TMI Blog2012 (10) TMI 753X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the finance from the ICICI Ltd. - decides in favour of revenue - ITA No. 1310/Mum/2005 & ITA No. 701/Mum/06 - - - Dated:- 18-7-2012 - SHRI G E VEERABHADRAPPA SHRI VIJAY PAL RAO, JJ. Revenue by Sh B Jayakumar PER VIJAY PAL RAO, JM These two appeals by the assessee are directed against two separate orders of the Commissioner of Income Tax (Appeals) dated 27/09/2004 and 28/11/2005 for the assessment years 2001 02 and 2002 03 respectively. 2 The assessee has filed a letter seeking adjournment of these appeals on the ground that the Chartered Accountant, who is looking after the matter has gone out of town. These two appeals are very old appeals and pending since 2006. Further, the assessee also got stay orders against recovery of tax; but thereafter these appeals are being adjourned most of the time on the request of the assessee. It transpires from the record that these appeals were adjourned on earlier occasions on 1/08/2011, 8/09/2011,12.1.2012, and on 9/4/2012 on the request of the assessee on similar grounds. It appears from the record that the assessee s conduct has been casual and non-cooperative to the hearing of the appeals. This Tribunal ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cost of acquisition of shares of Jindal Vijaynagar Steel Limited on the ground that the transaction of purchase of shares was a sham transaction . The learned CIT (A) failed to appreciate the submissions and explanations given by the appellant in this behalf. 3 On the facts and in the circumstances of the case and i law, the learned CIT (A) failed to appreciate that once the purchase price is worked out considering prevailing market quotation at the relevant time, the sale price thereof should also have been worked out considering the prevailing market quotation at the relevant time. It is now a settled legal position that the assessee s version can be accepted in toto or rejected in toto. 5 The controversy and issues in both the assessment years are arising from the same facts and circumstances and relating to the transaction of purchase and sale of shares of M/s Jindal Vijaynagbar Steel Ltd. The purchase transaction of these shares took place during the period relevant to the assessment year 2001 02; whereas the sale of these shares were in the previous year relevant to the assessment year 2002 03. 6 The brief facts giving rise to the controversy are as under: The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee company. Chronology of transaction shows that none of the transaction was performed for fulfilment of shown purpose. These were only the arrangement to carryout the undeclared motive of serving the interest of JVSL and thereby propping up of the balance sheet of JVSL and the related books of accounts. 6.2 Accordingly the Assessing Officer held that the whole transaction is Sham transaction entered into for the purpose of assisting JVSL and not for purpose of business of assessee company. 7 On appeal the CIT(A) has concurred with the findings of the Assessing Officer on the point that the sale purpose of whole transaction is not to carry on any business activity either of supply of MS slab or trading in shares; but the sole purpose of purchase of share of JSVL was to help the said company to comply with the conditions put forth by ICICI Ltd. However, the CIT(A) has observed that though in the current year i.e. Assessment Year 2001-02, there is no tax impact because of this issue; but for the purpose of computation of capital gain/loss in subsequent year, the Assessing Officer is free to adopt the cost price keeping in view the prevailing market price on the date of purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther pointed out that this fact of sham transaction has been strengthened by the fact that in the subsequent year the assessee sold these shares at the rate of Rs.. 7.25 per share to another group company namely Jindal Tract Tebal Powr Co Ltd and incurred loss of Rs.. 3.85 crores. After indexation the capital loss was claimed at Rs. 4,53,96,552/-for the assessment year 2002 03. The learned D.R has submitted that the assessee paid purchase price of Rs.. 10/- per share; whereas on the date of transaction, the market price of the shares was Rs. 5.80 to Rs. 6/- per share therefore, the Assessing Officer has rightly taken the cost of purchase of the shares at Rs.. 5.80 for the purpose of computing the long term capital gain for the assessment year 200 2-03. 10 After considering the submissions of the learned DR as well as relevant material on record, we note that the assessee has not brought out any material on record to controvert the facts recorded by the authorities below that on the date of purchase of shares of JVSL at the rate of Rs..10/- per share, the market price of the share was between Rs.. 5.80 to Rs.. 6/-per share. The assessee has also not disputed this fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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