TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1430
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.... 3. First, we take the Revenue's appeal in ITA No.1639/Del/2023 for AY 2012-13. ITA No.1639/Del/2023 [Assessment Year : 2012-13] 4. Brief facts of the case are that assessee is an individual and e-filed his return of income on 14.07.2012 u/s 139(1) of the Act which was revised on 18.09.2012 on a total income of INR 1,00,78,090/-. This return of income was further revised at an income of INR 58,09,730/-. The reason for revision is that income from salary was reduced from 11,00,80,000/- to INR 60,48,000/-. The case of the assessee was taken up for scrutiny and after considering the submissions made from time to time, the order was passed u/s 143(3) dated 05.03.2015 wherein total income of the assessee was assessed at INR 6,48,62,564/-. 5. Against the said order, assessee filed an appeal before Ld. CIT(A) wherein assessee has filed certain additional evidences with respect to the cost acquisition of the shares sold during the year under appeal in support of the claim of Long Term Capital Loss ("LTCL") and Short Term Capital Loss ("STCL"). After considering eh additional evidences and obtaining the Remand Report from the AO, Ld.CIT(A) vide order dated 06.03.2023, partly allowe....
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....ared by the assessee. Ld.CIT DR further submits that for the first time, had submitted all the relevant details with respect to the purchase of shares which were considered by Ld.CIT(A) in para 6.21 to 6.23 of the appellate order and accepted the claim of the assessee. Ld.CIT DR submits that in the Remand Report, Ao has very clearly stated that such additional evidences with respect to the acquisition of the shares sold in the year should not be accepted as the assessee has failed to file any such details before the AO despite of giving various repeated opportunities. It is thus, submitted by Ld.CIT DR that the order of the AO be confirmed. 9. On the other hand, Ld.AR for the assessee submits that before the AO, the assessee has expressed its inability to produce documentary evidence with regard to the cost of acquisition of shares and had been in constant touch with the management of the company for getting relevant details. Ld.AR for the assessee submits that all these facts were duly informed to the AO and as soon such details were received by the assessee, the same were produced before Ld.CIT(A) as additional evidences. Ld.AR submits that the evidences being crucial in the n....
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.... page no 41 at para no 6.20 1.7 The details of demat account from where the 17,30,375 equity shares have been transferred on sale is given at page no 63 of the paper book 1.8 The sale of the said shares corresponds to purchase on 3 different dates, and since there has been scheme of arrangement between TV18 Broadcast Ltd and TV18 India Ltd-refer page nos 81 to 114 and 115-116 of the paper book, the cost of acquisition would change per the provisions of the Act. There have also been other corporate actions as well, details of which are given in the various statement giving the calculation of cost of acquisition of each sale given on page no 68 1.9 (a) The cost of acquisition of Tranche 1 that corresponds to the sale of 2,04,000 shares is given on page no 69 of the paper book and reference to the documents referred to therein are also given. (b) Similarly, the cost of acquisition of Tranche 2 that corresponds to the sale of 9,09,160 shares is given on page no 70 of the paper book and reference to the documents referred to therein are also given. (c) the cost of acquisition of Tranche 3 that corresponds to the sale of 4,86,178 shares is giv....
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....178 Taxman 144) has allowed reduction of salary holding that the reduction is in view of the provisions of Companies Act. In view of the above, the appellant submits that the ground of appeal of the Revenue be dismissed." 10. Heard the contentions of both parties and perused the material available on record. In the instant case, the sole issue is with regard to the cost of acquisition of shares sold during the year by the assessee and the year of acquisition to ascertain whether these shares were hold by the assessee for a period of more than one year and the gains as LTCG and further by considering the cost of acquisition to compute the index cost of acquisition for the purpose of computing the gains/loss on such transactions. 11. From the perusal of the orders of both authorities, we find that assessee has time and against submitted before the AO that relevant particulars are not available with him and he is trying his best to get details from the respective companies which is taking time. All these facts lead to filing of additional evidences before Ld.CIT(A) when same were collected by the assessee and produced in support of the LTCG/LTCL declared in the return of inco....
