Pr. Commissioner of Income Tax Vs. Jatin investment Pvt. Ltd.

Question of law

Whether ITAT is justified in confirming deletion, of addition of Rs. 93,45,000/-received as sale proceeds of shares held as investments made under Section 68 of Income Tax Act 1961?

Facts of the Case

The assesse is engaged in trading of shares and security and in previous years acquired shares of some companies. Those were sold during the assessment year in question. The amounts received from sale of the shares were shown as receipts & Said transaction occurred in ordinary course of Business

The assesse for AY 2003-04 reported over 96,25,000/- as a receipt and for AY 2004-05 1,50,04,515/-. A notice under Section 147/148 was issued which led to the reopening of the assessment. The AO by his order added 93,45,000/- on his conclusion that various amounts received from 21 parties, as purchase consideration were suspect.

Contention of CIT (A)

1. The above amount were received as sale consideration of shares sold and not any new money has been introduced during the year under consideration either by way of loan or share capital. .. The perusal of the account of the company does not leave any room for doubt that the said amount was nothing but the sale proceeds of the shares which have already been shown by the Company in the profit & loss account for A.Y.2003-04 and the same has also been offered as income, it cannot be brought to tax again in the same A.Y. 2003-04 which is under appeal.
2. The identity of the purchasers of the shares was established as it was borne on the record of the Income Tax Department. The purchasers have PAN card as well. Turning to the shares which were sold by the Company as per its version, there is no evidence or material to even suggest, as pointed out as on behalf of the Company, that the cheques directly or indirectly emanated from the Company so that it could be said that the assessee’s own money was brought back in the guise of sale proceeds of the shares.
3. The A.O has not been done any independent Inquiry to verify Documents furnished by Company as evidence which he could have been done in his capacity under U/S 131 and 133 (6) of the Income Act, 1961.

As per above Contention of CIT (A), Income Tax Appellate Tribunal upheld the order passed by Appellate Commissioner.

Decision of High Court

In the opinion of honourable high court, no question of law arises; the appeals are accordingly Dismissed.

Date of Judgement/Order: 18^th January 2017