TaxTMI 
TaxTMI 
2026 (1) TMI 1377
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....ngs against the assessee on the issue of Long Term Capital Loss carried forward, when in fact both of them have categoricaly disagreed with the submissions made by the assessee." (ü) "Whether on the facts and in the circumstances of the case, the CIT(A) erred in holding that both the Assessing Officers in their remand reports have not filed further objections/ observations on the issue implying that submissions of the appellant has been accepted where in fact both of them have categorically disagreed with the submissions made by the assessee in no uncertain terms on the issue of LTCL carried forward." (iii) "Whether on the facts and in the circumstances of the case and in law, Ld. CIT(A) erred in holding that the purchase of shares have been explained where in fact the AO in his remand report dated 05.03.2024 has stated that the assessee has not submitted demat account statements regarding purchase of shares." (iv) "Whether on the facts and in the circumstances of the case the CIT(A) erred in holding that the sale of shares have been explained where in fact the AO in his remand report dated 05.03.2024 has expressly stated that the rationale behind sa....
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....s proceeded to disallow the claim of loss. However, on merits, the assessee furnished certain additional evidences along with his submissions in support of claim of LTCL. The first appellate authority forwarded the submissions and additional evidences furnished by the assessee for verification of the A.O. and submission of a remand report. The remand report furnished by the A.O. was again confronted to the assessee. In response to the said remand report, the assessee furnished further additional evidences including a valuation report on the market value of shares as on the date of sale. The fresh evidences furnished by the assessee were again forwarded to the A.O. seeking verification and comments. After verifying the valuation report and submissions of the assessee, the A.O. again furnished a remand report with his comments. Based on the submissions made by the assessee, evidences furnished and the remand reports of the A.O., the first appellate authority finally concluded that LTCL claimed by the assessee on sale of shares is allowable. 7. Before us, learned Departmental Representative (ld. DR for short) while contesting the decision of first appellate authority relied on writ....
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....ished all requisite documentary evidences such as demat account, both for purchase and sale of shares, agreements with the purchaser, valuation report and various other documentary evidences. He submitted, though the A.O. had ample time to go through the evidences, however, even after verifying the evidences, he did not make any adverse observations with regard to valuation of the shares at the time of sale. He submitted, the allegation of the A.O. that the assessee did not furnish the demat account indicating the purchase of shares by the assessee, is not borne out from record as the assessee did furnish such evidence. He submitted, the observations of the A.O. in the remand report are general in nature. Hence, Revenue's case does not turn on such observations of the A.O. 9. Strongly objecting to various contentions of the ld. DR, the ld. Counsel submitted, the department is trying to provide a new dimension to the entire dispute by alleging use of colorable device by the assessee to claim LTCL as the A.O. has never made such allegation, either in the assessment order or in the remand reports. He submitted, even the department is relying upon documents which the A.O. never cons....
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....r Pvt. Ltd. (SP Solar), TN Solar Power Energy Ltd., Solar Edge Power Ltd. and Universale Mine Development Ltd. After prolonged negotiations and due diligence the shares were sold to M/s Terra Asia Holdings Pte. Ltd., a company incorporated in Singapore and part of KKR group of USA, for a total consideration of Rs. 230 crores, out of which the assessee received an amount of Rs. 39.25 crores, as against the purchase cost of shares at Rs. 202.19 crores. This resulted in LTCL of around Rs. 183 crores. In the return of income filed for the assessment year under dispute, the assessee claimed such LTCL. It is evident, the A.O. has rejected assessee's claim of LTCL primarily on the reasoning that the assessee failed to furnish the requisite documentary evidences for enabling the A.O. to verify the genuineness of the claim. However, before the first appellate authority, the assessee furnished voluminous documentary evidences to justify its claim of LTCL on sale of shares. The submissions made by the assessee and documentary evidences furnished were forwarded to the A.O. for verification and comments. Vide letter dated 05.03.2024, the A.O. furnished the first remand report which was confront....