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....2 it can be seen that 5,00,000 shares of M/s. TV18 India Ltd. were originally allotted to the appellant in FY 2003-04 at a consideration of Rs. 7,60,00,000/- and the evidence of payment by the appellant is also furnished Further in FY 2004-05, through the scheme of preferential allotment another 5,00,000 shares were allotted to the appellant, for which evidence of payment is enclosed In FY 2006-07, 45,000 shares were transferred In FY 2006-07, 14 equity shares of FV5 were received as against 10 equity shares of FV10 of M/s. TV 18 India Ltd. Ld. AR submits that as on 01 04.2010 these shares of TV18 India Ltd converted in the shares of Mis. TV18 Broadcast Ltd., as an evidence to the same copy of Scheme of Arrangement is enclosed and para 8 of this Scheme has been resorted for the swap ratio of 25:17 between demerged company and the resulting company. Thus the appellant claims that the cost of acquisition of 9,09: 160 shares of M/s TVTB Broadcast Ltd should be taken as Rs 1,89,54,746/- In this regard Ld AR submits that is accordance to provisions of section 49(2C), 49(2D), the cost of acquisition of these shares should be Rs 1,89,54,746/- as against the original cost of acquisition of....
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.... has furnished the details of funding received by it and relevant bank statement indicating repayment of the same. Ld. AR submits that as on 01.04.2010 these shares of TV18 India Ltd converted in the shares of M/s TV18 Broadcast Ltd as an evidence to the same copy of scheme of arrangement is enclosed and para 8 of this scheme has been resorted for the swap ratio of 25:17 between demerged company and a resulting company. Thus the appellant claims that the cost of acquisition of 2,78,591 shares of M/s TV18 Broadcast Ltd. should be taken as Rs. 3,27,95,025/-. In this regard, Ld. AR submits that in accordance to provisions of section 49(2C) 49(2D), the cost of acquisition of these shares should be Rs. 3,27,95,025/- as against the original cost of acquisition of Rs. 6,55,50,720/- as on date of purchase. Out of this Tranche of 2,78,591 shares, 1,05,337 shares have been sold and cost of acquisition has been computed proportionately. Further for the computation of period, Ld AR draws attention towards definition of short term capital asset given in section 2(42A), in which in Explanation-1(g), it is stated that in case of a capital asset, being a share in an Indian company, which becomes t....
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....riginally shares of TV18 India Ltd have been allotted to the appellant his wife and further as on 01.04.2010, the same are converted into shares of M/s TV 18 Broadcast Ltd. (this name was with effect from 17.05.2011 and before that is name was IBN18 Broadcast Ltd.) through scheme of arrangement which involved demerger of M/s TV 18 India Ltd. in accordance to provisions of section 49(2C) and 49(2D) of IT Act cost of acquisition has been determined by appellant and the same has been accordingly reduced. However in accordance to definition of short term capital asset given in section 2(42A), in which in Explanation-1(g), it is stated that in case of a capital asset, being a share in an Indian company, which becomes the property of the assessee in consideration of a demerger, there shall be included the period for which the share was held in the demerged company, the benefit of period has been claimed by the appellant and the same needs to be allowed. 6.22 Pursuant to above observations, the claim of loss of Rs 9,48,41,241/- is changed as under In the light of above computation, Long Term Capital Loss of Rs 9,06,72,358 determined. However in the matter of transaction ....
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....riod October, 2009 to December, 2012. Ld.AR for the assessee submitted that assessee has not received the amount of INR 40,32,000/- as salary for the year under appeal. Therefore, the return of income was modified accordingly, actual income was offered for tax. For this, he placed reliance on the judgement of Hon'ble Delhi High Court in the case of Raghunath Murti [2009] 178 taxmann.com 144 (Del.). 16. Heard the contentions of both parties and perused the material available on record. In the instant year, the assessee was paid salary in excess of permissible limit and the same was recovered in terms of the provision of Companies Act under the order of Central Government. Ld.CIT(A) duly considered these facts and deleted the additions. Under identical circumstances, Hon'ble Delhi High Court in the case of Raghunath Murti (supra) has held as under:- 6. "Being aggrieved, the revenue preferred an appeal before the Income-tax Appellate Tribunal. The Tribunal, by virtue of the impugned order, has accepted the finding, returned by the Commissioner of Income-tax (Appeals) and has rejected the plea raised by the revenue. The Tribunal noted that the assessee being the Managing Di....
