77,11,696/-. This sum was credited through cheque in the bank account of the assessee and from that assessee has obtained time deposit receipts of Rs 2,20,00,000/-. 5. To substantiate the same Assessee produced details of holding of share capital and reconciliation of shareholding of Ahalia money exchange and financial services private limited for the financial year 2013 - 14, Ahalia exchange and travel private limited and Ahalia builders and developers private limited. The assessee also submitted his bank account with federal bank and Axis bank, Sources of the time deposit with Federal bank along. Assessee evidences the same with the transfer certificates of shares dated 26/9/2014, letter of confirmation of said transfer issued by the three companies on 27/9/2014. The assessee also submitted email communication of the respective company along with board resolution evidencing above transaction. Regarding uns....
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....or acquisition of Time deposit receipt are the proceeds from sale of shares and receipt of repayment of loan from those companies, which is not at all doubted. b. Shares were acquired long back and therefore as there is no increase in cost, shares were acquired at the cost of Rs 10/- each per shares, there is no reason to doubt it. This is also confirmed by the companies. c. Regarding genuineness, MOU with the buyer was produced it was accepted as it is and therefore the transaction of sale of shares is not at all doubted. For computation of capital gain, neither sale consideration and nor acquisition cost is doubted, the capital loss cannot deny. d. Confirmation of the Indian companies is submitted to shows repayment of loan, loans are depicted in the annual accounts of those companies, which is repaid, therefore noting more could have been produced. 8. Learned DRP held that that the transaction of sale of shares is itself not genuine which is clear from the observation of the ld AO because of uniform cost of acquisition of shares over the years and the lack of evidence to show that the sale value of the shares was determined based on market condition....
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....was submitted that only reason the sale consideration of Rs. 1.81 crores is not considered as the source of time deposit because assessee has failed to provide the fair market valuation of the shares at the time of sale. He submits that the enquiry was respect to the sources of the funds of time deposits is not with respect to the capital gain earned. He submits that the sum of Rs. 1,81,03,143/- is the undisputed sale consideration received by the assessee which was deposited in the non-resident external account with the federal bank received from the buyer Dr Gopalan. Out of that sum the sum of Rs 1,60,00,000/- was deposited for opening non-resident external fixed deposit account. Further the assessee had an outstanding loan available from Ahalia exchange and travels private limited of Rs. 172,961 and from Ahalia money exchange & financial services private limited of Rs. 75,38,735 aggregate to Rs. 7,711,696 which was also received from these companies. For these companies, the assessee has produced the Ledger account of the assessee as well as also the annual accounts of those company where the loans are shown as outstanding. These outstanding loans were repaid by these companies ....
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....ions of the ld DRP. Facts put in narrow compass shows that Assessee is an individual, non-resident assessee Residing in UAE was a director in three group companies holding its shares and the unsecured loan in those companies. It entered a MOU for sale of shares of Those companies with one MR Dr V S Gopalan. In terms of MOU, Assessee sold shares of those companies as under: - Name of the Company Number of shares Cost of Acquisition of shares Date of sale Sales consideration Capital loss Ahalia Money Exchange Financial Services Private Limited 4500 2,25,00,000 26/09/2024 1,66,83,112 58,16,888 Ahalia Exchange and Travels private Limited 100000 10,00,000 26/09/2014 9,86,831 13169 Ahalia Builders & developers private Limited 1000 10,00,000 26/09/2014 4,33,200 5,66,800 Total 245,00,000 1,81,03,143/- 63,96,857 18. To substantiate receipt of the consideration on sale of shares, assessee submitted MOU, bank statements, Confirmation of companies about transfer of shares and the bank statements. This sales consideration was deposited in Federal bank account and out of total sales conside....
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....dum of understanding with Buyers of the shares and bank accounts of assessee and confirmation of those companies. For verification of sources of deposit even other wise fair market value of shares is immaterial in absence of any other evidence with the ld AO. The Ld AO has not made any addition u/s 56 of the Act. It is also not the case of section 50 D of the act but addition u/s 69 of the Act. Further the cost of acquisition of the shares are also shown in the annual of those Indian private limited companies. The cost of acquisition of the shares is allotted price by those companies. Naturally in absence of any increase in the price of the shares or any cost of improvements claimed by the assessee, cost is bound to remain same till those shares are sold. Thus, addition u/s 69 of the act of FDR in Non- Resident External account of the assessee of Rs 2,20,00,000/- deserves to be deleted. Accordingly Ground no 4 of the appeal is allowed. 23. Similarly, as the ld AO has neither invoked provision of section 56, 50 D or section 55A, in absence of any further inquiry, as the annual accounts of those companies were available before him, without inquiring with the buyer when MOU was pro....