DCIT 9(2), MUMBAI V. YOGESH BHURA, MUMBAI

ITA 4532/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92346 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 04-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 06-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR BORADR
• Assessee Lawyers: S M BANDI
• Keywords: Share purchase agreement
• Section: 14A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.4532/MUM/2013 ASSESSMENT YEAR: 2009-10 DCIT-9(2), ROOM NO.218, 2 ND FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 / VS. SHRI YOGESH BHURA, G-402, PLEASANT PARK, KANCH PARA, LINK ROAD, MALAD (WEST), MUMBAI-400064 ( / REVENUE) ( !'# /ASSESSEE) P.A. NO. AEGPB4723D / REVENUE BY SHRI VIJAY KUMAR BORA-DR !'# / ASSESSEE BY SHRI S. M. BANDI $ % & #' / DATE OF HEARING 21/04/2015 & #' / DATE OF ORDER: 01/05/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 05/03/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE FIRST GROUND RAISED BY THE REVENUE PERTAINS TO HOLDING SHRI YOGESH BHURA 2 THAT THE ASSESSMENT GOT TIME BARRED IGNORING THE FA CT THAT INFORMATION WAS SOUGHT FROM THE DGIT(FD & TR) AND T HUS COVERED BY EXPLANATION-1(VII) TO SECTION 153 OF THE INCOME TAX ACT, 1961, BY WHICH THE TIME LIMIT FOR COMPLETI ON OF ASSESSMENT IS EXTENDED BY SIX MONTH AND FURTHER THE DELETING THE ADDITION OF RS.5.17 CRORES ON ACCOUNT OF AMOUNT RECEIVED FROM M/S INTEGRASCREEN HOLDING LTD. 2. DURING HEARING, THE LD. DR, SHRI VIJAY KUMAR BO RA, ADVANCED HIS ARGUMENTS, WHICH IS IDENTICAL TO THE G ROUND RAISED. ON MERIT, THE LD. DR, CONTENDED THAT NO AGR EEMENT WAS PRODUCED BEFORE THE ASSESSING OFFICER EVIDENCIN G OF RECEIPT OF ADVANCE AND SUCH AGREEMENT WAS PLACED BE FORE THE COMMISSIONER OF INCOME TAX (APPEALS). IT WAS ALSO CONTENDED THAT THERE WERE NO SIGNATURE ON OTHER PAG ES OF THE AGREEMENT. ON A QUESTIONING FROM THE BENCH WHETHER ANY REMAND REPORT WAS SOUGHT FROM THE ASSESSING OFFICER , THE LD. DR FAIRLY AGREED THAT REMAND REPORT WAS SOUGHT. OU R ATTENTION WAS INVITED TO PARA 4.1 OF THE IMPUGNED O RDER. 2.1. ON THE OTHER HAND, THE LD. COUNSEL FOR THE AS SESSEE, CONTENDED THAT THE ASSESSMENT WAS TIME BARRED ON 31/03/2011 BY INVITING OUR ATTENTION TO THE LETTER OF THE ASSESSEE OF 18 TH JANUARY 2013 , BY CONTENDING THAT THE PROVISION IS NOT APPLICABLE TO THE FACTS OF THE CAS E BY ASSERTING THAT THERE WAS NO EXCHANGE OF INFORMATION AND THE LETTER WAS MERELY ISSUED WHEN THE ASSESSEE RAISED ADDITION GROUND. IT WAS EMPATHETICALLY ARGUED THAT THE ASSESSEE DULY FILED THE AGREEMENT WHICH WAS SENT TO THE ASSESSING OFFICER FOR HIS SHRI YOGESH BHURA 3 COMMENTS AND FURTHER NO ADVERSE COMMENTS MADE BY TH E ASSESSING OFFICER. OUR ATTENTION WAS INVITED TO PAG E 24 OF THE PAPER BOOK BY CONTENDING THAT ASSESSEE HIMSELF APPE ARED BEFORE THE ASSESSING OFFICER. THE LD. COUNSEL FURTH ER CONTENDED THAT SINCE 2006, THE SALE WAS NOT QUESTIO NED BY EXPLAINING THE SHARE PURCHASE AGREEMENT IS DATED 01/06/2012. PLEA WAS ALSO RAISED THAT ON 09 TH JULY, THE ASSESSEE FILED A LETTER TO THE ASSESSING OFFICER BY INVITING OUR ATTENTION TO PAGE 50 OF THE PAPER BOOK. OUR ATTENTI ON WAS INVITED TO PAGE 55 OF THE PAPER BOOK. IT WAS PLEAD ED THAT THE ASSESSEE OFFERED LONG TERM CAPITAL GAIN BY FURTHER INVITING OUR ATTENTION TO PAGES 10, 27 AND 29. