9911796707
TMI Blog2012 (7) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The assessee herein is a partnership firm. The return originally filed by the assessee was accepted under Section 143(3) of the Income Tax Act. Subsequently, while scrutinising the assessment for the assessment year 1988-89, it was found that the assessee had claimed short term capital loss on sale of shares for the assessment year 1987-88, which was identical to that of the assessment year 1988-89. Accordingly, the assessment for assessment year 1987-88 was sought to be reopened under Section 147 of the Income Tax Act. The assessee went on appeal before the Commissioner of Income Tax (Appeals), who found the modus operandi adopted to purchase the shares of the Premier Mills Limited and subsequent sale of the same to a sister concern of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment order that Jagadish Chandran, who happened to be the Managing Director of Premier Mills Limited had an agreement with Unit Trust India, which held 200,000 13.5% secured convertible redeemable debentures of Premier Mills, 30% of the face value of each of such debenture converted into two equity shares of the company of the face value of Rs. 10/- each at the issue price of Rs. 15/- each. By the said agreement, Jagadish Chandran agreed to purchase the shares at the value of Rs. 30/- either for himself or for his nominees. Thus, in terms of the agreement, the assessee stated to have purchased shares at the value of Rs. 30/- when the price of the share was between Rs. 8.25 and Rs. 8.50 per share and not Rs. 30/- or Rs. 39.50 at w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Premier Mills Limited, so that, the company remained under the effective control of its own people and the assessee could reduce its tax liability on the substantial income that had been earned during the assessment years 1988-89 by adjusting the loss in share transaction. The Assessing Authority held that there was absolutely no compulsion on the part of the assessee to acquire the shares at a fancy price from the Unit Trust of India. The shares were not acquired with the view to hold them as investments or as stock-in-trade in the ordinary course of share dealings. The Officer however pointed out that the assessee firm is a one of the nominees through its newly appointed partner M/s. Capricon General Finance Private Limited, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the transactions in detail and commented the manner in which he dealt with the whole issue. 4. Aggrieved by the assessment, the assessee went on appeal before the Income Tax Appellate Tribunal. By a common order, the Tribunal once again confirmed the views of the Commissioner of Income Tax (Appeals), who confirmed the order of assessment. Aggrieved by the order of the Tribunal, the assessee has filed the above appeals. 5. A perusal of the order of the Tribunal shows that Jagadish Chandran, the Managing Director of the Premier Mills Limited had an agreement in his individual capacity with the Unit Trust of India to repurchase the shares of Premier Mills Limited, by using the name of the assessee's firm. Jagdish Chandran purchased the sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchase of shares at highest price which stated to have been purchased. The Tribunal further held that there was no material to show as regards flow of funds from the assessee for the purchase of shares and that the transactions were genuine transactions. Based on these materials, the Tribunal rejected the appeal. 6. Even though learned counsel for the assessee strongly placed reliance on the agreement between the Unit Trust of India and Jagdish Chandran and canvassing the issue that the transaction is genuine and straight transaction, we do not find any justifiable ground to accept the said contention. On going through the orders of the authorities below, we have no hesitation in confirming the finding rendered by the Tribunal which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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