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....s on 24.06.2024 and the AO submitted the remand report on 26.06.2024. (xv) The appellant had requested for personal hearing through video conferencing. Considering the request of the appellant, VC was scheduled for 03.07.2024 at 3:30PM. This office on the scheduled date and time tried to conduct the personal hearing through VC. However, when the link provided for the same was opened, it kept showing technical error. Therefore, the VC could not be conducted despite several attempts as the technical error kept popping up. Accordingly, the VC was rescheduled for 08.07.2024. On 04.07.2024, the appellant submitted that it kept waiting for the VC to start on the scheduled date and time. Further, the appellant vide the said letter requested for copy of remand report dated 26.06.2024 and requested that VC be rescheduled only after sharing the remand report. In response, vide letter dated 04.07.2024, the appellant was informed about the technical issued faced while starting the VC. (xvi) Also as per the appellant's request remand report dated 26.06.2024 was shared. The appellant was also given the option that if the VC needs to be rescheduled from 08.07.2024, the same be i....
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....s on face value @ Rs. 10 per share but has sold much below the purchase price. As per Computation Statement provided by assessee, it is seen that the assessee sold shares on 22.10.2020 at a very low price which is stated to be Net Asset Value as on date. The NAV value ranged from 1.48 to 2.66 which were substantially lower than the face value of the said shares. But the sale being an off market private sale, the onus was clearly on the assessee to prove the correctness or the adequacy of the consideration. However, the assessee has not provided documentary evidences which formed the basis for determining the share value at very low price. The valuation is also not backed by documentary evidences such as valuation report as required by Income Tax Act, 1961. The onus on the part of the assessee will not be deemed to be discharged by merely filing certain documents before the tax authorities, but the assessee would have to go further to justify the rationale of such transactions in order to prove that the transaction has not been entered as a colourable device. 3) Regarding the proof for purchase of shares, the assessee has not submitted the bank statement copies of all the s....
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....s the earlier name of the assessee was M/s. Praddin Energy Private Limited, in whose account the parent company transferred the fund, which in turn, was utilized for purchase of shares of TN Solar Power Energy Ltd. The second allegation of the A.O. that demat account of the purchase period was not furnished is equally misplaced, as the said demat account was furnished before the first appellate authority and is part of the paper book submitted before us. On perusal of the said demat account, placed at pg. no. 172 of the paper book, it is evident that the purchase of shares from the group entities are clearly reflected. Thus, the allegations of the A.O. regarding non-furnishing of requisite documents is not borne out on record. After the assessee furnished the valuation report, the first appellate authority forwarded the same to the A.O. for verification and offering his comments. In the second remand report, filed by the A.O., the comments with reference to the valuation of shares are as under: 3. Disallowance of carry forward of Long Term Capital Loss to the tune of Rs. 1,83,00,38,564/-. Comments of the AO: In this regard, the erstwhile JAO, i.e. DCIT, Corporate ....
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....as per valuation report dated 22.02.2021 (Page No. 59-90 of PB 1) Sale consideration as per agreement Sale value per share Solar Edge Power & Energy Private Limited Equity (-) 37,56,000 6,37,00,000 (-) 0.06 1.00 16,93.33.358 2.66 Shapoorji Palloonji Solar PV Private Limited Equity (-) 1,77,00,000 4,05,00,000 (-)0.44 1.00 6,00,96,473 1.48 TN Solar Power & Energy Private Limited Equity 1,14,00,000 4.35,00,000 0.26 0.26 6,11,85,074 1.4 Universal Mine Developers & Service Providers Pvt. Ltd. Equity (-) 36,00,000 4,69,01,000 (-)0.08 1.00 7,04,20,412 1.50 Solar Edge Power & Energy Private Limited Equity (-) 37,56,000 93,10,000 (-)0.40 1.00 2,47,48,722 2.66 Shapoorji Palloonji Solar PV Private Limited Preference N.A. 70,000 N.A. N.A. 1,03,868 1.48 TN Solar Power & Energy Private Limited Preference N.A. 47,30,000 N.A. N.A. 66,52,997 1.4 TOTAL 39,25,40,904 16. A careful analysis of the chart clearly demonstrates that the sale value per share of the com....