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....the said authorities have returned a finding of fact that the refund of Rs. 10,17,112 was neither voluntary nor was it for any extraneous consideration and that the refund was made merely with a view to comply with the provisions of the Companies Act, 1956. In these circumstances, the view sought to be canvassed by the revenue cannot be accepted and was rightly rejected by the Tribunal. No substantial question of law arises for our consideration. The appeal is dismissed." 17. By respectfully following the judgement in the case of Raghunath Murti (supra) and further looking to the fact that amount of INR 40,32,000/- was recovered from the assessee in compliance of the Central Government therefore, the same cannot be held as the income of the assessee and accordingly, we find no infirmity in the order of Ld.CIT(A) which is hereby, upheld. Ground of appeal No.2 raised by the Revenue is hence, dismissed. 18. In the result, appeal of the Revenue is dismissed. 19. Now we take Revenue's appeal in ITA No.1640/Del/2023 for AY 2020-21. ITA No.1640/Del/2023 [Assessment Year : 2020-21] 20. Brief facts of the case are that the appellant is an individual and filed his return of in....
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....he beneficiary cum protector of a trust namely R B Trust had credited in Isle of Man in the year 2016 who has made investment in R B Property Corporation who acquired the said property in US. Ld.CIT DR submits that AO has asked to assessee to file the source of such investments. Ld.CIT DR submits that the assessee has himself accepted that he is beneficial owner and protector of the R B Trust who has made investment R B R K Investment P.Ltd. who further made investment in R B Proprietor Corporation and in terms of R B Proprietor Corporation purchased the property at US therefore, the immediate source of the payment of sale consideration of the said property has paid needs to be examined and however, the assessee has not filed any proper details of the source of such investment therefore, AO has rightly made the addition of this amount in the hands of the assessee which order deserves to be upheld. 24. On the other hand, Ld.AR for the assessee vehemently supported the order of the Ld.CIT(A) and drew our attention to para 6.8 of Ld.CIT(A)'s order wherein a table produced by Ld.CIT(A) of the total investments made in Trust, R.B. Trust at Isle of Man wherein total nos. of CRPSs was ....
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....42 to 645 and Shri Subhas Bahl at pages 692 to 697 wherein all the investments made CRPSs of R B Trust were reflected. 26. Heard the contentions of both the parties and perused the material available on record. As observed above, AO had made the addition for the reason that assessee has not been able to substantiate the source of investment in the said property acquired in US for INR 26,45,38,040/-. Ld.CIT(A) observed that assessee has not made any direct investment in the said property and he is only the beneficial/protecter in R B Trust of ISL of MAN who holds complete voting rights in R B R K Investment, U.K. In turn R B R K Investment Ltd. made investment in R B Property Corporation, USA who purchased the said property. Therefore, the funds received by R B Trust and R B R K Investment Ltd., UK were utilized for the purposes of property and all these facts were duly appreciated by Ld. CIT(A) in para 6.3 to para 7 of the appellate order which are reproduced as under:- 6.3 "In the assessment order, Ld AO states that the appellant acquired immovable property in USA at Unit PH 1A, 10 West Street, New York on 20.09.2019 for total consideration of Rs 26,45,38,040/- Sh Ragh....
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....were transferred to Bank account of RBRK, Barclays UK and ultimately to RBRK CRPS Further Ld. AO states that the appellant had also given gift of Rs. 5,00,00,000/- to Ms Tara Bahl on 25 07.2017 which was routed through various bank accounts and finally transferred to RBPC US. Similarly, the appellant had given gift of Rs. 1,80,00,000/- to his son Sh Vidur Bahl on 19.03.2019. The funds were then transferred through different channels to his Barclays UK account. Also on 14.08.2019, the appellant had taken loan from IL which was ultimately transferred to RBRK CRPS Similarly in case of Smt Subhash Bahl the assessee had gifted her Rs 1,80,00,000/- on 19.03.2019 which was transferred through different channels to her Barclays UK a/c. And the appellant had taken loan of Rs. 3.60,00,000/- from IIFL which was ultimately transferred to RBRK CRPS. 6.5 Thus from the fund flow analysis, Ld. AO concludes the funds actually belonged to the appellant Sh. Raghav Bahl only and over time and through various bank accounts these funds have been transferred to the accounts of Ms Tara Bahl, Sh Vidur Bahl and Smt. Subhash Bahl and ultimately the funds have been transferred to RBRK, UK Th....
