TMI Blog2017 (3) TMI 950X X X X Extracts X X X X X X X X Extracts X X X X ..... ale price. If the AO alleges any on-money transaction in respect of this sale of shares, then the onus lies on the AO to prove that the assessee had actually earned any undisclosed higher price on sale of these shares than the rate as disclosed by assessee. The AO's conclusion of manipulation of share price and thereby earning, undisclosed receipts on sate of shares is highly presumptuous - Decided against revenue - ITA No.1291/Mum/2015 - - - Dated:- 16-3-2017 - Shri Mahavir Singh, Judicial Member, and Shri Ashwani Taneja, Accountant Member For The Appellant : Suman Kumar(DR) For The Revenue : Anuj Kisnadwala ORDER Per Ashwani Taneja, A.M: This appeal has filed by the revenue against the order of Ld. Commissioner of Income-tax (Appeals)-47, Mumbai [hereinafter called CIT(A)], dated 2.12.14 passed against the assessment order dated 30.3.2013, u/s143(3) r.w.s. 153A of the Income Tax Act, 1961 for assessment year 2008-09 on the following grounds. The Ld. CIT(A) erred in admitting additional evidence in violation of provisions of Rule 46A by not providing an opportunity of being heard to the AO. The Ld. CIT(A) erred in admitting additional evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed in above mentioned cases and relied upon the order of Ld. Counsel CIT(A) passed in the case before us and requested for upholding the same being covered in favour of the assessee on account of aforementioned judgments on all the grounds raised by the revenue in the present appeal. 4. Per contra, Ld. DR did not make any distinction on law or on facts of the above cases and the case of the assessee. 5. We have gone through the orders passed by the lower authorities as well as by the Tribunal in aforementioned cases. The brief background is that search was carried out on 6.10.10 in the case of M/s. ARSS Infrastructure Pvt. Ltd. and its group concerns. The assessee was also covered under the search and eventually assessment order was passed u/s 153A. 6. In ground No.1 the revenue is aggrieved with the action of the Ld. CIT(A) in deleting the addition made by the Assessing Officer on account of loans received from Shri Suresh Gaggar of ₹ 10 lacs, and Garnet International Ltd. of ₹ 6,25000/-. Ld. CIT(A) deleted the addition by observing under:- I have carefully examined the facts of the case, the observations by the A.O. in the assessment order, the grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, it was submitted by the Ld. Counsel that in this case addition was made without there being any incriminating material found in the course of search. We have gone through the assessment orders and other record before us and it is noted from the order of the A.O., that Ld. Assessing Officer made addition on the basis of perusal of schedule 4 to the balance-sheet. There is no reference to any incriminating material having been found during the course of search. It is noted that search has been made on in this case on 6.10.10 whereas time limit for issue notice u/s 143(2) had expired on 30.9.2009. Thus, the assessment had attained finality when the search was carried out. Under these circumstances Ld. Counsel has submitted that no addition can be made in assessment u/s 153A in absence of any incriminating material having been found during the course of search in view of the following decisions:- All Cargo Global Logistics [374 ITR 645 (Bom)] CIT v. Gurinder Singh Bawa [386 ITR 483 (Bom)] CIT v. Kabul Chawla [380 ITR 573 (Del)] Dy. CIT v. Shri Ramakant Gaggar in ITA Nos 1287 to 1291/Mum/2015 for A.Y.s 2006-07 to 2009-10 dated 21.12.2016 (Pg 69- 80 of P.B.) DCIT v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules, 1963 is allowed . 9. Thus, respectfully following the aforesaid judgments and facts of this case, we find that addition was beyond jurisdiction in absence of any seized material. Further, it has been found by the Ld. CIT(A) that on merits also, addition was wrongly made since assessee had discharged onus u/s 68 and substantiated the loans received by Shri Suresh Gaggar and M/s. Garnet International Ltd. Nothing wrong has been pointed out in the well reasoned findings of Ld. CIT(A). Thus, viewed from any angle, no interference is called for in the order of Ld. CIT(A), and thus same is upheld. Ground No.1 is dismissed. Ground No.2 10. In this ground the revenue is aggrieved by the action of Ld. CIT(A) in deleting addition on account of unexplained receipt on sale of shares of ARSS Infrastructure Private ltd. amounting of ₹ 2,44,54,330/-. The brief facts in this regard are that during the course of assessment proceedings it was noted by the AO that assessee had sold shares of ARSS Infrastructure Private Ltd. The AO noted that sale price of shares has been suppressed as compared to its market value and accordingly addition was made of the differential amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... understated the sate consideration in respect of this transaction. It may be a sale of shares at undervalue, but not a case of understatement of sale consideration Even if the market price of share is higher than the actual sate price, there cannot be a presumption that there is, understatement of sale consideration to the extent of difference of market price and sale price. If the AO alleges any on-money transaction in respect of this sale of shares, then the onus lies on the AO to prove that the assessee had actually earned any undisclosed higher price on sale of these shares than the rate of Rs-13-33 as disclosed by assessee. The AO's conclusion of manipulation of share price and thereby earning, undisclosed receipts on sate of shares is highly presumptuous. The AO's reference to observations of Hon'ble Supreme Court in McDowell's case and some other cases has no relevance to the issue at hand. The decision of Hon'ble Supreme Court in McDwell s case is not universally applicable, as has been held in the following cases Union of India Vs. Azadi Bachao Andolan 263 ITR 706(SC) CWT Vs Arvind Narottarn 173 ITR 479 (SC). Banyan Berry Vs. CIT 222 ITR 831 (G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ari Corporation Ltd.. 200 hR 567, Shivakami Co. Pvt. Ltd. 159 1TR 71, the CIT(A) reached to the conclusion that even if there were some other instances of sale of shares at a higher price that cannot lead to a conclusion that the assessee has sold its shares at higher price until otherwise the AO is able to prove that the consideration received by the assessee is more than what is shown in the return of income. Since the AO has failed to bring any cogent material on record to substitute the actual sale consideration received by the assessee, there is no justification for the addition made by disregarding the actual sale consideration received by the assessee. From the record we found that assessee had shown the shares as investment, therefore, profit or loss arising on their sale are liable to be taxed under the head of capital gain rather than business income, therefore, the contention of Id. DR that since the addition has been made u1s68, the question of taking actual sate consideration does not arise. In view of the above discussion, we do not find any infirmity in the order of CIT(A). We had also carefully gone through the seized documents to which our attention was invit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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