9911796707
TMI Blog2019 (12) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... the ceased liability u/s 41(1) of the Act, even when the creditor, M/s Radharamana Holdings Pvt Ltd, whose name was appearing in the Balance Sheet of the Assessee, had denied having made any transaction with the Assessee implying that the liability of M/s Radharaman Holdings Pvt ltd no longer existed. iii) On the facts and circumstances of the case, the Ld. Commissioner of Income tax (A) ought to have upheld the order of the Assessing Officer. iv) It is, therefore, prayed that the order of the Ld. Commissioner of Income tax (A) may be set-asided arid that of the Assessing Officer be restored." 3. The two grounds of appeal of the revenue are inter-connected to the issue of deleting the addition of Rs. 6,75,0000/- made u/s. 68 of the act on account of unexplained creditors and deleting the same addition made in respect of the ceased liability u/s. 41(1) of the, therefore, for the sake of convenience, both these grounds of appeal are adjudicated together. 4. The fact in brief is that the assessee has filed return of income declaring total income at Rs. 23,01,498/- on 6th April, 2009. The case of the assessee was subject to scrutiny assessment and notice u/s. 143(2) of the act i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany out of which it had already sold 4200 shares as reflected in the demat account. It was further explained that the sale consideration received on sale of aforesaid shares was also reflected in the bank statement and short term capital gain arising out of the sale of such shares amounting to Rs. 2182462/- was duly offered for taxation in the income tax return. It is further submitted that assessee has also made payment to Radharman Holding Pvt. Ltd. for purchase of the shares which was also reflected in the bank statement of the assessee company and the balance outstanding amount of Rs. 6,49,51,200/- was still payable to the said party. In order to verify the assessee's claim of having made part payment to Radharaman Holing Pvt. Ltd., the assessing officer has issued notice u/s. 133(6) to the assessee's bank and as per the information received from the Axis Bank, the assessing officer had noticed that none of the chques were payable to M/s. Radharaman Holding Pvt. Ltd. and cheque no. 64697 was issued in the name of the assessee itself and other cheques nos. 64794 and 64795 were issued in favour of Parsoli Corporation Ltd. In view of the above, the assessing officer observed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st of 5 lac shares of Parsoli Corporation Ltd. However, during the appellate proceedings the appellant contended that these transactions were not done through Radharamana Holdings Pvt. Ltd. but 5 lac shares of M/s. Parsoli Corporation Ltd. was purchased through Parsoli Corporation Ltd., who is also a registered share broker with BSE. It was also contended that this transaction was not truthfully declared in the books of accounts as one of the directors of the appellant company is a relative of director of Parsoli Corporation Ltd., and by recording this transaction truthfully, the parties were apprehensive of action from SEBl. For this reason the name of M/s. Radharamana Holdings Pvt. Ltd., was inserted in the books of accounts. 4.6 During the appellate proceedings, the appellant has furnished copy of bills which evidences purchase of shares of M/s. Parsoli Corporation Ltd., from M/s. Parsoli Corporation Ltd. itself. The appellant has also filed confirmation torn Parsoli Corporation Ltd., who has confirmed that the appellant was a sundry debtor of Rs. 6,49,51,200/- as on 31/3/2008. These evidences were forwarded to the office of the A.O. and he had made necessary investigations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns are fulfilled :- (i) In the assessment of an assessee, an allowance or deduction has been made in respect of any loss, expenditure or trading liability incurred by him. (ii) (a) Any amount is obtained in respect of such loss or expenditure, or (b) Any benefit is obtained in respect of such trading liability by way of remission or cessation thereof. (iii) Such amount or benefit is obtained by the assessee; and (iv) Such amount or benefit is obtained in a subsequent year. To invoke provisions of sec.41(1) the A.O. has to prove that any amount is obtained by the appellant in respect of such loss or expenditure or any benefit is obtained in respect of trading liability by way of remission or cessation. There is nothing on record to indicate that the appellant had obtained any benefit in respect of such trading liability by way of remission or cessation. In fact it is proved by cogent evidences that liability of Rs. 6,49,51,200/- exists as on 31/3/2008 and this liability exists in the name of M/s. Parsoli Corporation Ltd. In view of these facts, I am of the considered view that, provisions of section 41(1) cannot be invoked in this case and accordingly I do not agree with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for purchase of Parsoli Corporation Ltd. which was off market transaction. It is also submitted that one of the directors of the assessee company was a relative of director of the company Parsoli Corporation ltd., therefore, to avoid any action from SEBI, the transaction was shown in the name of Radharaman Pvt. Ltd. and confirmation was also furnished in the name of Radharaman Holding Pvt. Ltd. Accordingly, the outstanding liability was shown in the name of Radharaman Holding Pvt. Ltd. instead of actual broker i.e. Parsoli Corporation Ltd. It is submitted that the correct facts were duly shown in the books of Parsoli Corporation Ltd and the assessee company was shown as debtor in the books of Parsoli Corporation Ltd. with the outstanding amount of Rs. 6,49,51,200/- after considering the part payment of Rs. 25,48,800/- made by the assessee company towards purchase of shares. In view of the above facts, the outstanding balance was wrongly shown in the name of Radharaman Pvt. Ltd. in the books of the account of the assessee company. The assessee has also submitted the duly confirmed copy of account of the assessee company from the books of Parsoli Corporation Ltd. for the year under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The content of the remand report submitted by the assessing officer are elaborated at page no. 22 to 25 in the order of CIT(A). In the remand report, the assessing officer has submitted that in view of the facts and circumstances, the matter may be decided on merits as the facts during the assessment was contrary to the appellate proceedings. Considering the above facts and findings of ld. CIT(A), it is undisputed fact that assessee has purchased 5 lacs of shares of Parsoli Corporation for a consideration of Rs. 6.75 crore through Parsoli Corporation Ltd. who is also a registered share broker with the BSE and out of these shares 4200 were sold during the year under consideration and the assessee has declared short term capital gain of Rs. 21,82,462 on the sale of these shares. The ld. CIT(A) has categorically established in his findings that these shares issued were not purchased from Radharaman Holding Pvt. Ltd. but 5 lacs shares of Parsoli Corporation Ltd. was purchased through Parsoli Corporation Ltd. and these transactions were not correctly declared in the books of account of the assessee as one of the directors of the assessee company was a relative of the director of Parsol ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
