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2010 (2) TMI 120 - HC - Income TaxUnexplained cash credit – book adjustment – sham transaction The assessee company during the relevant year was engaged in the sale and purchase of shares held as investment. According to the assessee it had sold shares of Vikas Fitting Ltd to Ramesh Chand Industries Ltd and shares of M/s Ocean Infrastructure Ltd to M/s Silver Streaks Trading Pvt. Ltd. These shares had been purchased during the financial year 1997-98 by the assessee and were reflected in the audited financial statements. According to the assessee, since M/s Ramesh Chand Industries Ltd was having a current account with M/s Silver Streaks Trading Pvt. Ltd., both companies agreed to adjust the amount internally. As a result of this adjustment, the entire amount towards sale of the shares became payable to the assessee by M/s Silver Streaks Trading Pvt. Ltd. - The Assessing Officer, however, treated the amounts as unexplained cash credit and, therefore, added the amount to the income of the assessee company as unexplained cash credit. – held that - the Tribunal came to the conclusion that it was clear that the assessee company had been holding the shares which were sold by it during the year and that it was on this basis that the learned Commissioner of Income Tax (Appeals) had arrived at a conclusion that there was no reason to hold that the assessee company did not own these shares. Therefore, the Tribunal observed that there was no reason to hold these transactions to be sham transactions or the credits to be unexplained cash credits - The findings arrived at by the Tribunal are pure findings of fact and we do not find any error in them – decided in favor of assessee
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