The Principal Commissioner Of Income Tax-3 v. R J Tradelinks Pvt Ltd

IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/TAX APPEAL NO. 207 of 2020 ========================================================== THE PRINCIPAL COMMISSIONER OF INCOME TAX-3 VersusR J TRADELINKS PVT LTD ========================================================== Appearance:MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE THE CHIEF JUSTICE MR. VIKRAM NATHandHONOURABLE MR. JUSTICE J.B.PARDIWALA Date : 17/09/2020 ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) This appeal under Section 260-A of the Income TaxAct, 1961 (for short “the Act, 1961) is at the instance of theRevenue and is directed against the order passed by theIncome Tax Appellate Tribunal, Ahmedabad Bench dated15-11-2019 in the ITA No.1715/Ahd/2012 A.Y. 2008-09.The Revenue has proposed the following substantialquestions of law for the consideration of this Court:- “[A] Whether the Appellate Tribunal was correct inlaw and on facts in upholding the order of CIT(A)deleting the addition made under section 68 of the Actand alternate addition under section 41(1) of the Act ofRs.6,75,00,000/- even though the alleged creditor,Radharamana Holdings Pvt. Ltd. had denied transaction of sales of shares to the assessee?” [B] Whether the Appellate Tribunal was correct inlaw and on facts in holding that 5 lakh shares ofParsoli Corporation Ltd. were purchased throughParsoli Corporation Ltd, even though these transactionswere not declared in audited books of accounts of theassessee and these transactions were also tocircumvent SEBI Rules” We take notice of the fact that the Tribunal has recorded afinding of fact with regard to the transactions of theassessee with the Parsoli Corporation ltd. We quote therelevant portion as under:- “It is also submitted that there is no cessation of liabilityu/s. 41(1) of the act since the correct position wasconfirmed by the Parsoli Corporation ltd. The assesseehas furnished actual evidences in the name of correctparty i.e. Parsoli Corporation Ltd before CIT(A) foradmitting as additional evidences under Rule 14(6A) ofthe I.T. rule 1961 stating that the said additionalevidences were required to be admitted to decide theissue on the basis of correct fact of the case. It was alsosubmitted that the assessing officer has made inquiryonly in the last two weeks prior to the limitation periodand issued a show cause to the company on the basis ofdenial of Radharaman Holding Pvt. Ltd. vide their relydated 27[th] December, 2010. Therefore,the assesseecould not place the correct facts and evidences beforethe assessing officer in the short available period ofthree days. In view of the above facts, the assessee hascontended before the ld. CIT(A) that it was prevented bysufficient cause for producing the aforesaid facts and evidences before the assessing officer and requested toadmit the same as per provision of rule 46 of the IT Rule1962. Therefore, the ld. CIT(A) has admitted suchevidences for the sake of substantial justice to decidethe issue on merit. The ld. CIT(A) has called remandreport from the assessing officer. The content of theremand report submitted by the assessing officer areelaborated at page no. 22 to 25 in the order of CIT(A). Inthe remand report, the assessing officer has submittedthat in view of the facts and circumstances, the mattermay be decided on merits as the facts during theassessment was contrary to the appellate proceedings.Considering the above facts and findings of ld. CIT(A), itis undisputed fact that assessee has purchased 5 lacsof shares of Parsoli Corporation for a consideration ofRs. 6.75 crore through Parsoli Corporation Ltd. who isalso a registered share broker with the BSE and out ofthese shares 4200 were sold during the year underconsideration and the assessee has declared short termcapital gain of Rs. 21,82,462 on the sale of theseshares. The ld. CIT(A) has categorically established inhis findings that these shares issued were notpurchased from Radharaman Holding Pvt. Ltd. but 5lacs shares of Parsoli Corporation Ltd. was purchasedthrough Parsoli Corporation Ltd. and these transactionswere not correctly declared in the books of account ofthe assessee as one of the directors of the assesseecompany was a relative of the director of ParsoliCorporation Ltd. for the reason of apprehension of actionfrom SEBI. Considering the fact and circumstances, wedo not find any reason to interfere in the finding of ld.CIT(A), therefore, the appeal of revenue is dismissed.” Having heard Mr. M.R.Bhatt, the learned SeniorCounsel appearing with Ms. Mauna Bhatt, the learnedSenior Standing Counsel for the Revenue and having gonethrough the findings recorded by the Tribunal, we are of the view that the question proposed cannot be termed as asubstantial question of law. In the result, this appeal failsand is hereby dismissed. (VIKRAM NATH, CJ) NAIR SMITA V./Radhan (J. B. PARDIWALA, J)