ITO, Ward - 5(3), Kolkata, Kolkata V. M/s. Eureka Transporters & Traders (P) Ltd., Patna

ITA 1748/KOL/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83133 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2014
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 08-09-2010
• Court: TRIBUNAL
• Department Lawyers: P K CHAKRABORTY
• Assessee Lawyers: NK JAIN
• Keywords: Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [BEFORE HONBLE SRI MAHAVIR SINGH, JM & HONBLE S RI SHAMIM YAHYA, AM ] ITA NO.1748/KOL/2010 ASSESSMENT YEAR : 2006-07 ( APPELLANT ) (RESPONDENT) I.T.O., WARD-5(3), -VS- M/S.EUREKA TRANSPORTERS & KOLKATA TRADERS PVT.LTD.,KOLKATA (PAN:AAACE9742N) FOR THE APPELLANT SHRI P.K.CHAKRABORTY, JCIT, SR.DR FOR THE RESPONDENT SHRI N.K.JAIN, FCA. DATE OF HEARING : 18.09.2014 DATE OF PRONOUNCEMENT : 18. 09.2014. ORDER PER SHRI SHAMIM YAHYA, AM THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T ORDER OF LD. C.I.T.(A)- VI, KOLKATA DATED 11.06.2010 AND PERTAINS TO ASSESSMEN T YEAR 2006-07. 2. THE GROUNDS OF APPEAL IN THIS APPEAL READ AS UN DER :- 1. THAT LD.CIT(A)-VI,KOLKATA HAS ERRED IN LAW AS W ELL AS ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS.27,20,000/- ON ACCOUNT OF LOSS ON SALE OF SHARES STATING THAT THE AUTHORIZED REPRESENTATIVE HAD FILED CONFIRMATIO NS FROM THE PARTIES TO WHOM SHARES WERE SOLD AND TRANSACTION WERE THROUGH CHEQUES WITH OUT GOING INTO THE DETAILS OF THE TRANSACTIONS. 2. THAT THE LD.CIT-(A)-VI, KOLKATA HAS ERRED IN REC OGNIZING THE NATURE OF THE ALLEGED SHARE TRANSACTIONS AND DELIBERATE INTENTION OF THE ASSESSEE COMPANY TO CLAIM LOSS, ONLY TO MINIMIZE ITS PROFIT. 3. THAT THE APPELLANT CRAVES FOR LEAVE TO ADD, DELE TE OR MODIFY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 3. ON THIS ISSUE THE AO NOTED THAT DURING THE COUR SE OF HEARING OF THE CASE IT IS BROUGHT INTO THE NOTICE OF THE ASSESSEE THAT THE AS SESSEE HAS DEBITED IN THE PROFIT AND LOSS ACCOUNT A SUM OF RS.27,20,000/- AS LOSS ON SAL E OF SHARES. IN THE BALANCE SHEET THE ASSESSEE HAD SHOWN THE SAID SHARES AS INVESTMENT. T HE ASSESSEE SURREPTITIOUSLY HAS DEBITED THE SAID AMOUNT IN THE PROFIT AND LOSS ACCO UNT AS BUSINESS LOSS. ON THE VERY ITA.NO.1748/K/2010 M/S.EUREKA TRANSPORTERS & TR ADERS (P)LTD. A.YR.2006-07 2 DATE OF HEARING IT WAS ASKED TO THE ASSESSEE TO FIL E DETAILS ABOUT THE SHARE LOSS THEN THE ASSESSEE IN A HURRY ADMITTED THE POINT AND PAID TAX ON THE SAID AMOUNT. AO FURTHER NOTED THAT ON THIS CONTEXT IT IS WORTHWHILE TO MENT ION THAT HAD THE SAID COMPANY NOT BEING SELECTED FOR SCRUTINY THEN THE COMPANY COULD HAVE BAILED OUT SCOT-FREE FROM THE PAYMENT OF TAX. AO HELD THAT THE MERE ADMISSION ON THE THRESHOLD OF SCRUTINY PROCEEDINGS DOES NOT ABSOLVE THE COMPANY FROM THE G ARB OF PENAL PROCEEDINGS AS PER ACT. HENCE AO DID NOT ALLOW THE SETTING OFF. THE AO ALSO DID NOT ALLOW CARRY FORWARD OF THE SAID LOSS OF RS.27,20,000/-. 