Mumbai v. M/S Rupee Finance & Management

IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL No. 1208 OF 2008. INCOME TAX APPEAL No. 1208 OF 2008. INCOME TAX APPEAL No. 1208 OF 2008. Commissioner of Income-tax-7 Mumbai. ..Appellant. Vs M/s Rupee Finance & Management Pvt Ltd. Mumbai. ..Respondent. Mr Suresh Kumar, Advocate for the Appellant. Mr K. Shivram a/w Mr Paras Savla, Advocate for the Respondent. CORAM: Dr.S. RADHAKRISHNAN CORAM: Dr.S. RADHAKRISHNAN AND V.C.DAGA, JJ. AND V.C.DAGA, JJ. DATED: 20th OCTOBER, 2008. DATED: 20th OCTOBER, 2008. P.C.: P.C.: ---- ---- 1. Heard the learned counsel for the appellant and the learned counsel for the respondent. 2. The above appeal raise following questions of law: 1. Whether on the facts and in the circumstances of the case the Tribunal was correct, in law, in allowing the appeal of the assessee by holding that no addition is sustainable u/s 69 on the purchase of shares at a price much lesser than the market price? 2. Whether on the facts and in the circumstances of the case the Hon’ble Tribunal was justified in law in holding that mere purchase of shares as an investment, with the lock in period of holding, for a consideration which is less than the market value, cannot be brought to tax, as a ‘benefit’ or ‘perquisite’ u/s 28 (iv) disregarding the fact that the assessee had pledged these shares at market price and obtained loan of Rs.49.75 crores? 3. We have perused the Tribunal’s judgment. The Tribunal has considered the entire issue at length in its order dated 5.2.2008 and has given finding that mere purchase of shares, as an investment, with the lock in period of holding, for a consideration which is less than the market value, cannot be brought to tax, as a benefit or perquisite under Section 28 (iv) of the Act. The Tribunal has also given the finding that the assessee has not secured any benefit or perquisite in consideration of a business transaction undertaken with the sellers of the shares. In view of above finding of fact, there is no substantial question of law involved in the present appeal. 4. We do not find any case made out for admission of the above appeal. Appeal is, therefore, dismissed.