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE RAISED ADDITIONAL GROUND BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AGITATING THAT ASSESSMENT WAS COMPLETED BEYOND THE STIPULATED PERI OD AS THE LAST DATE OF FILING THE RETURN U/S 139(1) OF TH E ACT WAS 31/07/2009, WHEREAS, THE ASSESSEE FILED HIS RETURN ON 03/07/2009. NOTICE U/S 143(2) OF THE ACT, DATED 14/09/2010 WAS SERVED UPON THE ASSESSEE. ACCORDIN GLY, ASSESSMENT WAS TO BE COMPLETED ON OR BEFORE 31/12/2 011, WHEREAS, THE ASSESSING OFFICER COMPLETED THE ASSESS MENT ON 29/06/2012, IT IS TIME BARRED. WE FIND THAT THE LD . COMMISSIONER OF INCOME TAX (APPEALS) SEND THE ADDIT IONAL GROUND TO THE FILE OF THE ASSESSING OFFICER FOR HIS COMMENTS AND THERE WAS NO COMMENTS FROM HIS SIDES, MEANING T HEREBY EITHER HE HAD NOTHING TO COMMENT OR ACCEPTED THE CO NTENTION SHRI YOGESH BHURA 4 OF THE ASSESSEE. THE LD. ASSESSING OFFICER PASSED THE ASSESSMENT ORDER ON 29/06/2012, WHICH AS PER THE AS SESSEE IS BEYOND THE PRESCRIBED LIMIT PROVIDED U/S 153(1)( A) OF THE ACT. NOTICE U/S 143(2) WAS ISSUED ON 14/09/2010, TH US, THE ASSESSMENT WAS TO BE COMPLETED BEFORE 31/12/2011, T HUS, WE ARE IN AGREEMENT WITH THE VIEW OF THE LD. COMMIS SIONER OF INCOME TAX (APPEALS) THAT IT IS TIME BARRED. 2.3. SO FAR AS, MERITS OF THE APPEAL IS CONCERNED, WE FIND THAT THE ASSESSING OFFICER MADE ADDITION OF RS.5,17 ,00,097/-, AGAINST ADVANCE SHOWN FROM ISL. ON QUESTIONING BY THE ASSESSING OFFICER AS TO WHY SUCH ADVANCE SHOULD NOT BE TREATED AS INCOME OF THE ASSESSEE BEING SALE PROCEE DS OF SALE OF SHARES OF ESOPS. THE ASSESSEE EXPLAINED THAT HE RECEIVED ADVANCE AGAINST SALE WHICH WAS PENDING AND SHOWN AS TRANSACTION OF SALE LIABILITY. THE LD. ASSESSING OFFICER WAS OF THE VIEW, THAT MERE STATEMENT OF THE COMPANY IS NOT SUFFICIENT AS THE ASSESSEE DID NOT CLARIFY AS HOW T HE ASSESSEE SOLD THE SHARES AND ALSO THE GENUINENESS OF THE TRA NSACTION. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) , IT WAS CLAIMED THAT THE ASSESSING OFFICER WAS MADE AWARE O F THE CONTENTS OF THE LETTER DATED 05/01/2009 CLAIMING TH AT THE ASSESSEE RECEIVED ADVANCES FROM M/S INTEGRASCREEN H OLDINGS LTD. AND THE SAME HAS BEEN CONFIRMED BY THE COMPANY . THE ASSESSEE ACQUIRED 7,500 SHARES AT THE RATE OF US $ 1 TOTALING TO RS.US $ 7500/- ON 10/08/2005, THE SHARES WERE SP LIT INTO 7,50,000. THE ASSESSEE ALSO FURNISHED THE SHARE RE GISTER BEFORE THE ASSESSING OFFICER EVIDENCING THAT THE SH ARES WERE NOT TRANSFERRED AND STILL STANDING IN THE NAME OF T HE SHRI YOGESH BHURA 5 ASSESSEE. WE NOTE THAT THE ASSESSING OFFICER EVEN AFTER RECEIPT OF LETTER DATED 13/02/2013 NEITHER REBUTTED THE CLAIM OF THE ASSESSEE NOR RESPONDED TO THE COMMISSIONER O F INCOME TAX (APPEALS). MOREOVER, M/S INTEGRASCREEN HOLDING LTD. CONFIRMED VIDE COMMUNICATION DATED 05/02/2009 THAT RS.5,17,00,097/- WERE ADVANCED AGAINST THE PENDING SALE OF SHARES. THE SAID LETTER HAS BEEN REPRODUCED IN PARA 4.3. OF THE IMPUGNED ORDER. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ALSO FOUND FROM THE SHARE REGISTER THAT N O TRANSFER TOOK PLACE DURING THE RELEVANT YEAR AND IN FACT THE TRANSFER TOOK PLACE LATER ON AS THE AGREEMENT WAS EXECUTED O N 01/06/2012. THE SALE AND THE PURCHASE AGREEMENT OF SHARES ALONG WITH SHARE REGISTER WAS EXAMINED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND HE FOUND T HAT NO TRANSFER TOOK PLACE DURING THE YEAR UNDER REFERENCE RATHER THE TRANSFER TOOK PLACE LATER ON AS THE AGREEMENT WAS E XECUTED ON 01/06/2012. PAGE 52 OF THE PAPER BOOK CONTAINS CONFIRMATION DATED 05/02/2009, THUS, IN THE ABSENCE OF ANY CONTRARY MATERIAL, WE FIND NO INFIRMITY IN THE CONC LUSION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL S), THUS, WE FIND NO MERIT IN THE APPEAL OF THE REVENUE ON THIS ISSUE. 3. THE LAST GROUND PERTAINS TO GRANTING RELIEF OF RS.5,40,742/- U/S 14A. THE STAND OF THE REVENUE IS MERELY IN SUPPORT OF THE ASSESSMENT ORDER. ON THE OTHER HA ND, THE LD. COUNSEL FOR THE ASSESSEE, DEFENDED THE CONCLUSI ON ARRIVED AT IN THE IMPUGNED ORDER. SHRI YOGESH BHURA 6 3.1. WE FIND THAT THE LD. ASSESSING OFFICER MADE A DDITION U/S 14A OF THE ACT READ WITH RULE 8D OF THE RULES B Y MAKING ADDITION OF RS.5,40,742/-. TOTALITY OF FACTS CLEAR LY INDICATES THAT THE EXPENDITURE WAS DISALLOWED BY THE ASSESSIN G OFFICER WITHOUT POINTING OUT ANY DEFECT OR SHOWING ANY DIRE CT OR INDIRECT EXPENDITURE RELATING TO EARNING DIVIDEND I NCOME OF RS.18,61,454/-. THERE IS UNCONTROVERTED FINDING IN THE IMPUGNED ORDER THAT THE ASSESSING OFFICER HAS NOT A DDUCED ANY EVIDENCE POINTING OUT AS TO WHICH EXPENSES RELA TES TO EARNING OF DIVIDEND. THE INVESTMENT WAS MADE OUT OF OWN CAPITAL AND ADVANCES FROM ISL. THE LD. DR FILED A LETTER DATED 21/04/2015 ATTACHED WITH ANOTHER LETTER DATED 08/12 /2011 ADDRESSED TO THE JOINT SECRETARY (FT & TR) CBDT AND FURTHER LETTERS DATED 07/12/2011 WITH A REQUEST TO CONDUCT ENQUIRIES IN THE CASE OF ASSESSEE. NO MATERIAL WAS PRODUCED B EFORE US CONTRADICTING THE STAND OF THE ASSESSEE OR IN SUPPO RT OF THE REVENUE, THEREFORE, WE FIND NO INFIRMITY IN THE CON CLUSION OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), THUS, THIS GROUND OF THE REVENUE, IS ALSO HAVING NO MERIT, THE REFORE, DISMISSED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVE OF BOTH SIDES, AT TH E CONCLUSION OF HEARING ON 21/04/2015. SD/- SD/- ( R.C.SHARMA ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER $ % MUMBAI; ) DATED : 01/05/2015 SHRI YOGESH BHURA 7 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,-. / THE APPELLANT 2. /0-. / THE RESPONDENT. 3. $ 1# ( +, ) / THE CIT, MUMBAI. P. $ 1# / CIT(A)- , MUMBAI 5. 34 /# ! , +,' +!5 , $ % / DR, ITAT, MUMBAI 6. 6 7% / GUARD FILE. / BY ORDER, 03,# /# //TRUE COPY// / (DY./ASSTT. REGISTRAR) , $ % / ITAT, MUMBAI