Facts of the case

• The assessee filed its return of income, declaring a STCL on sale of shares held in X Ltd. to three entities.
• The AO having doubted the genuineness of the transactions, held that the sum of Rs. 7 cr. Received on account of sale of shares is taxable u/s 68 of the I.T. Act.
• On appeal, the Ld. CIT(A) upheld the order of AO, thereby the assessee preferred an appeal before the Tribunal.
• The tribunal deleted the addition of Rs. 7cr. holding the transaction to be genuine.

Arguments of the Appellant (Revenue)

1. The assessee has failed to substantiate the identity, genuineness, and creditworthiness of the purchasers; hence the addition was rightly made u/s. 68 of the Act.
2. Further, the tribunal has considered additional evidence produced for the first time. The Ld. Counsel contends that upon acceptance of such additional evidence, the tribunal ought to have remanded the matter to the AO for fresh consideration.

Arguments of the Respondent (Assessee)

1. The tribunal has not relied on any additional evidence, contrary to the contentions of the revenue. The tribunal upon examination of the documents produced before the AO, held that the purchaser company was genuine and possessed sufficient funds at their disposal.
2. The alleged credit of Rs. 7cr. has been explained by the assessee upon submitting all the documentary evidences called for, the findings recorded by the tribunal is a finding of fact and therefore no substantial question of law arises for consideration.

Decision of the Court

• The tribunalexamined the Bank Statements and other evidence on record to determine the genuineness of the transaction as well as identity and creditworthiness of the purchasers. Upon the said examination the tribunal held that the purchasers has sufficient funds and net worth at their disposal for the acquisition of shares.
• Tribunal further observed that the purchasers had responded to the notices issued by the AO u/s. 133(6), apart from doubting the transaction, no other material was brought on record by the AO to discredit the explanation offered by the assessee.
• We have perused the findings recorded by the tribunal, they are purely factual and based on documents available on record. It is settled position that a finding of the fact, unless shown to be perverse, does not give rise to any substantial question of law.

Significant takeaways from judgment

The factual determinations of Tribunal cannot be interfered with u/s 260A unless they are perverse or unsupported by evidence.