TMI Blog2022 (7) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions and had thereafter permitted the loss claimed by the assessee towards the share transactions. We are in complete agreement with the findings recorded by the Tribunal that even otherwise the assessee being transferor of shares cannot be subjected to tax in the instant case, more particularly, considering the amendment brought by the Legislation on the statute book in the form of Sections 50CA and 56(2)(x)of the Act, which is applicable with effect from 01.04.2018 and 01.04.2017 respectively. The conjoint reading of both sections, clearly provides that the tax liability if any, arise in such kind of transactions will be applicable in the hands of recipients and no liability can be imposed on the transferor of shares. We cannot accept the submissions of the Revenue to treat the present case as a case of escapement of income conferring jurisdiction on the Assessing Officer for reopening the assessment. In fact for the reasons recorded, the Assessing Officer had no jurisdiction to initiate the reassessment under Section 147 read with Section 148 of the Act, more particularly, in absence of any new tangible material found on record. So far the issue of deleting the additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and purchase of shares are in fact genuine transactions and having incurred business loss may kindly be considered accordingly. The loss of purchase and sale of shares for following Companies have resulted to the extent of Rs.10,81,15,500/- (i) Winter Fresh Foods Pvt. Ltd. Rs.2,20,87,500/- (ii) Security Analysis India Pvt. Ltd. Rs.5,49,08,000/- (iii) TPL Finance Ltd. RS.1,24,20,000/- (iv) Suraj Ltd. Rs.95,00,000/- (v) Khandelwal Infrastructure P. Ltd. RS.92,00,000/- 2.3 However, the Assessing Officer has not considered the aforesaid objections noticing that the assessee company had made huge investment in shares, the income from which is exempt from tax. Further, from the profit and loss account, the AO noticed that the assessee company has incurred interest expenditure on unsecured loans. In absence of any documentary evidences produced by the assessee company, the Assessing Officer doubted the aforesaid transactions of sale and purchase of shares and ultimately vide order dated 20.01.2015, disallowed the loss of shares transaction in case of the assessee to the extent of an amount of Rs.10,81,15,500/-. 2.4 Being aggrieved with the aforesaid order dated 20.01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer, reopening of assessment is legally permissible? [B] Whether the Appellate Tribunal has erred in law and on facts in confirming the order of CIT(A) deleting the disallowance of loss claimed of Rs.10,81,15,500/- on sale and purchase of shares without appreciating the several findings of the Assessing Officer which shows that the transactions were not genuine transactions? 4. We have extensively heard Mr. M.R. Bhatt, the learned senior counsel appearing with Mr. Karan Sanghani, the learned counsel appearing on record for the appellate Revenue Department and Ms. Noopur D. Shah, the learned counsel appearing for the respondent Company assessee. So far as the scope of this Court under Section 260A of the Act is concerned, it is settled legal position of law that this Court can always re-appreciate and re-examine the issue in light of documentary evidence placed on record, more particularly, to find out any perversity in findings recorded by the Tribunal. We have carefully examined the record including the order impugned as well as have also considered the submissions made by the learned advocates appearing for the respective parties. 5. Mr. Bhatt, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer as colourable device with an intent to reduce the tax liability. 7. On the other hand, Ms. Noopur Shah, the learned counsel appearing for the respondent Company original assessee has supported the impugned order passed by the CIT (A) as well as the Appellate Tribunal. She submitted that various supporting evidences having been found were placed for consideration before the CIT (A). She further submitted that both CIT (A) as well as Appellate Tribunal have given cogent reasons and findings to hold that the share transactions of the respondent Company cannot be termed as sham transactions. She further emphasized that in fact, the Assessing Officer had no valid reasons which confers jurisdiction to initiate the proceedings for reassessment, more particularly, when no new tangible material had come on record and the material before the Assessing Officer was very much available even at the time of original assessment. Thus, she submitted that the Assessing Officer have not examined the aforesaid aspect at the time of scrutiny assessment. She therefore submitted that both the appellate authority can be termed as change of opinion. She further submitted that CIT (A) as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer for initiation of reassessment proceedings. 9. So far as merits of the matter are concerned, the Department had contended before the Appellate Tribunal that the assessee had not furnished necessary details before the Assessing Officer at the stage of reopening proceedings. Therefore, the Assessing Officer had rightly arrived at findings about the sale and purchase transactions as not genuine transactions. In these peculiar facts, the Assessing Officer had rightly disallowed the loss claimed by the assessee under the head of loss or sale and purchase of shares. The aforesaid submission of the Revenue Department has been closely examined by the Tribunal. We find that the Appellate Tribunal has committed no error of fact to arrive at finding that the supporting evidence in the form of application for shares of the Companies, copies of share certificate Form No.2 filed by the Companies to the ROC wherein the name of assessee Companies appears as share holder, PAN card copies of respective Companies, confirmation letters and payment / receipt through banking channel clearly establishes that sale and purchase transactions entered upon by the assessee during the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovides that the tax liability if any, arise in such kind of transactions will be applicable in the hands of recipients and no liability can be imposed on the transferor of shares. 12. In light of the aforesaid facts, we cannot accept the submissions of the Revenue to treat the present case as a case of escapement of income conferring jurisdiction on the Assessing Officer for reopening the assessment. In fact for the reasons recorded, the Assessing Officer had no jurisdiction to initiate the reassessment under Section 147 read with Section 148 of the Act, more particularly, in absence of any new tangible material found on record. So far the issue of deleting the addition of disallowance of loss claimed on sale and purchase of shares in case of assessee is concerned, as noted above, both the CIT (A) as well as Appellate Tribunal have elaborately discussed the supporting evidence and has individually examined the transactions of each five Companies. No contrary evidence has been placed before us by the Revenue Department to nullify the aforesaid evidence of the assessee. In such circumstances, we find no error of law or fact committed by the CIT (A) or the Appellate Tribunal in p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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