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TMI Blog2017 (3) TMI 950X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to Rs. 2,44,54,7301- without appreciating the fact that the Assessing Officer had relied upon the documentary evidences found during search action which proves that the share transactions were carried out to earn profit outside the books of accounts." "On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition on account of unexplained receipt on sale of shares of ARSS Infrastructure Pvt. Ltd., amounting to Rs. 2,44,54,7301- by taking the sale price at Rs. 1251/- per share as against Rs. 13.33/- per share as shown by the assessee, without appreciating the fact that the sale price of Rs. 1251/ - per share had been determined by the AO after detailed analysis and was backed by various judicial pronouncements and hence was a just determination as per the provisions of the Act." 2. During the course of hearing, it has been stated at the very outset that the Ld. Counsel that the issues raised in this appeal by the revenue have already decided in favour of the assessee in the case of directors of the assessee company or in the case of other group company pertaining to the same search wherein identical issues were involved, in the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions. Relying on the case law highlighted by the appellant company it is impliedly Clear that the brought forward loans cannot be treated as unexplained receipt of money u/s 68 for the year under consideration. Further, the appellant company has time and again submitted the fact about the intra group loans (from group members) from the assessees which are assessed by the same A.O. and requested to cross verify in the books of accounts of those inter group assessees for such transactions. However, it is noticed that the 1\0, has erred in not considering the facts and explanations furnished by the appellant company in the assessment proceedings and made the additions u/s 68 on the basis of his assumption that the identity, creditworthiness and genuineness of the loans is not established. 1. Loan of Rs. 10,00,000/- from Suresh Gaggar 2. Loan of Rs. 6,25,000/- from Garnet International Ltd. In the above cases, it is noticed that the above mentioned lenders are the group members of the GAGGAR GROUP. The assessments of these two lenders is also completed by the very same A.O. u/s 153! r.w.s.143(3). All the relevant details were very much on the departmental record and sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aws relied upon by the parties. We find that on the date of search the assessment for the instant year had already attained finality as the return was filed on 30.9.2006 whereas the search was conducted on 6.10.2010. We also find from the perusal of provision of section 153C of the Act that the AO shall assess the income in respect of six assessment years prior to the year in which the search was conducted. It has also been provided in the section that the assessment which are pending on the date of search shall be abated and assessment shall be made by the AO under section 153C in the same manner as assessment u/s 143(3) of the Act whereas in respect of those assessment years out of six years which are not pending on the date of search and have attained the finality, the AO has limited jurisdiction to make addition based upon the material seized during the course of search and not otherwise. The Hon'ble Bombay High Court in the case of Murli Agro Product Limited (supra) and All cargo Global Logistics Ltd (supra) as affirmed by the Jurisdictional High Court an identical issue has been decided by holding that in respect of assessments which has attained finality on the date of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was conducted in the case of ARSS group on 06.10.2010 by the DDIT(investigation), Unit- 11(1), Bhubaneswar.' The assessee was also covered under the search action u/s132 of the Act. During the course of assessment uls.153A rw.s.143(3), the AO found that the assessee had purchased 4,00,000 shares of the ARSS Infrastructure Projects Ltd. @ Rs. 40/- per share before its Initial Public Offer and was allotted bonus shares in the ratio of 2:1 i.e. 8,00,000 shares. It was further found that during the year under consideration, on 23.07.2008, the assessee had sold 50,000 shares to one M/s. Tao Builders Pvt. Ltd. The said shares were sold at Rs. 13-33 per share. However, the A.O had taken the sale price of the share at Rs-125/per share on the ground that in case of Bhuta Investment Pvt. Ltd., one of the assessee1s in the group, on similar date, sold the shares at Rs-125/per share. This led to the addition of Rs. 55,83,5001-. The A.O assessed the total income at Rs. 1,39,60,760/- u/s.143(3) r.w.s. 153A of the Act. Aggrieved by the above order, assessee filed appeal before the CIT(A) and it was submitted that as regards sale of 50,000 shares of ARSS to M/s Tao Builders N. Ltd. at Rs. 13. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra), Godavari Corporation Ltd., 200 ITR 567, Shivakami Co. Pvt Ltd. 159 ITR 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 Ld DR that since the addition has been made u/s.68, the question of taking. We also found that the documents filed by the assessee along with case laws were forwarded by CIT(A) for remand report to the AO vide letter dated 16-12-2013 and vide letter dated 31-12-2013, the AO sent his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion as made uls.68. The AO has referred to para 5 of his order which para also describes activity in which assessee is engaged i.e. investment in shares. Provision of Section 68 cannot be involved because requirement of Section is nature and source, both should be unexplained. In the instant case both the nature and source of money has been explained and 'only addition has been made by substituting the actual sale price. Accordingly, addition has been wrongly made by AO u/s.68. We have also perused loose papers seized during course of search at the premises of Shri Jitendra Mehta and Shri Devan Mehta, Annexure Al Page Nos. 94, 93,92. 91 & 111, Annexure-A3 page nos.45,44,74, and 73 and Annexure-A forming part of assessment order, as placed in the paper book at page 1 to 18. None of these documents suggest that assessee has sold the shares at a price taken by the AO in his computation. Detailed findings recorded by CIT(A) are as per material record, therefore, do not warrant any interference on our part". 13. It is further brought to our notice that similar view has been taken by the Tribunal in the case of DCIT v. Devan Mehta, supra and DCIT v. Indra Gaggar, (supra). It is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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