Karad Projects And Motors Ltd., CHENNAI V. ACIT Company Circle II(4), CHENNAI

ITA 371/CHNY/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9655 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 15-02-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Keywords: Fair market value

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , ! ' , $ '% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.371/CHNY/2019 ( )( / ASSESSMENT YEAR : 2007-08 M/S KARAD PROJECTS AND MOTORS LTD., (FORMERLY KNOWN AS M/S KIRLOSKAR CONSTRUCTIONS & ENGINEERS PVT. LTD.), RAJ PARRIS, TRIMENI TOWERS 2 ND FLOOR, NO.174, GN CHETTY ROAD, T. NAGAR, CHENNAI - 600 017. PAN : AADCA 9556 F V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE II(4), CHENNAI. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : NONE -.+, / 0 / RESPONDENT BY : SHRI R. CLEMENT RAMESH KUMAR, ADDL.CIT 1 / 2$ / DATE OF HEARING : 13.06.2019 34) / 2$ / DATE OF PRONOUNCEMENT : 19.06.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -8, CHENNA I, DATED 16.10.2018 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2 I.T.A. NO.371/CHNY/19 2. THE NOTICE OF HEARING WAS SERVED ON THE ASSESSEE BY RPAD AND THE REGISTRY HAS PLACED ON RECORD THE POSTAL AC KNOWLEDGEMENT AS PROOF OF SERVICE OF NOTICE ON THE ASSESSEE. INS PITE OF RECEIPT OF NOTICE BY RPAD, THE ASSESSEE CHOSE TO REMAIN ABSENT WHEN THE APPEAL WAS TAKEN UP FOR HEARING. THEREFORE, WE HEA RD THE LD. DEPARTMENTAL REPRESENTATIVE AND PROCEEDED TO DISPOS E THE APPEAL ON MERIT. 3. SHRI R. CLEMENT RAMESH KUMAR, THE LD. DEPARTMENT AL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE SOLD EQ UITY SHARES OF SOME OF THE COMPANIES AND EARNED CAPITAL GAINS. HO WEVER, NO CAPITAL GAIN WAS OFFERED FOR TAXATION. ACCORDING T O THE LD. D.R., THE ASSESSEE HAS NOT FURNISHED ANY DETAILS WITH REGARD TO COST OF THE SHARES, FAIR MARKET VALUE OF THE SHARES AND OTHER D OCUMENTS INSPITE SPECIFICALLY REQUESTED BY THE ASSESSING OFFICER, TH EREFORE, THE ASSESSING OFFICER COMPUTED THE CAPITAL GAIN. ON AP PEAL BY THE ASSESSEE, ACCORDING TO THE LD. D.R., THE CIT(APPEAL S) ENHANCED THE ASSESSMENT AFTER CONSIDERING THE COST OF ACQUIS ITION AND FAIR MARKET VALUE. DURING THE COURSE OF APPELLATE PROCE EDING, THE CIT(APPEALS) FOUND THAT THE ASSESSEE-COMPANY TRANSF ERRED THE 3 I.T.A. NO.371/CHNY/19 SHARES TO ITS SISTER CONCERNS. THE DETAILS OF TRAN SACTIONS WERE NOT FURNISHED BEFORE THE AUTHORITIES BELOW. 4. REFERRING TO THE ORDER OF THE CIT(APPEALS), MORE PARTICULARLY AT PARAS 9 AND 10, THE LD. D.R. SUBMITTED THAT THE ASSESSEE WAS ASKED TO FILE AN AFFIDAVIT SIGNED BY THE MANAGING D IRECTOR OF THE ASSESSEE-COMPANY EXPLAINING THE SHARE TRANSACTIONS AND THE LONG TERM CAPITAL GAINS EARNED OUT OF SUCH TRANSACTIONS. INSPITE OF SPECIFIC DIRECTION, SUCH AN AFFIDAVIT WAS NOT FILED . REFERRING TO GROUND NO.6 OF THE GROUNDS OF APPEAL TAKEN BY THE A SSESSEE BEFORE THIS TRIBUNAL, THE LD. D.R. SUBMITTED THAT EVEN THO UGH NO AFFIDAVIT WAS FILED BY THE MANAGING DIRECTOR, THE ASSESSEE CL AIMS THAT SUCH AN AFFIDAVIT WAS TAKEN ON RECORD. ACCORDING TO THE LD. D.R., THIS STATEMENT MENTIONED IN THE GROUNDS OF APPEAL IS FAC TUALLY NOT CORRECT. THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) HAS RIGHTLY ENHANCED THE ASSESSMENT BY RE-APPRECIATING THE MATERIAL AVAILABLE ON RECORD. 5. HAVING HEARD THE LD. D.R., WE HAVE PERUSED THE O RDERS OF THE AUTHORITIES BELOW. AS RIGHTLY SUBMITTED BY THE LD. D.R., THE TRANSACTIONS OF SALE OF SHARES TO THE SISTER CONCER NS WERE NOT DISCLOSED BY THE ASSESSEE-COMPANY IN THE RETURN OF INCOME. THE 4 I.T.A. NO.371/CHNY/19 ASSESSEE WAS SPECIFICALLY ASKED TO FURNISH DETAILS BY BOTH THE AUTHORITIES BELOW. THE CIT(APPEALS) SPECIFICALLY D IRECTED TO FILE AN AFFIDAVIT SIGNED BY THE MANAGING DIRECTOR OF THE AS SESSEE-COMPANY EXPLAINING THE TRANSACTIONS OF SALE OF SHARES. INS PITE OF SPECIFIC DIRECTION, THE ASSESSEE HAS FAILED TO FILE ANY OF T HE DETAILS WITH REGARD TO SHARE TRANSACTIONS. THEREFORE, THE CIT(A PPEALS) BY TAKING INTO CONSIDERATION OF THE AVAILABLE MATERIAL, ESTIM ATED AND DETERMINED THE LONG TERM CAPITAL GAINS. THE ASSESS EE COULD NOT CONTROVERT THE COMPUTATION OF CAPITAL GAINS MADE BY THE CIT(APPEALS). IN THE GROUNDS OF APPEAL, ONLY GENER AL AND VAGUE GROUNDS WERE RAISED. IN VIEW OF THE ABOVE, THIS TR IBUNAL IS OF THE CONSIDERED OPINION THAT THERE IS NO MERIT IN THE AP PEAL FILED BY THE ASSESSEE. ACCORDINGLY, THE SAME IS DISMISSED AS DE VOID OF MERIT. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 19 TH JUNE, 2019 AT CHENNAI. SD/- SD/- ( ! ' ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 6 /DATED, THE JUNE, 2019. 5 I.T.A. NO.371/CHNY/19 KRI. / -278 98)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 :2 () /CIT(A)-8, CHENNAI 4. PRINCIPAL CIT- 4, CHENNAI 5. 8; -2 /DR 6. <( = /GF.