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.... creditworthiness of his family members as well as all the entities like RB Trust, Isle of Man, RBRK UK and RBPC US 6.6 Ld. AO states that the appellant failed to furnish necessary supporting documentary evidences to back the numerous claims made in his replies And since the appellant is the beneficial owner of the property purchased in US for Rs 26,45,38,040/- and as he failed to furnish the required documentary evidences to justify the source of investment in the said property, the amount of Rs 26.45.38.040/- was treated as unexplained investment in property and added as deemed income u/s 69A of IT Act 1961 r.w.s. 115BBE of IT. Act 1961. 6.7 On the other hand Ld. AR submits that the appellant had acquired the beneficial interest in said property situated at New York, USA being the beneficiary / protector of M/s RB Trust, Isle of Man (hereinafter referred as 'RB Trust, IOM) which holds complete voting rights in M/s. RBRK Investment Limited, UK (hereinafter referred as RBRK, UK) whereas said RBRK, UK had invested in M/s RB Property Corporation, USA (hereinafter referred as RBPC, USA) for the purchase of impugned USA Property, whereas, it is on record that the ....
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....ted to RBPC, USA was attached in the Paper Book) Subsequently, on 12.07.2019. RBPC, USA entered into a contract of sale with Mr. Philip Giordano and Mrs. Madeline Giordano for purchase of property located at Unit PH1A, 10 West Street. New York, USA for a consideration of USD 36,00.000 plus other ancillary charges and taxes. Thereafter, RBRK, UK transferred complete purchase consideration into the escrow account in USA for execution of said transaction on behalf of RBPC, USA whereas RBPC. USA issued common voting stock in favor of RBRK, UK on premium Pertinently, total amount of investment made by RBRK, UK in respect of acquisition of said USA Property through RBPC, USA was USD 37,10,497 equivalent to Rs 26.45.38.040/- Detail of payment made by RBRK, UK to vendor in USA is as under:- S No. Particulars Amount (In USD) Amount (In INR) 1. Down Payment on 17.07.2019 1,80,000 1,28,33,008 2. Tranche 1-Paid on 17.09 2019 28,00,000 19,96,24,569 3. Tranche 2-Paid on 18.09.2019 7,15,613 5,10,19,248 4. Tranche 3-Paid on 19.09.2019 27,216 19,40,329 5. Excess amount refunded from said Escrow Account on 16.10.2019 12,331 (8,7....
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.... Schedule FA of ITK filed by him for the period under consideration, for the sake of reporting of foreign assets held as beneficial owner by him during the period under consideration, since the appellant is a beneficiary of M/s RB Trust, Isle of Man which holds direct interest in RBRK UK whereas RBRK, UK holds financial interest in USA entity le RBPC, USA which holds said property in New York. USA directly. As an evidence copy of ITR filed u/s 139 of IT Act for the period under consideration by the appellant was furnished. 6.12. Ld AR submits that the appellant had duly explained the source of funds in the hands of RBRK, UK which were utilized for making impugned investment in said USA Property Pertinently, the appellant had filed specific details alongwith supporting documentary evidences to illustrate the actual source of funds in the hands of Ms Tara Bahl Sh Vidur Bahl and Late Smt Subhash Bahl, who had cumulatively invested funds to the tune of USD 19,90,022 in RBRK, UK during the period under consideration Whereas, in order to substantiate the source of remaining fund invested in said USA Property by RBRK UK the appellant had duly brought on record the Financial State....
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....incorporated M/s RBRK Investment Ltd in LUK in 2016 and M/s RBRK Investment Ltd. UK incorporated a corporate entity in USA on 11.07.2019 in the name of M/s. RB Property Corporation, USA and on 12.07 2019 M/s RB Property Corporation USA entered into a contract of purchase of property located at unit PH-1A, 10, West Street, New York for a consideration of Rs. 26,83.83.365/-by RBRK Investment Ltd. into equity shares of RB Property Corporation. In the assessment proceedings, the appellant has furnished all the requisite documents to clarify the source of this investment. In the light of these facts it is clear that no addition can be made u/s 69 or for that matter u/s 69A of IT Act when source of investment has been clearly explained by furnishing all documentary evidences and explaining fund flow in this regard. Therefore, the addition made by Ld.AO amounting to Rs. 26,45,38,040/- cannot be sustained. With this observation, various grounds of appeal are disposed off accordingly." 27. Before us, Ld.CIT DR for the Revenue simply retained the allegations made by the AO in the assessment order and no make out the case whether the source of the said investment made by assessee and his f....