4. UPON ASSESSEES APPEAL IN THIS REGARD THE LD. CI T(A) ALLOWED THE CARRY FORWARD OF LOSS BY HOLDING AS UNDER :- I HAVE GONE THROUGH THE SUBMISSIONS OF THE APPELLA NT AND THE ORDER OF THE A.O. THE APPELLANT SOLD SHARES OF MAURYA MANAGEMENT P.LTD TO MRS.RENUKA SINHA AND MRS.MUKTA SINHA,. THE LD.AR FILED THE CONFIRMATION LETTERS FROM MRS.RENUKA SINHA AND MRS.MUKTA SINHA. THE LD.AR ALSO FILED CERTIFICA TE FROM C.A. REGARDING THE VALUATION OF SHARES OF MAURYA MANAGEMENT PVT. LTD. THIS IS AN UNLISTED SHARE PURCHASED BY THE ASSESSEE IN THE EARLIER YEARS. THE AMOUNT WA S RECEIVED BY CHEQUE AND THE AMOUNT WAS CLAIMED AS A LONG TERM CAPITAL LOSS BY THE ASSE SSEE COMPANY. THE A.O. HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONCLUDE THAT THE SALE WAS A SHAM TRANSACTION. IN THE CONFIRMATIONS LETTER FILED BY THE APPELLANT, THE PA N NO WAS CLEARLY MENTIONED. TAKING INTO CONSIDERATION THE FACTS OF THE CASE I DIRECT T HE A.O. TO ALLOW THE LONG TERM CAPITAL LOSS OF RS.27,20,000/- TO BE CARRIED FORWARD. THIS GROUND OF APPEAL IS ALLOWED. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BE FORE US. 5. WE HAVE HEARD BOTH THE COUNSEL AND CAREFULLY PER USED THE RECORDS. WE FIND THAT THE ASSESSEE HAS SUBMITTED BEFORE LD. CIT(A) THAT A O HAS MADE INDEPENDENT ENQUIRY FROM BOTH THE PURCHASERS. HOWEVER, WE FIND THAT THE AO HAS NOT MENTIONED ANYTHING IN THIS REGARD. THE LD. CIT(A) HAS RELIED UPON THE CONFIRMATION LETTERS FROM THE PURCHASERS SUBMITTED BY THE LD. COUNSEL OF THE ASSE SSEE BEFORE HIM. THE LD. CIT(A) NOTED THAT THE ASSESSEE COUNSEL HAS FILED CERTIFICA TE FROM CA REGARDING THE VALUATION OF SHARES OF MAURYA MANAGEMENT PVT.LTD. HE ALSO NOTED THAT THE AMOUNT WAS RECEIVED BY CHEQUE. IN THIS REGARD WE NOTE THAT THERE IS NOT HING ON RECORD TO SHOW THAT THESE MATERIALS WERE PRODUCED BEFORE THE AO. FURTHERMORE, THE LD. CIT(A) HAS NOT MENTIONED WHETHER HE HAS EXAMINED THE VERACITY OF T HE VALUATION OF THE SHARES BY THE ITA.NO.1748/K/2010 M/S.EUREKA TRANSPORTERS & TR ADERS (P)LTD. A.YR.2006-07 3 CHARTERED ACCOUNTANT. THE SAID VALUATION REPORT IS NOT AVAILABLE BEFORE US. IN THESE CIRCUMSTANCES WE REMIT THIS ISSUE TO THE FILE OF AO . THE AO IS DIRECTED TO CONSIDER THE ISSUE AFRESH IN THE LIGHT OF THE SUBMISSIONS MADE B EFORE THE LD. CIT(A). 6. IN THE RESULT THE APPEAL OF THE REVENUE STANDS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18.09.2014. SD/- SD/- [ MAHAVIR SINGH ] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 18.09.2014. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1. M/S. EUREKA TRANSPORTERS & TRADERS (P) LTD., SHAHI BHAWAN, 2 ND FLOOR, EXHIBITION ROAD, PATNA-800001. 2 I.T.O., WARD-5(3), KOLKATA 3 . CIT(A)-VI, KOLKATA 4. CIT - KOLKATA. 5. CIT-DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES